We live in one of the most divided and uncertain times in history. COVID has taken over 120,000 American lives. The killing of George Floyd has reinvigorated the most powerful race conversations since Martin Luther King, Jr. said, “I have a dream.” These cultural events will bleed beyond politics and into business, shifting how consumers choose the brands they support. With divisions growing deeper daily, finding tribes, communities, and brands who share our beliefs and values are important to voices being heard. Now more than ever, we believe that it’s time for your brand to either find its purpose or get out of the market.
Brand purpose expresses the “why” behind what you do. Brand purpose is the core belief that drives your company - it’s what gets employees out of bed every day and the impact you seek to make on the world around you. Brand purpose is the powerful connective tissue between your business, employees, customers and communities. It’s a shared set of beliefs and values. It’s a rallying cry to make a difference in the world. Purpose-driven brands form relationships with their audience beyond a transaction. A good brand purpose has nothing to do with the products you sell, but rather explores what you stand for.
It’s equally important to understand what a brand purpose is NOT. Clients will sometimes say that they don’t want to publicize their purpose because “we’re in the market to make a profit” or “we’re not one of those bleeding-heart companies.” It’s important to note that brand purpose isn’t your charitable giving plan or ESG roadmap, nor is it reserved for companies with a social mission. Creating a purpose-driven brand is critical business strategy.
COVID-19 has caused economic pressures and shifting social norms. Lingering fears of financial repercussions have especially impacted younger generations, with 58% of millennials and Gen Z “worried about personal finances due to the virus”. On top of COVID, calls for sweeping social change have put a magnifying glass on brands’ contribution to social justice causes and fair hiring practices. In June, cosmetics giant Sephora committed to dedicating 15% of their shelf space to black-owned brands. Pepsico announced a “Journey to Racial Equality” plan, which includes adding 100 Black associates to its executive ranks on top of large donations to social justice causes. In a world where 80% of Americans feel that the country is spiraling out of control, we predict consumers will look to brands for change.
Even before these shaking cultural events, consumers showed a clear preference for purpose-driven brands. Nearly two-thirds (63%) of global consumers prefer to purchase products and services from companies that stand for a purpose that reflects their own values and beliefs, and will avoid companies that don't. Consumer pressure will continue to force changes in business, and as a result, we predict that consumers will be even more intentional where and with whom they spend their money.
The benefits of brand purpose are extensive, spanning from customer loyalty to employee engagement.
- Purpose-led brands build deeper connections. It allows customers to more quickly bypass the functional RTBs and build a trusted relationship with the brand due to a system of shared beliefs and principles. This allows you to build true brand loyalty vs. feature-level preference.
- Brand purpose creates clarity. It serves as a true-north for future innovation, business decisions, culture, and hiring. A clear purpose should be a litmus test which guides the development of new products and services, and a lens through which company growth strategies should be viewed, especially those that desire to become a lifestyle or omni-channel brand.
- Brand purpose opens other categories because you’re anchoring in a system of beliefs, not a type of product or capability. It defines what we stand for, who we are, and how we envision the future to create an action-orientation towards shared goals. Casper’s belief that “sleep is the superpower that charges everything people do” allowed them to innovate beyond mattresses to Nap Pods and lighting.
- Purpose also helps to define a company’s culture. Drawing a clear line in the sand makes it simpler to know where you stand on a social or cultural issue impacting your employees, rather than scrambling to figure it out in the moment.
- Shared purpose helps you attract, retain, and motivate talent. A study by PWC found that non-millennials are 2.3X more likely to stay when they have a strong connection to their employer’s purpose; millennials are a whopping 5.3X more likely to stay. Brand purpose will ultimately help leadership and recruiting teams determine which kinds of employees we should hire and how we should support them.
- Purpose-driven brands grow faster. A strong strategy plus engaged employees yield good numbers. In fact, the Global Purpose Index reported that 42 percent of non-purpose-driven companies evinced a yearly decrease in revenue, while 85 percent of purpose-driven companies showed positive growth.
With cultural and economic realities shifting daily, creating a purpose-driven brand has never been more important. Take the first step towards finding your own by writing down the shared beliefs you and your employees share about why the company exists.
If you had your way, how would the world be different when you leave it? When the dust has settled, your purpose will guide your way.