Posted: 03 Nov. 2020

Inspiring loyalty: Why profit and purpose aren’t mutually exclusive

L-R Brianne West, Nikki Clarke

Everyone begins a business with a different motivation. Whether it’s purely for profit, to fill a gap in the market or to make a change in the world around us, this reason for existing runs throughout a company’s lifeline.

Many people are inclined to believe that businesses started as passion projects won’t ever make as much profit. But this isn’t the case – cosmetics brand Ethique and activewear store Cadenshae have both built profitable companies around a strong purpose.

Creating a business to make a difference

Each were started by founders who felt deeply about something they wanted to change. For Cadenshae founder, Nikki Clarke, her company came from a genuine need she experienced as a first-time mother in 2013. Having worked as a personal trainer, she was used to an active lifestyle. Unfortunately, activewear at the time wasn’t designed with motherhood in mind – often too restrictive or sized poorly. As Clarke describes,

‘Being able to wear these clothes and be a mother was something I really wanted to do. It was so frustrating that none of the big sports brands had even recognised that women have babies, get pregnant and breastfeed.’

Pushed by both inspiration and necessity, Clarke started looking into designing her own clothing range that would support pregnant women and new mothers. Now Cadenshae has evolved into an international business with a strong community and a sports star as a brand representative.

At its heart is, well, heart. A big motivation behind the brand is for their clothing to do more than fill the wardrobe, but to support emotional welfare. As Clarke says, ‘in the end, becoming a mother is such a precious time, but it’s also challenging. Clothing should be the least of your worries.’

Ridding the world of plastic bottle waste

Ethique also came from founder Brianne West’s own personal values. A lifelong entrepreneur and animal lover, West’s first foray into business was working as an unofficial pet detective as a child. Farther down the line, that love of animals developed into a wider concern over the natural world and the harm that our human population is doing to it through landfill.

And so Ethique was born in 2012, a sustainable cosmetics company that aims to rid the world of plastic bottle waste. Its products, ranging from shampoo and conditioners to face and body wash, come in the form of bars with paper packaging. West started the company with the ambitious goal of preventing one million plastic bottles going to waste by 2020. Now Ethique has reached 10 times that target.

The next goal? Half a billion by 2030. It’s in reach too - as a company started by equity crowdfunding, just this month a new investment deal made significant returns for its 352 shareholders. Next in the plan is a range of about 70 new products set to hit shelves, both in New Zealand and abroad.

So how has Ethique built up such a strong customer base?

‘A company that only has making money at the core isn’t exciting,’ explains West. ‘A business has got to have something that not only inspires the people who work for the company, but is meaningful for your customers because it inspires loyalty.’

Cadenshae has also experienced this – the brand’s clear purpose has built a strong community of customers. The response Clarke gets from her customers means a lot to her. As she describes, ‘the biggest highlight for me is getting the feedback from mothers. Hearing stories about how a mother felt limited, but our clothing enabled her to get out and about, and still could breastfeed her baby – that makes me tear up.’

One of those customers, US runner Alysia Montano, has now signed up as a brand advocate, having ended her sponsorship with Nike when she became pregnant and felt there was a lack of support from the organisation.

‘That was a real highlight for us, because we always wanted to have athletes as part of our community,’ says Clarke.

Overcoming the challenges of a purpose-led business

Running a purpose-led business isn’t without its challenges. When Clarke started Cadenshae it grew quickly, which sometimes meant that there wasn’t enough capacity in the team to catch potential problems. She mentions one challenging time back in 2018, saying, ‘we changed our website and the whole migration was a complete mess. Our revenue dropped and we lost all of our organic SEO. But what I learnt from that time was that I couldn’t do everything, and if we wanted to be a successful business, we had to have the right people in the right places.’

As Ethique grew, its manufacturing processes proved challenging. Its shampoo and cosmetics bars need to be produced in an unusual way, so getting a production line that could manufacture them at speed and at scale took a significant amount of work. A new development in the process took about 18 months, but it allowed the number of bars developed per day to increase from 50 to 50,000.

Ensuring that the company sticks to its ethos has been a constant. West describes a significant deal with a US distributor that fell through when the company would only accept their products in plastic packaging. For a company like Ethique, when reducing plastic waste was its reason for operation, the deal was unconscionable.

Still, as West says, these challenges are a part of business. ‘As you solve each challenge, you get more confident about anything that comes up next and things that seemed insurmountable just aren’t.’

For both companies, profit isn’t inseparable from having a purpose. Both had purposes that allowed them to find a gap in the market, reach a community and in turn, grow a successful business. As West points out, ‘it’s quite difficult for organisations that try and put purpose into a business afterwards, but because we’re purpose built from the ground up, it’s easy. We don’t make decisions that are at odds with the values we hold and we’re financially sustainable. Profit and purpose don’t have to be mutually exclusive.’

Ethique ranked 4th and Cadenshae ranked 14th in the 2019 Deloitte Fast 50.

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Jen Scouler

Jen Scouler

Senior Digital Content Advisor

Jen Scouler is a Senior Digital Content Advisor at Deloitte, working across the firm's digital communications and social media.