Purpose—A beacon for growth has been saved
Cover artwork: Tank Design
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The expectation that the purpose of businesses should go beyond maximizing profits is becoming more common. Take the 2021 Edelman Trust Barometer findings, where 68% of consumers believe they have the power to force corporations to change, and 86% of people expect CEOs to speak out on societal issues.1 Whether it’s creating a more equitable world, reaching net-zero emissions, or protecting consumer privacy, to name a few, many organizations are redefining the articulation of why they exist and how they make an impact beyond profit. For many, having “purpose” drive much of their business and operations has gone from aspiration to strategic priority.
With this elevated prioritization comes greater complexities, as businesses rethink everything from their product delivery and brand messaging to employee and community engagement strategies. Getting all this right and resonating with consumers who debate which brands to choose is no small task—especially in a world where price and quality still matter.
Still, it’s worth asking, do consumers really make purchasing decisions based on what a brand stands for? A skeptic may think that while people care about these issues, more traditional purchasing criteria, such as price, still reign supreme.
In our research of 11,500 global consumers, we found the purpose skeptics may have a point. When we asked people why they chose to purchase from a specific brand across eight different categories (automotive, travel, apparel and footwear, beauty and personal care, household equipment, furniture, electronics, and banking), price and quality were individually cited as top-three purchasing criteria anywhere between 61% and 86% of the time (that is, at least one of the two reasons appeared almost every time).
If we stopped here, we would assume that while people state they care about issues beyond end-product delivery, they often vote differently with their wallets. But there’s more to the story.
When we dig deeper, we see a number of areas where people do elevate other criteria apart from price and quality, but in a more nuanced way. For example, we found:
Taken together, we see a clear theme emerge: While all brands definitely still need to deliver price and quality, these two dimensions are largely commodity features—or table stakes—rather than differentiators. Other criteria, including purpose-related factors, then become competitive differentiators. In short, purpose is a more personal—and tailored—endeavor. When brands know whom they are serving and what those individuals specifically care about, they can position their purpose as a competitive differentiator and, as importantly, move in the direction those consumers are expecting.
And there is evidence that brands that commit to purpose are gaining that competitive advantage. When we polled 1,099 global executives, we found that high-growth brands (those with 10% or more annual growth) are translating purpose into action in markedly different ways from their lower-growth peers: They are looking at purpose more holistically. These holistic purposes are capturing a new kind of growth, one that is more equitable and inclusive across all stakeholders while tied to issues people truly care about.
These holistic purposes are capturing a new kind of growth, one that is more equitable and inclusive across all stakeholders.
We explore how businesses, and their marketers, can follow the road map of these high-growth brands and bring the customer’s voice into the organization to help ensure the brand is taking an authentic purpose to market.
How are high-growth brands activating purpose more holistically? While high-growth and low-growth brands see purpose as a means to inspire product and service delivery at a similar rate (66% versus 71%, respectively), high-growth brands are 66% more likely to see purpose as a means to guiding employee decision-making, and 41% more likely to have purpose drive the corporate social responsibility investment strategy (figure 1).
Further, high-growth brands put a premium on accountability, with 93% indicating that they have established key performance metrics related to their purpose statement (versus 72% of negative-growth organizations). Such metrics include those pertaining to product portfolio measurements (50%); diversity, equity, and inclusion (47%); and the employee review process (44%).
To position purpose as a competitive differentiator, brands can consider the following actions, based on insights derived from our consumer and executive studies:
Start with organizational “ethos,” then refine through stakeholder values. There are many internal facets that define an organization—values, company history, and, to a lesser degree, products and services offered—and that also underpins its purpose. However, stakeholder expectations and value can also shape that purpose, and different macro issues resonate with specific stakeholder groups and segments, as our consumer survey showed.
Yves Rocher, a France-based beauty and personal care brand, derived its purpose “reconnect people to nature” from the views of its founder of the same name, says global CEO Guy Flament. “Our founder was convinced that humankind, without nature, will disappear… The point is not to exploit nature but to manage our lives to be symbiotic with nature.” As such, each of Yves Rocher’s products and experiences are designed to empower all stakeholders, from employees to customers to manufacturers, to better understand and connect with this guiding purpose.3
Organizations can consider their strengths as they decide on which issues to focus to make a tangible impact. This can prevent them from leaning too far into issues for which they’re not equipped to make an impact.
Purpose requires enterprisewide alignment—and being held accountable. The highest-growth brands more often measure their purpose, from product delivery to the employee review process. Establishing key performance indicators can help ensure the brand continuously keeps its purpose front and center—and aligns that purpose across the entire organization. As former chief marketing officer (CMO) of Keds, Emily Culp, notes, it takes “humility and wherewithal to take a step back and take in every single touch point so you’re asking your warehouse employees, if you manufacture service and goods, all the way through reading social media comments [and] call log transcripts” to truly understand how your company is living out its purpose in the eyes of all stakeholders.4
CMOs connect purpose and the customer experience. Lisa Bowman, the former head of corporate relations at The UPS Foundation and global CMO of United Way, explains that “the marketer absolutely has a role in defining the why, because the why is the absolute soul of the brand.”5 CMOs are uniquely positioned to bring the customer voice to the organization and ensure that purpose is embedded in every customer touch point. This includes brand messaging, product and service delivery, and guiding the employees responsible for delivering these customer experiences. For instance, in order to keep its purpose and mission front and center for employees, global B2B technology company VMware assesses each of its product lines to ensure they closely align to “sparking innovation that creates lasting change” through its product use cases—an activity that also helps ensure purpose is top of mind for employees as well.6
The companies that continuously work to ensure that their purpose mirrors stakeholder needs, and then commit to bringing those solutions to life, are the ones likely best positioned to make purpose a competitive differentiator.
The Global Marketing Trends Executive Survey polled 1,099 C-suite executives from global companies located in the United States, France, Japan, the United Kingdom, and the Netherlands in April 2021. This survey asked chief executive, marketing, information, finance, operating, legal, and human resource officers their thoughts on a variety of topics driving the evolution of the marketing function.
The Global Marketing Trends Consumer Survey polled 11,500 global consumers, ages 18 and above, in May 2021 across 19 countries.
See the introduction to learn more about both studies.
Cover artwork: Tank Design