How important is it for brands to have a “purpose”?
Research conducted in 2012 by Edelman shows that consumers increasingly want brands to stand for something beyond the functional delivery of a product or service. It also shows how people globally are willing to pay a premium for a brand they consider to have greater ‘purpose’. We wanted to see if marketers understood how brand ‘purpose’ could drive brand loyalty and sales so we asked the members of the World Federation of Advertisers. 149 people from over 40 countries and 58 companies representing over $70 billion in ad spend responded. And what did we learn?
1. It IS ok to do well while doing good. Marketers seem to seriously underestimate the extent to which consumers say it’s ok for companies to support good causes and make money at the same time. 76% of consumers agreed that companies can make money while supporting good causes. Marketers thought that only 56% of consumers would agree. This represents a big opportunity for companies
2. Purpose is more than CSR or philanthropy. When defining ‘purpose,’ top of mind for marketers is ‘creating programs to positively impact communities’ and ‘protecting and improving the environment’. OK, these are important to consumers. But consumers don’t consider ‘purpose’ in quite the same way. The ‘purpose’ behind the brand is more holistic than marketers think and is based on every touchpoint an individual has with that brand or company. And this starts with the ability to ‘listen to and act upon customer feedback’ and ‘ensuring good employee welfare’. When ensuring their brand has a strong sense of purpose, brands need to start with the basics. This means involving sales, CRM, HR and others. Marketing can then be the conductor that delivers a message imbued with brand purpose. And that message is authentic as it’s not just rhetoric. It pervades the entire organisation, starting with the CEO.
3. Look beyond developed markets. When asked to choose which regions had the greatest proportion of purpose driven consumers, marketers overwhelmingly plumped for Europe (58%) and North America (36%). But Edelman’s research shows that the rapid growth economies of China, India, Brazil, Indonesia, Malaysia and UAE are the most purpose driven and the most likely to pay a premium for brands with purpose. Has the downturn changed priorities in North America and Europe? In traditionally collective societies where poverty and hardship are more evident, is the need for purpose more ingrained? Was purpose a fad in the West but of longer term Eastern promise?
4. Purpose will be critical going forward. But we haven’t worked it out quite yet. 88% of marketers said that purpose would be increasingly important to building brands but only 49% agreed that they worked for brands with a sense of purpose. Even fewer (38%) considered they had been successful in communicating purpose. More than half of respondents thought it was relatively new to talk about purpose as part of the brand marketing communications. Some brand owners seem to be doing it better than others according to marketers’ ranking of the companies which best embraced a sense of purpose. See for yourself who came top.