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Purpose driven brands lead on business performance

by Madalina Carstea , 08.09.2022

More than just a hygiene check, it’s crucial for a company’s success to build a purpose driven brand with values people resonate with.

The growing trend towards brand purpose and integrity is now an increasingly important way to drive consumer affinity. Customers expect brands to not only provide a really good reason for shopping with them, and to be clear and transparent with their offering, but also to be purpose driven and align with their values.

Though this was already a growing trend pre-pandemic, coronavirus caused people to think more about what is important to them. Many have reassessed their jobs, homes, what they put in their kitchen cupboards, how and what they eat, how they socialize, and the importance of family and community.

Drastic changes in consumer behavior mean brands must rethink how they connect with their customers and earn a place in their new lives, with a stronger focus placed on honesty, social awareness and integrity.

Drive brand equity through social purpose

In the midst of the pandemic, the George Floyd protests in the United States and around the world gave brands perhaps the most profound glimpse yet into just how important it is to be purpose driven and demonstrate strong social responsibility. In a GfK Consumer Pulse study conducted at that time, 74 percent of Americans said how companies behaved during the protests would affect their desire to purchase from them in the future. Marketers who are able to address political concerns like BLM and the Ukraine Crisis may secure a stronger sense of loyalty with their customers. A Brand Keys study revealed 85% of surveyed respondents along bipartisan lines would boycott Russian brands to show solidarity with Ukraine.

Building purpose driven brands is particularly effective with the younger generation, forming a major part of their consideration when purchasing. Especially on social media, people are increasingly challenging companies to take a stance beyond their products and services, and to share their broader social impact. GfK Consumer Life research found 65 percent of Generation Z women expect the brands they buy to support causes important to them.

“Consumers expect companies to give back as standard,” says Lember Gordon, Head of Marketing at American Golf, Europe’s largest golf retailer, with 97 stores in the UK and Ireland, as well as an online platform selling equipment and apparel. “COVID-19 shifted consumer expectations even further. Doing what it says on the tin is no longer enough. Shoppers want to support brands with a conscience because it makes them feel better.”

Brand is central to American Golf’s mission to disrupt perceptions of golf, including making it more appealing and inclusive to women and children. Its social purpose, particularly around diversity and inclusion, is integrated into its business strategy and a large portion of its marketing activity stems from this commitment.

 
 

The retailer is helping to break stereotypes in golf, for example by investing its marketing budget in sponsoring the Rose Ladies Series and partnering with disabled golfer Brendan Lawlor. It also supported the ISPS Handa World Invitational 2021, Europe’s first event where male and female golfers played for an equal prize fund, and the On Course Foundation, which uses golf to support unwell service personnel and veterans.

“Establishing a real brand purpose is essentially defining what our company’s ethics are,” says Gordon. “Having a brand purpose provides a focus for activity, which in turn makes the entire marketing function more efficient. A lack of brand purpose is costly.

“Consistency is also important. Our consumer website carries the same brand values and design as our physical stores. Our staff, customers and stakeholders all receive the same brand messages; they all know we champion inclusivity. When the brand is working consistently, the company’s personality and vision can be amplified via tactical activity.”

The growing importance of brand purpose means the whole objective of marketing is evolving from seeing brand predominantly through the lens of products and services, to thinking about how it can do that while also capturing the company’s wider values.

 

Volkswagen's former Head of Brand Project House, Kuo-Hi Lee, says the challenge is taking a holistic view across all touchpoints to prove this more nuanced proposition and create credible brand experiences. She references two multinational organizations, Unilever and Patagonia, which have successfully achieved this.

“They were purpose-driven companies before it even became a buzzword in marketing,” says Lee. “Other brands simply try to react to societal issues as they occur, without understanding a purpose-driven strategy requires a long-term commitment in which propositions must be proven through actions and, often, business growth redefined to ensure success in the long run.”

Countless studies have now reinforced the link between purpose driven brands and business performance, including recent research by Deloitte where globally, 57% of consumers are more loyal to brands that commit to addressing social inequities in their actions. A further study found 42 percent will only buy from brands that align with their values.

“Companies absolutely must be mindful that social responsibility is now key to attracting and retaining customers,” says Gonzalo Garcia Villanueva, Global Chief Marketing Officer at GfK, which has invested in artificial-intelligence technology to deliver new kinds of brand insights and measure brand integrity in a fast, meaningful way.

“Most organizations are finally realizing that social-impact initiatives are not just good for the world, but also for business. Consumers are increasingly driven by social conscience and they also want to buy from brands whose values they see themselves reflected in.”

Crucially, people are not only driven by purpose as consumers, but also as employees. For instance, 33% of high-growth organizations have established key performance metrics for diversity in talent retention, compared with only 17% of negative-growth organizations. A motivated team who feel invested in their employer’s values are more likely to perform.

Brands that choose to ignore this run the risk of alienating a rapidly growing consumer base and disenfranchising employees, which could have a detrimental impact on business performance. However, social purpose and integrity can only be genuinely impactful if they are authentic and aligned specifically with the core values of the brand.

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