When consumers buy something, how closely do they think about the motivation or mission behind a company and its products or services? Do they consider the company’s carbon footprint? Do they think about its contribution to society?
Increasing numbers of consumers do make these considerations. But not all businesses have these brand missions, today referred to as brand ‘purpose’, or what the company stands for beyond profit and loss.
Purpose is increasingly popular amongst brands, tapping into growing public concern with issues like climate change, human rights and social equality. Brand purpose is the part of a business that gives something back and, when taken seriously, is like the beating heart of a business and often (but not always) ties in some way to its existing products and services.
There is a lively debate in marketing circles, not about whether brand purpose is a good or bad thing, but whether brand purpose is suitable to be used in marketing at all, with impassioned arguments on both sides.
Purpose and people
Surveying 15,000 people in the UK, US, Australia, Sweden, France, Germany and Italy, we discovered two things. First, that a brand purpose is important for half (47%) of all consumers.
Second, for this group the traditional marketing concerns of price, product and place, etc. are trumped by purpose. For half of consumers, a purpose-driven company is a strong incentive to buy, with just over 46% choosing purpose as their lead decision to buy, followed by the product or service in question for just below 46%, and then the treatment of employees for 45%.
This group of consumers is hyper-vigilant about putting their beliefs about society or the environment above traditional product categories.
Purpose and marketing
When we look at marketers and their objectives and compare them to the perceived benefits of brand purpose, there is a significant overlap.
We asked 600 CMOs in those same countries about their attitudes to marketing and purpose.
When asked about their marketing priorities, the four most popular responses were to increase sales (for 74%), to win new customers (70%), improve loyalty (62%) and build a reputable brand (58%).
If we compare these responses to what marketers say are the benefits of adopting purpose, we find the same four benefits emerge: improve loyalty (71%), increase sales (69%), win new customers (65%) and build a reputable brand (58%).
From this we can conclude that adopting brand purpose matches strategic marketing objectives with a high degree of precision. There’s no reason not to adopt brand purpose – the benefits are clear.
But there’s a but
When asked whether brand purpose is important for customers, marketers were unequivocal – they recognize that it is. Seven in 10 (70%) of CMOs say brand purpose was important to their customers.
However, according to our research, only 59% do adopt brand purpose, and of those, only 19% adopt brand purpose ‘strongly’.
Why do the number of CMOs adopting brand purpose lag behind what they know to be an effective driver of marketing objectives?
There are good reasons.
On the one hand, the bureaucracy of modern businesses can make adopting brand purpose tricky. For example, 70% say internal culture held their business back from adopting purpose. Three in five (61%) cite lack of skills, and more than half (53%) cite regulation, with the same number saying adopting a purpose may have commercial impact.
Beyond these corporate concerns, another factor can act as a disincentive to marketers. Consumers value honesty in marketing very highly. According to our research, 94% say honesty is important to them when buying products or services.
Because consumers value honesty so highly, this opens up a risk for marketers. If brand purpose is adopted by a brand, customers will frown on those who fall short of their expectations.
The perception of dishonesty – even when it may be unwarranted – can have a real impact. Almost half of marketers (46%) expect the perception of dishonest marketing to produce negative ratings or reviews, while 42% expect reduced sales.
For the quarter (24%) of brands that do not adopt a brand purpose, this seems to be a missed opportunity because marketing objectives so clearly follow the benefits of purpose.
But there’s a warning for marketers.
Marketers already overestimate the extent to which their brand is trusted, with close to two-thirds (63%) saying their brand is more trusted than average – the right number is 50%.
Brand purpose has to be taken seriously in order to succeed. Those that get brand purpose wrong may find they are punished by consumers in the court of public opinion because consumers increasingly consider a company’s purpose as an essential component of its offer.
If you'd like to find out more about the importance of brand purpose, why not download a free copy of our latest report Brands that take a stand: Marketers who match consumers’ desire for purpose and honesty come out on top? It's quick and easy, just click the link below.