There is no shortage of reasons to rise to the challenge of leveraging your brand’s resources and reach to address the many social challenges we face, from climate change, to environmental degradation, to loss of biodiversity, and beyond. But any sober assessment of whether this is likely to happen must account for the realities that businesses face, whether it’s pressure from Wall Street, a competitive landscape crowded with incumbents and newcomers, or the significant challenge of simply surviving in an increasingly complex and fast-changing business landscape. Fortunately, a conspiracy of shifts in culture, technology, and demographics now means that business is truly incentivized to lead with its purpose and to build its brand by making a positive impact on the world. Here are 10 reasons why:
- Consumers prefer caring brands: According to the 2015 Meaningful Brands report from Havas Media, a meaningful brand has a 46% higher “share of wallet” – defined as how much a person spends on a particular product – than a low-scoring brand. In addition, the top 25 meaningful brands outperform the stock market by 133%.
- Being meaningful to consumers drives sales: As consumers become ever more aware of the compounding social crises our societies and planet face, they are looking to brands to make a difference that is meaningful in their lives. Here are five charts based on the Havas Media Report that show how meaningful brand actions impact consumer purchasing decisions around the world.
- Socially responsible brands outperform others: Unilever is just one of the many global brands now reporting the accelerated growth of socially responsible brands. Paul Polman, CEO of Unilever, went so far as to assert that such brands “accounted for half of our growth in 2014 and grew at twice the rate of all the rest of the business,” according to Reuters.
- Socially responsible brands are top of mind: According to this year’s Good Must Grow survey, when asked to provide the name of a socially responsible organization, consumers are now more likely to name for-profit companies, rather than nonprofits. The top three companies were Toms, Whole Foods, and Microsoft, but the top 20 companies listed below reveal the growing importance of purpose in brand awareness of for-profit companies.
Image credit: 2015 Good Must Grow survey
- Your employees aren’t that into your company: According to Gallup’s, State of the American Workforce report, over 70% of American employees are not engaged at work. Gallup goes on to explain that the root of the problem is that these employees are not emotionally connected to their companies. This is where purpose can play a powerful role by aligning employees and the company around shared values.
- Purpose builds brand trust: According to Edelman’s 2015 Trust Barometer report, the contribution of a brand towards the greater good plays a defining role in whether that company is trusted more or less. As indicated in the chart below, brand trust has a direct impact on consumer-purchasing decisions, which ultimately will determine the profitability and growth of a company.
Image credit: Edelman Trust Barometer Report
- Purpose elevates category leadership: As we have seen with well-known CEOs such as Elon Musk, Howard Schultz, and Paul Polman, the purpose of a brand serves as a powerful platform from which leadership can speak to cultural issues that transcend the products, services, or category of any one company. Howard Schultz’s dialogue around issues as far-ranging as gridlock in Congress, boycotting political campaign donations, same-sex marriage, post-traumatic stress disorder, online employee education, and most recently racism, have kept the Starbucks brand top of mind and allowed it to become a force that shapes culture in-line with its core values and vision.
- Purpose drives timely innovation: CVS is just one of many companies that has allowed new drivers shaping the business landscape to inform the role that purpose plays in its future. By banning tobacco products, renaming itself CVS Health, and relaunching the brand’s marketing around the theme ‘Health is everything,’ it has positioned itself to lead the future of healthcare.
- Purpose expands brand awareness: When a brand fully leverages its purpose, it collaborates with for-profit and nonprofit organizations that are mission-aligned to scale its impact. In doing so, brands accelerate awareness of their own values and mission and inspire greater loyalty from existing customers and fresh interest from new customers.
- Brands cannot survive in societies that fail: Arguments based solely on the bottom-line pale by comparison to considerations of the toll we are exacting on the planet on which we depend. There is no shortage of data on the urgency for action, but perhaps there is no more compelling way to communicate the need for accelerated and purposeful efforts by business than this gallery of images.
If you’d like to position your company as part of the solution rather than the problem to these compounding social crises, and unlock the employee and consumer goodwill, loyalty, and purchases that follow, you must take three critical steps. First, you must elevate the role of purpose within your company. Second, you must communicate that purpose clearly to your employees and give them roles to play in the solution. Third, you must collaborate with customers, communities, and partners to accelerate and scale your impact so that you can make a meaningful difference to our future in ways that will inspire all stakeholders to support your business. To find out more about how you can accelerate the integration of purpose into your business, visit WeFirst15.com for details about the last year’s Brand Leadership Summit.
For more on why marketing must go deeper than merely reflecting customers’ voices, see For the Modern Marketer, Hearing (Market) Voices Is a Good Thing.