Businesses and brands are more powerful than ever – especially Millennials and Gen Z expect brands to use this power responsibly. We have seen this trend grow during the COVID-19 crisis. We discussed the concept of Brand Purpose – business with higher purpose, with consultants from Kantar Agency Jonathan Hall and Martin Krajniak. You can look forward to learn more at BLF CSR Summit on 13 October at 9.15.
How would you define Brand Purpose and where does it fit in business strategy?
But even before COVID, we were seeing a fundamental re-shaping of business strategy. The Financial Times noted in launching its New Agenda this year, “it is time for a reset…we challenge you – leaders in the boardroom and beyond – to protect the future of free enterprise and wealth creation by pursuing profit with purpose”; and Larry Fink, the Chairman & CEO of the world’s largest investment firm, Blackrock, asserted in his annual letter to shareholders that “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”
Purpose, then, is the positive impact a brand seeks to achieve in people’s lives. It is the reason a brand exists beyond profit and is single-minded in how it addresses social and/or environmental issues. It is central to business strategy and is increasingly becoming a CEO-level issue.
Are purpose-driven companies more successful?
Kantar’s proprietary BrandZ database covers over 3.7 million consumer interviews and more than 165,000 different brands in over 50 markets. BrandZ tells us that brands recognized as having a high commitment to Purpose have grown significantly in brand value, by 175% over a 12-year period. Conversely, brands with low perception, have grown by only 70% over the same time period. A purposeful brand is 30% more likely to be recommended by customers to others.
Two recent examples from Slovakia confirms that purpose-driven brands and campaigns have high chances of being successful. Absolut campaign “Slovensko žije všetkými farbami” that generated a massive spontaneous publicity, has improved brand perception. Campaign also won Bronze on New York Festivals in Marketing strategy and effectiveness category.
O2 campaign “Dátuj zodpovedne” had the ambition to prevent especially young drivers form using mobile device while driving. Also this campaign had quite strong impact and delivered intended KPIs – it was recognized by 60% of young drivers (18-25y) out of which 50% stated that campaign motivated them to consider the mobile phone usage while driving.
What are some of the misconceptions about Brand Purpose?
There are two common misconceptions worth touching on here. The first is that Brand Purpose is just the province of the Marketing department and is solely focused on the consumer audience. In actual fact, in order for a Purpose to fulfil its role in having the positive impact a brand seeks to achieve in people’s lives, it has to permeate all levels and functions of the organization, and drive all stakeholder interactions – both internally and externally.
And the second is that Brand Purpose is something inherently woolly and difficult both to define and to quantify in terms of impact. It is self-evidently true that a Purpose has to be inspirational, and is likely to be multi-layered in its content, but that does not mean it is either vague or lacks concrete impact. On the contrary, the best examples of Brand Purpose combine visionary intent and execution with laser-like focus and demonstrable stakeholder impact.
How is this concept perceived in Slovakia?
While discussing this topic with Slovak clients, the hardest job is to agree on what Purpose really is and how it differs from “standard” CSR activities. This is then strongly connected to first point that Jonathan made – to finally convince decision makers that Purpose is definitely NOT a CSR-specialist, nor marketing department related discipline. Purpose is about way company makes money, not just giving away some of the money they earned.
How can we as customers verify authenticity of a company´s approach?
Authenticity is central to the concept of Purpose. In recent conversations with our clients, many have expressed a desire to ‘re-claim’ the concept of Purpose, feeling that it has been hi-jacked and is in too many cases being used as a new term for Positioning.
At Kantar, we see five factors as key in articulating an authentic Purpose. It must be meaningful to people, resolving a societal tension and localized in a way that truly connects with consumers. It has to be true to the company and the brand, rooted in its DNA and with concrete and credible reasons to believe. It should be unique and differentiating within the category. It ought to be coherent in everything it says and does, both internally and externally. And last but not least, it needs to be business-proof, clearly structured to deliver long-term growth and impact.
What are the most important steps how to introduce this concept into business?
There are four key characteristics of introducing it into business. It´s leadership-driven: unless the Purpose has public endorsement from the top, the programme will be doomed to failure. It´s culture- and strategy-led: you need to engage both the heart and the brain. It´s 360 degree-executed: don’t just focus on external alignment – the internal execution has to be treated as a communications campaign. It´s impact-measured: do the hard work of getting the metrics in place, take the learnings on board and adapt strategies accordingly.