It is said that brands without purpose, brands that are not aligned with the values and beliefs of their audiences, are destined to disappear. Is this true?
The world has changed and with it the brands. Between the 80’s and 90’s, communication between brands and consumers was not bidirectional. Brands spoke and consumers decided whether to believe them or not; there was very limited communication. But, after the digital revolution, everything changed. Online conversations were a window for consumers to express opinions, concepts and points of view, forcing brands to listen to needs. However, the real change came with the birth of social media.
People today care more about their purchasing decisions. It is now a reality that, although some product or service features are relevant when it comes to being loyal to a brand, it is not as important as the type of impact that brand is generating.
Currently, for brands, having a reason to exist established at the center of the business, more than a strategy, is a requirement. Most companies know the “what” of their brand, related to the product or service they offer; most know their “how”, related to the delivery of value they provide with that product or service; but very few know the “why”, what is their reason to exist, the cause that drives the business, and that is where purpose becomes relevant.
Companies that have worked on the “why” and have managed to build a conscious and real purpose, are the ones that demonstrate a commitment to making the world a better and more equitable place. They don’t just do it to look good, or to feel good, they do it to make a difference to their competitors and to become something of great value to the people who feel an affinity with what they do.
It’s a fact that brands that honestly drive their purpose will be the only survivors in the changing marketplace. Loyalty is becoming increasingly complex due to the sheer volume of supply, and people no longer want nice-to-have marketing campaigns, they want brands committed to issues of interest, they are attracted to brands that take a stand on a relevant issue.
Simon Sinek, leader, writer, and creator of the concept of “The Golden Circle”, a great metaphor used by many companies to understand in depth what their business is all about, sums it up very clearly: “People don’t buy what you do; they buy why you do it. The goal is not to do business with everyone who needs what you have. The goal is to do business with people who believe what you believe.”
Ultimately, the brands that have understood the new value they must deliver to the world, or those that in the short term will do so, will be the brands that significantly improve perception and reputation. As a result, they will improve loyalty, which leads them to be leaders in their category.
Before creating and writing a purpose, it is necessary to find your brand‘s “why”
Although companies generally believe that the purpose of business is to generate awareness, consideration, and loyalty among people, they are mistaken, or at least they have not realized that the true potential of a purpose lies in generating cultural value and a sense of belonging in the society they are focused on. This is more than a strategy; it is a necessity.
The first thing that must be clear is that the purpose is not the brand’s slogan, neither is it the “nice phrase” that the manager or some leader came up with after a brainstorming session. It is not the mission, the vision, or an endless list of values, and it’s not that sentence in the signature of the email that says that the company cares about the environment so that’s why you should think twice before printing the email.
It is necessary to go much further. To build a brand with purpose, you must have a deep and clear understanding of what the brand represents, its values, its vision, it’s pillars, and the ideals of those who are responsible for it. You must start asking yourself: why does it exist? And the answer must not go related to money or to gaining market share. For example, Tesla’s why is “To accelerate the world’s transition to sustainable energy”.
In the example above, it is clear that the answer must be sincere and in-depth. The answer to Tesla’s “why” is not to build electric cars that help the environment. And neither is to be a leading company in electric vehicle propulsion components, solar roofs, and home batteries.
Other thoughtful questions to ask are: what is the impact we seek to make on society, and what values and/or beliefs drive decision making?
These are easy questions with hard answers. That is where it all begins. This is the starting point as a process of discovery and definition in order to create a “Meaningful Brand”. It means a brand that has found the right path, that has a solid foundation on which to build a sincere narrative and act on it.
In a global analytics study by Havas Media Group, which included an analysis of more than 300,000 people and more than 1,500 brands from 15 industries in 33 countries, there are very interesting findings on measuring the impact of purposeful brands.
It can be evidenced that significant brands, those with an active purpose, outperformed in the last 10 years by 206% with respect to the perception of their value.
It is also evident that brands with an established and clear purpose increased their KPI’s by 137% compared to brands that are in the market without a meaning related to an intention beyond just doing business.
In addition, there is an alarming fact that says that people would not care if 77% of the brands disappear from the market. This confirms that there are more brands that make “noise with their purpose” than those that are truly generating impact with it.
However, it is relevant to note that having the right purpose and putting it into practice is equally important. You have to communicate it, but the challenge is to do it organically, so that it feels real. The key is how the purpose is used within the brand story, or storytelling as it is commonly called in the media.
What is the real end goal of the purpose?
For some companies, the ultimate goal is to become a more attractive option for their audiences to grow the business. Surely, thinking this way won’t get them very far. Sooner or later the truth will come out. For those that truly believe in their potential, it is to create a business that lives and breathes on inspiration, on innovation and on generating positive change.
That’s why, it’s important to take it beyond the paper. It has to be communicated, not only externally, but also within the company, and it is important to do it in a clear and coherent way. Then, you must align it with operations. Business practices must be focused on the actions defined. Finally, it is necessary to measure it, to see what impact it is having on the business, on people, on the product or service and on the market.
Be true to what you believe in
As we said earlier, the idea of purpose-driven brands came about because brands decided to listen to what their audiences wanted and became proactive by siding with their needs and beliefs.
For these reasons, today it is not enough to be very good at what you do as a company, or to be a leader at any cost. You need to get to the heart of consumers and empathize with their way of thinking, interacting, and behaving in the world.
If you feel, after reading this blog, that it is imperative for your company to determine a philosophy that revolves around the reason for its existence, rely on Interfaz. We have a proven methodology to show you how defining and implementing your purpose will set you apart from your competition. Remember that a company with a clear purpose will have a greater chance of exponential growth and development.