Catalyst

Do brands need purpose?

Harish Bhat | Updated on March 10, 2018 Published on September 07, 2017

Vision-led Brands with a purpose, such as Amul whose mission is to improve dairy farmers’ lives, often outperform the market

Consumers are actively seeking sustainable behaviour from the brands they use

Let me start by telling you a small story. Two years ago, I was a member of the global advisory council of a worldwide customer-centricity study, called Insights 2020. This study, led by research firm Kantar Millward Brown, and ten global corporations including the Tata Group, attempted to understand how brands could drive customer-centric growth. What were the factors that really made the difference? This was a large study. It surveyed 10,495 respondents in 60 countries worldwide. And what did we find out?

We found that for companies and brands which outperformed others, traditional value drivers – such as product quality, or packaging, or distribution reach – were, of course, important, but no longer provide competitive advantage, because multiple competitors have the capability to provide these to consumers. What really led to outperformance and rapid business growth were a few critical drivers. And the first of these drivers was being purpose-led.

Purpose-led brands

The Insights 2020 study found that when companies or brands were clearly linked to a purpose, 80 per cent of them outperformed the market. For brands which were not purpose-led, only 32 per cent of them managed to perform better than the market. This is a startling but very compelling result. But pause for a moment, think of brands that have been strong and sustained market-leaders, and you will realise that this is indeed true.

Think of Amul, which has had a clear purpose-led mission ever since its birth, committed to the betterment of dairy farmers and cooperatives. Think of Dove, and its purpose of nurturing self-esteem in women, by talking about real beauty. These are brands which have outperformed, and have won the hearts of their consumers, because their sense of purpose is good, clear and well known.

Making purpose pay

This finding was emphasised once again by an excellent and insightful report released recently by Unilever. Titled Making Purpose Pay: Inspiring Sustainable Living, this document presents research which shows that over 50 per cent of people now want to buy brands that are more sustainable – in other words, brands with a good purpose. It reports that Unilever’s “sustainable living brands”, which have a clear, well-articulated sense of purpose, have grown 50 per cent faster than the rest of the company’s portfolio – an astonishing result.

Clearly, as these figures demonstrate, purpose pays handsomely. This has led me to think, why do consumers prefer brands with a sense of purpose, and brands which promote sustainable behaviour? My hypothesis is that there are four key reasons for this – Connect, Conserve, Commit and Clean Up.

Connect

Many consumers wish to connect with a larger purpose through the brands that they use. They are not content with just the functional features of the product or service they buy, but they would like to feel they are an integral part of a large, positive, uplifting mission, through the brands that they use.

Keith Weed, the Chief Marketing and Communications Officer of Unilever, articulates this very well, in a conversation published in the Making Purpose Pay report. Consumers, he says, “are not just a pair of armpits looking for deodorants, or a head of hair looking for shampoo, but real people with real lives and real anxieties. Having a sustainable living purpose enables brands to connect with them at a deeper, emotional level.”

A very good example of “connect” is Tata Tea, a brand that I have been associated with. Tata Tea’s Jaago Re platform also helps middle-class customers across India connect with a larger purpose – such as gender equality, or rooting out corruption – which they feel strongly about.

Conserve

A large majority of consumers also have a strong preference for brands that help them conserve resources in their own personal lives. The resources they conserve could be water, energy, food or even medical resources. This helps them personally, and it also helps conserve the resources of our planet.

Consider the story of Tide Coldwater, the detergent marketed by Procter and Gamble in the US. This detergent is specifically formulated to wash clothes in cold water, thus helping consumers reduce their energy consumption significantly, because 90 per cent of the electricity consumed in washing machines goes into warming the water. The company then appealed to 100 million Americans to change to cold water for washing their clothes, and yes, they did, in the process making Tide Coldwater a big success.

Commit

A third reason why consumers prefer to use brands with a purpose is because it helps them to personally commit to a cause that they consider important in their own lives. This happens when the brand’s mission is aligned closely to a cause that is very important to the consumer. I can think of no better example here than Nike, which is dedicated to the sustainable purpose of fitness. The instant you wear a Nike shoe, you develop the mindset of an athlete, the drive to “just do it”. The brand stands proudly for this cause, and it helps consumers commit to fitness, a cause that is now increasingly important to so many people.

Clean up

The final reason why consumers prefer businesses or brands with a strong sustainability agenda is because an increasing number of people today, both young and old, are aware of the ecological damage that businesses and brands cause to our planet. People are aware that plastic, or electronics products that are junked, or some effluents released by factories, can create toxic waste. So, they prefer to buy into brands that help clean up this mess, or at least minimise the mess.

A good example here is Croma, the electronics retail store chain, which encourages consumers to bring back their old, unusable electronics products, and deposit them in bins kept in the stores. Croma commits to recycling these old electronics goods to minimise toxic waste. Consumers have responded very positively to this “clean up” initiative.

Remember these four Cs : Connect, Conserve, Commit and Clean Up. These are the key reasons why brands with purpose will always win.

Harish Bhat is Brand Custodian, Tata Sons and author of The Curious Marketer. These are his personal views. bhatharish@hotmail.com

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Published on September 07, 2017
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