Companies looking for more than a short-term return are embracing purpose as a business strategy, not an add-on to business as usual. And the benefits are manifold.
Cone Communications recently conducted research to dig deep into what Americans think about the relationship between companies and purpose. The 2018 Cone/Porter Novelli Purpose Study found that brands leading with purpose can benefit from greater ease in entering new markets or launching new product lines — and their loyal followers will not only amplify the brand message, but follow up with purchase.
The results are playing out in the real world: Unilever reports that its most sustainable brands grew 46 percent faster than the rest of the business. TOMS founder Blake Mycoskie grew an empire with revenues of more than $392 million — that has also impacted at least 51 million lives. And Harvard Business Review published research showing that purpose-driven companies can be more profitable when purpose is part of the business strategy and is clearly communicated throughout the organization.
Expanding Consumer Base — and Profit — Through Purpose
Purpose can create relationships on a far deeper level with consumers by connecting with them based upon shared values and issues, as opposed to just product attributes and price. Consumers of purpose-driven brands are redefining modern-age loyalty. They are personally invested in the brand and its success — they feel pride being associated with the brand and eagerly defend it. Moreover, purpose-driven brands are poised to gain both new customers and market share.
Nearly nine out of 10 (88 percent) consumers say they would buy a product from a company leading with purpose. And purpose-driven brands engender a deep loyalty that means their brand advocates will not only try new items (75 percent), but even pay more (57 percent) just to lend support to their favorite companies.
Purpose also acts as a strong differentiator on the shelves to attract new consumers. Americans say they are willing to go outside their typical purchases to give a purpose-driven product a shot (66 percent). This gives companies the flexibility to enter new markets and offer new product lines, knowing that their devoted followers will join them on the journey.
Engaging New Audiences Beyond Product Attribute
To fully understand how a brand can use purpose as a lever to engage with new audiences, we conducted a social media analysis to supplement our primary research. For this work, we performed a cluster analysis of the social media followers of three outdoor retailer brands with varying degrees of purpose communications: Cabela’s, REI, and Patagonia.
For Cabela’s, a brand with very little purpose communications, we found social follower clusters you’d expect from an outdoor retail brand, such as “Hunters,” “Pro-Fishers” and even “Country Music Fans.” But looking at REI and Patagonia’s clusters, companies with purpose embedded at the core, we see new audiences emerge like “Liberal Activists” and “Environmentalists” — these brand followers are looking far beyond product attributes.
The benefit of engaging with these new audiences is significant, as these brand followers are also likely to be brand amplifiers. Digging deeper, we found REI’s “Liberal Activists” tweet at a rate of 25 tweets per user per month compared to Cabela’s “Hunters” group, which produces around 4 tweets per user per month. Patagonia’s most active social media followers, the “Liberal Activists,” are tweeting at a rate of 36 tweets per user per month, far outweighing Cabela’s most active social media group, “Sports Fans,” who are engaging at a rate of 16 tweets per user per month.
Here we see that not only does leading with purpose allow you to gain new brand followers who are engaging beyond product or promotion, but these groups also tend to be the most active to further amplify your brand message.
Brand Amplification Leads to Brand Purchase
Having an engaged and vocal group of consumers to share your purpose message is a powerful thing, but can it lead to an increase in the bottom line? Our research also found a strong correlation between sharing and buying.
Among Americans who said they were more likely to socially share content from purpose-driven companies than traditional companies — let’s call them our “Purpose Ambassadors” — there is also a strong correlation to revenue. Ninety-five percent of Purpose Ambassadors said they would purchase a product from a purpose-driven brand.
It’s clear we’re in the middle of a revolution in how we do business — the evidence ranges from Blackrock president Larry Fink’s bold letter asking CEOs to think more about the social impact of their companies’ activities, to Danone North America’s move to become the world’s largest B Corp. Leading with purpose is more than the right thing to do. It’s showing results in the form of corporate resilience, greater brand affinity and amplification and, most importantly, positive impact on the bottom line.
Whitney Dailey is vice president of marketing/CSR research and insight at Cone, a Porter Novelli Company.
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