CEOs and other leaders have increasingly been focused on building brand purpose. Companies such as SY Partners, BCG, and StrawberryFrog are specialized in helping companies define brand purpose. But, until now, there has not been an empirical study of purpose brands.
The Business Roundtable, with the signatures of 181 CEOs, committed to lead their companies with purpose for the benefit of all stakeholders — customers, employees, suppliers, communities, and shareholders. This breakthrough has inspired a “purpose race” as company leaders seek to find their “why.” In a recent article in the Harvard Business Review, leaders have been told to put purpose at the core of their strategy. Today, there is the first-ever empirical measure of brand purpose. For the business skeptics, this research study with 17,500 responses proves that brand purpose leads to clear business and performance advantages. But the greatest learning of all? That having a brand purpose is good, but activating it effectively over time is crucial.
Leading a company is challenging in the best of times, but now, in turbulent moments like these, the order of difficulty is no doubt magnified. At the same time, we are witness to history in the making, as a broad social movement for racial justice produces change in real time along with rising anxieties among employees and consumers caused by Covid and economic disruption. What’s clear is that companies with a clearly defined and actualized purpose are providing reassurance, courage, and leadership, helping them weather the storm and recover better suited to thrive in the months and years ahead.
But one important aspect seems to be missing in all this: the consumer perspective. Does higher purpose provide a clear business advantage? Does it really matter to the general public, and if so, who is getting it right and why?
Galvanizing the people who matter inside and out
That’s exactly what we at StrawberryFrog set out to learn. We wanted empirical data, since we specialize in activating purpose brands over time to the people who matter to your brand inside and out. The challenge many companies face is launching brand purpose with bold moves to the adulation of company leaders, but seeing that purpose decay over time, not having penetrated the middle and bottom of the organization 18 months later. To overcome purpose failure, StrawberryFrog specializes in designing and igniting a movement inside the organization–an approach we have honed for over 20 years working with some of the world’s most iconic large companies, such as Google, Walmart, P&G, SunTrust Bank, and Mahindra.
StrawberryFrog partnered with well-regarded research firm the RepTrak Company (led by Kylie Wright-Ford) to conduct a large-scale research study on the topic. The result is the Purpose Power Index (PPI), the largest study ever measuring perceptions of brand purpose, which is based on more than 17,500 individual ratings among over 7,500 U.S. consumers, and encompasses more than 200 brands. The 204 brands were carefully selected to be a kind of representative “market basket” of company and product/service brands, comprising a representative mix of competitors within each of a diverse range of 14 industries and categories, from airlines to consumer packaged goods to banks and beyond.
One of our major findings in the Purpose Power Index (acknowledged by Fast Company as one of the biggest ideas in the world for 2020) is that purpose does indeed matter to the public, clearly driving behavioral intent. Our research toppled traditional brand indexes and trust measurements. The winners and laggards are a different range of names. Consumers reported that they are much more likely to buy, recommend, invest in, and want to work for brands they consider highly purpose-driven.
But a darker finding also emerged. Not only do consumers find few brands to be strongly purposeful — they find most brands to be UN-purposeful. Of the 204 brands in the study, only seven of them (3 percent) were seen as strongly purpose driven, while nearly two-thirds (64 percent) were viewed as weak or poor on being purposeful. These low scorers include some brands you might expect to be seen as highly purpose driven — for example CVS, Panera, Airbnb, Nike, and Starbucks.
To understand who the top purpose leaders are, we, together with the analysts at RI, created an algorithm to score companies and brands on the degree to which consumers see them as driven by higher purpose. Brands needed to score highly on three of the four following questions to be considered purpose driven:
- Does the brand have a higher purpose that’s bigger than making money?
- Is the brand changing the world for the better?
- Is the brand improving the lives of people and their communities?
- Does the brand do things that benefit all stakeholders, not just shareholders?
On the basis of the algorithm, seven brands rose to the top as being “excellent” (70 percent or higher) — Seventh Generation, Toms Shoes, Method, REI, Wegmans, Stonyfield Farm, and USAA.
From passive purpose to business results
Here are the three critical things these brands are doing differently when it comes to purpose:
1. Activate boldly
It may seem obvious, but many brands forget to actually do something with their “why.” It sits dormant in the “About” section of their website, or on company coffee mugs or posters. Other brands may create a poignant anthem video about their purpose and circulate it for a while — but do little else, apparently expecting the purpose to self-activate inside their business and out. Which, in our experience, it seldom does.
The PPI data identified two defining characteristics of top purpose leaders that separate them from the rest of the pack: acting on it boldly and communicating authentically.
We’ve certainly seen examples of brands failing to do both (e.g., Pepsi and the Kendall Jenner ad debacle), while top purpose brands like Seventh Generation, REI, and SunTrust Bank (now Truist) build credibility by starting with an action, and then communicating about it by sparking a movement, rather than relying on traditional advertising and communications. As Susan Johnson, CMO of Truist, said, reflecting on her work at SunTrust: “Financial stress was too widespread in America to be addressed by a simple ad campaign. Through the onUp Movement, we could declare to the world that we could hear them and that help is on the way. Movements mobilize the masses and create confidence.”
2. Take a holistic approach
The PPI research reveals that to consumers, purpose is not simply a “why” statement. It is a holistic narrative in their minds about your entire company or brand, how it operates in the world, how it treats people, and what issues it champions. Consumers see our top purpose leaders as excelling in four domains of purpose activation:
- Purposeful products, services, and operations — e.g., selling products and services that make the world better, operating in an environmentally responsible way
- Community and philanthropy — e.g., promoting charitable giving, supporting welfare of communities
- Employee advocacy — caring for the health and well-being of employees
- Social activism — taking a stand on major societal issues
A good example of a company telling a complete purpose story is REI. It’s true that the brand is front and center with #OptOutside, it’s social activism platform. But the company does a lot more than #OptOutside. The company has published its strenuous Product Sustainability Standards, it regularly makes the Fortune 100 best companies to work for, and it gave back nearly 70 percent of profits to the outdoor community after a year of record revenue in 2016.
3. Spark a movement (use “movement think”)
Our top leaders frame their purpose in a way that the public can more easily engage with emotionally. People don’t join a purpose, they join a movement inspired by a purpose. Some examples from our top seven:
- #BelieveInA7thGen — Seventh Generation
- #OptOutside — REI
- People Against Dirty — Method
- One for One — Toms
- Putting People First — Wegmans
- Obsessively Organic — Stonyfield Farm
SunTrust Bank is an excellent example of activating purpose via a movement. While no bank brand made it into our top tier, SunTrust is the number one purposeful bank in our PPI study, scoring far higher than its larger competitors (e.g., Bank of America, Chase, et al.). Five years ago, SunTrust sparked a movement against financial stress and for financial confidence called #onUp, short for “Onwards and Upwards.” As part of the movement, we were able to activate thousands of internal stakeholders to participate, as well as ignite financial literacy among millions of American consumers. As of early 2020, over five million consumers were members of the onUp movement.
As we enter an era dominated by the pandemic, purpose will continue to be a top priority for company and brand leadership. While our research shows consumers clearly favor businesses with a higher purpose, it also shows that we are by no means dealing with a naive consumer when it comes to purpose. The general public has high expectations that brands are largely failing to meet. We hope these data and implications will not be discouraging but rather a challenge to the U.S. C-suite: boldly activating your purpose in a holistic way by sparking a purpose-inspired movement among your stakeholders.
The post How Does Your Brand Purpose Stand Up? appeared first on Inc. and is written by Scott Goodson and Chip Walker
Original source: Inc.
