Purpose done properly drives profit
Yet more evidence that ‘Purpose’ creates value was published today by Unilever, but many brands are still struggling to define and leverage their purpose to generate value.
For the uninitiated, a brand’s purpose is made up of two parts; the value created for customers through purchase, and the value employees and customers get through their direct involvement in helping a brand make a positive impact on society.
It’s the second part of this equation that many struggle with. Purpose done properly builds a set of values and behaviours within a business that has a positive impact on society and the environment, which influences the attitudes and actions of customers and employees towards the brand and business. Value is created at two levels;
In a more competitive employment market, a business’s values are increasingly influencing decisions to join and stay with an employer; and more than that, they can create powerful advocates. Purpose done properly provides a powerful platform and clear direction for employee engagement, helping generate even greater value out of a business’s most valuable asset.
Over the last 10 years there has been significant growth in brands that seek to reflect a customer’s values to motivate engagement; this is not a trend, it reflects a societal shift in attitude and behaviour. The three key drivers behind this are:
1) Differentiation, in a world where price, product attributes and promotion are indistinguishable, purpose cuts through and connects with customers on a deeper level than transaction, it connects with their values and gives them a greater sense of meaning.
2) Transparency of the world we live in; If people are watched they are more likely to do good, and want to be considered as good. Status is a huge influence on behaviour; increasingly the brands we engage with reflect our values and therefore how people judge us.
3) Rising anxiety for the world we live in, caused by prejudice, inequality, poverty, other social injustice and climate change. People are seeking solutions to alleviate these anxieties, and increasingly expect the commercial brands they engage with to have a positive impact on society and the environment, not just a claim to have a neutral impact.
Purpose done properly aligns your employees and customers behind your commercial endeavour through your values. And therein lies profit.