It’s the festive season and as we spread happiness, love and gifts all around, what better time to think about whether our brands can achieve better brand health & wealth by focusing on the larger good?
The answer lies in defining a brands’ purpose or simply put defining, “What are the higher order emotional and social benefits that consumers can derive from choosing our brand?”
For marketers in India, there has never been a better time to start ‘doing good’.
Four headwinds converge to provide a compelling argument for building a purpose-driven brand today.
1) High social consciousness amongst Indian consumers
The last decade has seen a rise in global social consciousness. What is even more heartening is that three-fourth of Indian consumers are willing to pay more for goods and services from companies that give back. This puts India’s levels of social consciousness at the highest percentage amongst online respondents across 58 countries surveyed in Nielsen’s Global Survey on Corporate Social Responsibility.
2) Increased connectivity and access to company information
Gone are the days when consumers made impulsive brand choices on the shop floor. Today’s consumer takes more informed decisions, actively researching brand antecedents, ingredients and benefits before making purchase decisions. Brands that have a purpose are seen as having strong values, consumers trust these brands and this influences brand choice.
3) Declining functional differentiation and margin pressures on brands.
Creating functional differentiators is more costly while the window of opportunity created by a functional or price differentiator is short lived. All the more reason for brands to stand for a larger, long-term purpose that outlives typical product life cycles.
4) Government support for CSR initiatives
To make things even easier for marketers, in 2012 the Indian Companies Act mandated CSR for certain company categories, opening the doors for CMO’s to get additional funds for brand driven social & community initiatives.
What’s more, there’s a strong financial pay-off in ‘paying back’
A brands’ profit motive is not delinked from its higher purpose. In fact, a brand could be more profitable if it weds itself to a relevant, strong and sustainable brand purpose.
Studies show brands that are ranked high on Brand Purpose positively correlate with better financial and stock market performance.
In line with Unilever’s purpose “to make sustainable living commonplace”, Lifebuoy embarked on an ambitious program to promote hand washing with the aim of reducing preventable diseases like diarrhea. Not only did the initiative impact the hand washing behaviors of 183 million people in 14 countries by 2014, the brand has also seen three years of double-digit growth to become the world’s number one anti-bacterial brand.
For PepsiCo, its ‘Performance with purpose’ initiative is a vision to deliver financial performance over the long term by integrating sustainability into its business strategy. “Performance with purpose helps drive our business growth and prepares us to meet the needs of our changing world,” says Indra Nooyi, chairman and CEO at PepsiCo.
An added bonus of having a higher purpose is to the ‘employer brand’. A purpose driven brand helps organizations attract and retain good talent especially amongst Millennials. As per the latest Millennial Survey 2015 conducted by Deloitte, 40 percent of Millennials reporting high job satisfaction and 40 percent who plan to remain in their jobs with their current employer beyond 2020, say their employers have a strong sense of purpose beyond financial success.
Consumers not only buy ‘what you do’, they also buy ‘why you do it’
For a brand to truly derive the brand value and financial benefits of a strong brand purpose, it requires a long -term commitment. We outline below the 4 key elements of a successful purpose-driven strategy
1. Choosing the right brand purpose that integrates well with the business strategy and inspires both employees and consumers.
2. Extending the purpose to a set of measurable, time bound initiatives. These would include both long -term and short -term quantifiable goals.
3. Putting the brand purpose at the heart of the organization to make it big, meaningful and truly impactful.
4. Communicating the purpose and programs effectively. Not just in PR and social media but across all brand communication be it TV, print or digital.
Before concluding let’s dispel the notion that purpose-driven branding is only for large corporates. The Body Shops’ early success can be largely attributed to its all natural ingredients and ethical practices. In fact, it might be all the more relevant for smaller brands and start-ups looking at creating differentiation in commoditized markets. Some recent examples:
• All Things Organic helps people stay fit & healthy with its chemical free, organic farm products.
• Being Human Clothing promises that every single garment helps save a life either through education or healthcare.
• The Nature’s Co. strictly adheres to all natural, 100% vegan ingredients that are not tested on animals and uses only recyclable packaging.
The opportunities for brands across categories are many. Can a newspaper brand benefit by standing for being environmentally friendly by using only 100% recycled paper? Can a financial services brand gain trust by using a part of its profits to fund poor communities in setting up new businesses? Can an automobile brand emotionally appeal to consumers by providing training programs for drivers?
On this thoughtful note, here’s wishing you, your families and your brands’ health and prosperity this festive season!