By Professor Paul Hopkinson, Head of Edinburgh Business School at Heriot-Watt University Dubai and Academic Lead for Heriot-Watt Online
How often have you ordered food for home delivery from a supplier that prides itself on its responsible and sustainably sourced ingredients only to find items supplied with plastic straws and cutlery? Similarly, there are many examples of companies that have been called out for making false or misleading claims about their sustainability credentials, including using dubious certifications that cannot be independently verified. These are just some of the common sins that businesses commit to harness opportunities as sustainability and purpose-driven marketing ascends corporate agendas. Realising the value of purpose-driven marketing requires businesses to move beyond relying on capricious and arbitrary claims and greenwashing. It requires concerted effort to surface and activate a deep-seated sense of purpose founded on genuine commitment to tackling pressing global challenges.
There is no doubt that customers’ demands and expectations have significantly changed over the past few years. According to Deloitte’s Global Marketing Trends report 2022, 57 per cent of consumers worldwide indicate they are more loyal to brands that address a commitment to protecting the environment and addressing issues like social inequality. This interest in buying from responsible brands has greatly taken off since 2020. The report also shows that purpose-driven brands grow three times as fast in market share compared with others. This is not only in relation to brands establishing a relationship with their customers, but their employees as well. With employees working remotely and often losing touch with their organisations, having a clear purpose statement gives consumers and employees a sense of contributing to a higher purpose – thus having a strong impact on loyalty.
With the perceived benefits of sustainable and purpose-driven marketing, most companies are falling into the trap of doing this solely for the benefit of short-term revenue and goals. With purpose-driven marketing becoming a trend that most brands push in their communications, customers are becoming increasingly sceptical about the intent of brands. Product inconsistencies when it comes to sustainable packaging, and unsupported claims, have made it difficult to establish trust with customers or employees. There is no harm in marketers pushing purpose-driven marketing to connect with their consumers, but rather than being tempted to jump on the bandwagon without taking the necessary measures, there are ways to slowly transition towards more sustainable ways without losing the trust of your customers.
Many brands underestimate the level of awareness that consumers have reached – especially in the past few years. For example, consumers are aware that sudden change is almost impossible. The way Lego chose to market its mission statement is a great example of transparency. The brand has declared that it aims to produce sustainable Lego bricks by 2030. This announcement was made in 2018, which means it is a long-term 12-year plan. In addition, it is very important for brands to tap into solutions that are relevant to the brand so their goals can resonate with customers and be measured and celebrated.
It is understandable that many brands face the problem of extra costs when transitioning to sustainable marketing. But the key is to frame it as part of a long-term plan and be honest with their customers about it. In addition, this can also be done by making customers be part of this solution. For example, many companies challenge the consumer to choose between the cheaper option and the sustainable ‘morally better’ one. This interactive exchange between brands and consumers can extend the sense of responsibility to them as well. However, sustainable marketing should be executed carefully so brands are not left at the risk of heavy scrutiny.
A very common trap that brands fall into is lack of consistency, whether it is brands having inconsistent packaging or claiming that a brand is eco-friendly when not all aspects of it are. A great example of this was when McDonald’s announced that it replaced its plastic straws with paper ones. But later the company revealed that the straws should be put in general waste instead of paper waste as they are not easily recycled due to the thickness of the straws.
Finally, it is important for brands and companies to be accountable. For example, if a brand announces changing its packaging to lower its carbon footprint, it is important to be clear on how much of the product’s total footprint is sustainable. Essentially, what needs to change is framing purpose-driven and sustainable marketing as a buzzword or a hot topic. The only way to leverage sustainable marketing to the brand’s advantage is to treat it as a long-term plan and investment, rather that measuring its success on immediate revenue. Companies that are taking this transition experience a rise in their production costs. This might cause a short-term loss, but prioritising long-term benefits and revenue is the way to go.