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Purpose-driven marketing, by Heriot-Watt’s Paul Hopkinson

Heriot-Watt’s Paul Hopkinson examines the benefits and pitfalls.

By Professor Paul Hopkinson, associate head of Edinburgh Business School at Heriot-Watt University Dubai and academic lead for Heriot-Watt Online.

In an era when customers are often saturated by competing marketing communications messages and product offerings via multiple channels and media vehicles, often simultaneously, it has never been more important for organisations to find effective ways to cut through the noise and find a clear basis for differentiation. In recent years, buoyed by the growing climate crisis and environmental concerns among millennial customers and job seekers, businesses have been urged to look inwards and re-discover their sense of purpose. 

Being purpose-driven isn’t just about navel-gazing, however, and several surveys point to concrete business benefits. A recent Cone/Porter Novelli survey indicated that 66 per cent of consumers would shift from a product they typically buy to a new one from a purpose-driven company. Furthermore, Zeno’s 2020 global study stated that consumers are four to six times more likely to purchase from and champion purpose-driven companies. However, the research also shows that while 94 per cent of global consumers say they value companies with a strong sense of purpose, and are willing to reciprocate through brand loyalty, only 37 per cent believe today’s companies are working on their promise on this front.

Accenture studies found 53 per cent of consumers who are dissatisfied with a brand’s words or actions on a socially relevant issue complain about it, with 47 per cent walking away and 17 per cent not coming back. In these times of digital-first and artificial-intelligence-driven targeted marketing, it is important to build a brand that resonates.

While organisations often mention their wider social purpose, many fail to make concrete efforts to implement their aspirations and at worst their efforts are dismissed as ‘green-washing’ or ‘white-washing’.

It sounds obvious, but purpose is not something to which organisations can and should pay lip service. The leaders of organisations need to be able to have an honest dialogue with their stakeholders about the positive and negative societal, environmental and economic impacts of their business operations, throughout their supply chain. If an organisation is to be perceived as authentic, believable and sincere in its purpose to contribute to tackling global challenges, then it is important that staff throughout the business buy into this vision and are empowered to enact it. If internal stakeholders cohesively reflect company values and purpose, the organisation is on the right path. Employees are the backbone of any company, big or small, and beginning with them is equally important. Strengthening the company’s purpose over time, revisiting the core DNA, and developing it inclusively with all internal stakeholders is key and can be done through internal surveys and reports. The findings can then be used to further bond people among the siloed parts of the business, define strategies for customer outreach, encourage and nurture a diverse culture, and define and refine the core purpose in the business world. Implementing a purpose-driven strategy is imperative.

An organisation’s purpose cannot be relegated to a CSR policy, department or function. All too often organisations’ CSR efforts play lip service to purpose by focusing on the need for compliance and the avoidance of harm rather than a fundamental desire to change society for the better or to stop being unsustainable. Purpose is an essential and scalable, fundamental part of the business. Strategic CSR efforts complement the foundational purpose that lies at the core of the organisational strategy. Defining a company’s purpose through CSR will derail the efforts one needs to have an impactful, purpose-driven outlook, whereas scaling CSR and corporate philanthropy to purpose will uplift a company’s outlook in society and amongst the target audience. Purpose becomes an enduring commitment, while CSR initiatives can be added or removed according to wider global needs such as sustainability, climate change, natural disasters, medical emergency relief and others.

From leading fashion brands shifting their production base to countries where labour is cheap and labour laws are more lax, to food and beverage industries being singled out for their treatment of delivery personnel, ‘cancel culture’ has risen to the fore. More so due to the now rapid propagation of information and news via social media. No company can get away with advocating policies or standards of behaviour that they themselves do not follow. Authenticity is therefore the order of the day. It is essential that firms are sincere in how they articulate their purpose and uphold it through their actions. There are many reasons – constitutional, moral, ideological – not to buy a brand based on the company’s actions. At best, this leads to brand avoidance or, at worst, damages the brand. So, it is important to not only stand for what you believe in but also have actions that showcase the purpose behind a company.

Millennials, as potential employees or customers, have long been held to exhibit a strong bias towards ethically sound and purpose-driven organisations. However, the next generation of consumers, Gen Z, is expected to be even more inclined to support ethical and transparent businesses. A report by Fuse Marketing found brands that support social causes or are socially responsible are favoured most by the newest target consumer segment entering the market. 85 per cent of Gen-Z consumers are likely to trust socially responsible brands. 84 per cent are likely to buy their products, and 82 per cent will recommend that brand to their friends and family. Marketing with a practical, purpose-driven strategy is key in attracting this next generation of consumers and customers. A company’s work outside of manufacturing or services will be imperative in building brand loyalty, purchase and repurchase.

Cultural awareness, diversity and inclusivity, ethnicity and sustainability concerns are often interwoven and present challenges that must be addressed if companies are to survive and thrive in today’s marketing context. A company’s purpose statement should not merely be a pledge that appears on company websites or annual reports. It should be a statement of intent that is actionable, achievable and speaks to the positive future societal, economic and environmental impact that the organisation intends to make. Every employee and every stakeholder must be well aware to make a greater impact on marketing strategies and to achieve set organisational goals. Purpose should be placed at the centre of marketing, core to driving the organisation’s growth and future.