A new purpose: What brands must do to connect with consumers

Why it matters

The world is entering a new transformation economy, and brands need to identify and align themselves with a purpose, because only by taking a stand on the issues that consumers care about can brands win them over.

Takeaways

• Brands that take a stand on issues their consumers believe in are more successful than brands focused on chasing sales.
• As purpose-led buying takes centre stage, authenticity and humanisation have to be the topmost focus for brands.
• Brands have to establish their values and state them clearly as these define the function and processes within an organisation.

The global health pandemic has disrupted consumers’ relationship with brands. Faced with lockdowns and restrictions on the movement of people and goods in many parts of the world, marketers are asking whether COVID-19 signifies the end of the experience era.

The health crisis has given people “more time to reflect on mental health and their emotional well-being”, noted Dan Ramirez, head of business excellence (AVP), Insular Life. Speaking at the virtual NGCX Summit Asia, he said this posed new challenges for brands – more than ever, “brands need to look deeper into what’s important to consumers and innovate to succeed”.

Repurposing brands

As the world enters a new transformation economy, what’s changing for brands? Why do brands need to identify and align themselves with a purpose?

There are three key reasons why it’s critical for brands to connect with the consumers at a deeper level:

• Brands have to move in to satisfy consumers’ higher needs as self-actualisation is now in focus, as advocated by American psychologist Abraham Maslow years ago.
• The upcoming alpha generation of consumers is the key to brands’ survival. Of the six generations of consumers so far, alpha buyers attach the highest value in putting their money in brands that have a purpose.
• Consumers today are woke. They want to participate in social change. They have found a new voice of dissent with social media platforms helping them amplify their voice.

Taking a stand is good for business

Brands which take a stand on issues that their consumers believe in are going to grow more successfully than the brands focused on chasing sales.

Companies with high levels of purpose outperform the market by 5-7% per year. Increasingly, leaders too are recognising the benefits of purpose-led organisations growing their businesses profitably and sustainably, emphasised Ramirez.

He cited how Blackrock’s Larry Fink highlights that finding “purpose” is critical to brands’ survival. For years, the CEO of the US multinational investment management corporation has been writing to the leaders of big corporations, reminding them that purpose and profit are intrinsically linked.

“Purpose is not the sole pursuit of profits but the animating force for achieving them… Profits are in no way inconsistent with purpose – in fact, profits and purpose are inextricably linked,” wrote Fink in his letter to powerful global CEOs in 2019.

Netting alpha consumers

To grow and stay relevant, brands have to turn their focus on Generation Alpha, which is the demographic cohort succeeding Generation Z consumers.

“Brands cannot risk missing out on alpha buyers who believe in putting their money into purpose-led brands,” claimed Ramirez.

An estimated US$5 trillion of revenue potential is at play globally with purpose influencing many consumers’ decisions to pick, continue or switch a brand, according to Accenture Strategy’s 2018 report, titled, “From me to we: The rise of the purpose-led brand”.

Tuning into consumers’ aspirations

For brands, taking a stand is not a luxury but a necessity.

Ramirez cited the 2018 Accenture Strategy Global Consumer Pulse Research to establish that brands need to identify their purpose by gaining a deeper understanding of consumer desires.

The key research findings show:

• 63% of global consumers prefer purchasing products and services from companies that stand for a purpose reflecting their values and beliefs.
• 62% want companies to take a stand on the social, cultural, environmental and political issues that they care about the most.
• 65% base their purchase decisions on the words, values and actions of company leaders.

With purpose-led buying taking centre stage, authenticity and humanisation have to be the topmost focus for brands.

“When people don't like what they see and what they read, they rally. When governments fail to stand up to the expectations of the consumers, their expectations are redirected to the companies. Consumers today are woke, they want to participate in the social change,” asserted Ramirez.

But gaps remain

In the age of social media, where messages are amplified, brands have no choice but to take a stand on the issues that are close to the consumer's heart.

Brands face a big challenge – they have to make sure they don’t miss the big issues. Brands have the responsibility to create purpose-led marketing campaigns.

Ramirez said: “But what brands also have to remember is that people don't want them to capitalise on a crisis. They have to be authentic and real.”

In their quest to stand for something purposeful and connect with consumers, many brands have ended up on the wrong side. Established and popular brands have often attracted consumer anger for failing to take a timely and convincing stand on critical issues.

Major brand goof-ups

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Beverage giant Pepsi found itself in the middle of a controversy with its 2019 video commercial “Live For Now Moments.” It faced backlash from consumers for trivialising black lives and cashing in on the #BlackLivesMatter demonstrations to sell its soft drink. Pepsi had to withdraw the campaign featuring American model Kendall Jenner.

Listerine’s 2019’s rainbow-coloured bottle
The mouth wash came under attack from the LGBT (lesbian, gay, bisexual and transgender) community with the launch of bottles spotting rainbow stripes as part of its Pride range. The Johnson & Johnson’s brand was slammed for identifying mouth wash with gay men. Listerine failed to convey the message of “healing” and “harmony” to the targeted group.

Blueprint for brands excelling with purpose

The lesson for other brands is that they need to tread cautiously when they take a stand on important social and political issues.

Ramirez lays down six-point agenda for brands to excel with purpose.

1. Establish values: To make a difference, brands have to establish their values and state them clearly. Values are the “how” that will determine a brand’s “why”. Values will further define how everything (function, processes, etc) within an organisation behaves.
2. The purpose should permeate the organisation: Leaders, employees, products and processes have to align with the purpose of the organisation. Achieving a truly purpose-driven culture requires leaders to be open to employee feedback.
3. Actions should resonate with consumers: Once the brand knows who its tribe (consumers) is, it’s time to consider what's important to them and make sure brand actions and communication resonate with the target audience.
4. Delivering value: Brands have to deep dive to know customers’ expectations and meet them. Delivering true value requires brands to go beyond the functional, economic and experiential value that a product or service promises. 
5. The purpose is tangible: Brands have to remember their connections are demonstrable. Brands can prove that they care by taking corporate social responsibility to the next level with ESG (Environmental, Social and Corporate Governance) investments. It matters how businesses tackle sustainability and diversity. Brands can collaborate with non-profits and show more credibility.
6. Make employees part of the conversation: CEOs should lead the way in upholding the brand values and show that they care about their people, customers and organizational culture.

Winning with purpose

To survive change and competition, brands have to innovate with purpose. Leaders and entrepreneurs will do well to follow famed Austrian management consultant and author Peter Drucker’s theory that they are not in the business to grow shareholder value, outwit others and grow revenue. Instead, they exist to provide value for customers, create value for the company and lead with sustainable growth.

The COVID-19 pandemic and the struggle that humanity is going through have demonstrated that the best way to do business in 2021 is to pay it forward.

About the author

Sangeeta Tanwar

Journalist