Purpose is changing from a generic statement to specific areas like Social Purpose, as part of a company’s ESGs
ESGs – Envoromental. Social and Governance – are three areas that senior management are most concerned about. While the E and G is well serviced, it is the S that creates greater opportunity for businesses it turn doing good into good business. While consumers remain suspicious of greenwash, creating a positive social impact has a real value to shareholders, stakeholders and customers.
Of course, measuring that has been until now has been challenging.
Companies now seek three things:
Defining Social Purpose.
Delivering a positive Social Impact.
Measuring Social Values.
TAKING A STEP BACK TO THE CONSUMER VIEW
Simon Sinek says that consumers don’t care WHAT you make but WHY you make it, it’s all about your ethos and values (your purpose). But is that true?
The answer is not a simple yes or no.
Today consumers are asking about HOW you make it. And there is a long list of ‘hows’ to follow – how you are reducing your negative impact upon society and the environment, how you are sourcing materials, how you treat workers and local communities, how you treat animals and how you can make a positive difference in society.
Meanwhile, shareholders are asking CEOs not just how much they make but how they make it.
So the HOW is more important than the (sorry Simon, times change).
But do consumers really have time to interrogate all the brands they buy when the average person engages with over 250 brands. Of course not.
When M&S launched their ‘look behind the label’ campaign they found consumers didn’t want to do the work, they expected M&S to do it. So they created the Plan A strategy – focusing on their values and ethos. If the consumer trusts the brand it doesn’t need to ask the HOW?
It is more convenient to just buy from brands that you trust to do the right thing because they share your values. That is the ‘Why they do what they do’.
It’s easy for start-ups to be built on eco or societal values but most established companies have become manufacturing or retailing machines with the sole purpose of making money.
Does every brand need a purpose statement?
There’s been a lot of talk about purpose and how every brand has to have a purpose statement. I disagree, as does the consumer. Not every brand needs to be about purpose because many simply are not.
There is nothing wrong with being just in the business of doing business, as long as you aren’t doing bad business.
While I may care passionately about the values associated with my choice of tea, washing powder or meat, when It comes to nuts and bolts or staples, it’s not about ethics.
Fast fashion, for example, appeals to values that have little to do with ethics.
For many brands, there is no natural purpose so they have to adopt one (see The Tale of Two Glues at the end of this article). In many ways that can be effective as it allows a brand to invest in doing good. For example, if a glue company adopts the purpose of ‘Sticking communities together’ and invests in community projects then that adds values to the business, even if they were not there before, that can be better than a start-up claiming to be an eco-ethical company.
So a brand has 3 options;
• avoid purpose all together
• find a natural purpose
• adopt a purpose
The big mistake many businesses have made is falling into the trap of jumping on another jargon-based bandwagon. It creates a tunnel vision that prevents a more holistic approach and distracts them from doing what we should really be doing. No wonder so many created purpose-wash statements.
”I find that 95% of what is written about purpose is utter bullsh*t!”
Mark Ritson
Which begs the question how can purpose = performance? To do that, the ‘purpose’ has to be of value to the consumer.
So, what about the consumer?
In the rush to generate a purpose statement, the approach can be inward thinking. Too often CSR is dictating the message, which is fine for corporate PR, that is their lens, but CSR is not trained in thinking in a customer-centric way. This is why it is essential that marketing controls the messaging to consumers. That’s their lens.
And the key here is values alignment – seeking to align a brand’s values to those of the consumer. Note – not the other way around!
In seeking a purpose, many brands are self-defining the values they believe in (or want to be seen taking on) and then trying to sell them to consumers. But the fit doesn’t work and you end up with VALUES DISCONNECT. In short, you are failing to connect with consumers.
A good example is Net Zero – which has been described as “totally meaningless CSR eco-jargon” to consumers and, as most are 10 to 20 year targets, of no value what so ever. The concept is good, the deliver is greenwash.
In a recent poll we did on a variety of Net Zero claims, students condemned one supermarket’s claims as being ‘greenwash’ and ‘lacking real commitment to the climate crisis’. One citing 2040 as a target got the response – “We’ll all be extinct 5 years before that date.” Overall, it actually created a negative impact upon the brand and its green credentials.
Here the brand has failed to align its values with the consumers – VALUES DISCONNECT – and many brands suffer from it.
The key here is to find out what your customers really values about your business and what values they expect of you. And it all starts with insights.
A lot of research shows that when it comes to People vs Planet, people win. This is due to several factors – one is that many consumers feel that when it comes to the environment many brands have no choice but to do the right thing. Environment is more rational, but when it comes to people, that’s emotional. People relate to people.
Consumers also believe that brands give to charity because they get it all back in tax breaks, so don’t expect too many bonuses here.
What impresses consumers is when a brand does what they believe it doesn’t have to. Actions do speak louder than words.
Three types of conscientious consumers
I have divided consumers into 3 key types:
1. BRAND BELIEVERS want to know that your values and ethos, the WHY, align with theirs. (High brand trust = greater loyalty.) Example – M&S Plan A – you don’t have to focus on the HOW as you trust M&S to do good because you know WHY they do what they do.
2. BRAND INTERROGATORS want to know HOW you are reducing your negative impact upon society and the environment. (Seeking validation for choosing the brand.) Example – Sainsbury’s, who are very good at supplying consumers with relevant information.
3. BRAND BUYERS don’t care about the WHY or the HOW, just the WHAT – what does it cost, when can I get it? (Just into value not values.) Example – Boohoo, Primark (fast fashion), insurance.
This is not to say that a brand may be unethical or ethical, it’s a case of whether it’s relevant to their buying decision.
Of course, every consumer wants to know WHAT you sell, is it relevant, good value and does it solve a problem? So Sinek is wrong on that one.
But to be able to answer both the HOW and WHY gives your brand a competitive advantage.
The influence of community.
I have written a number of articles about the multiple buying persona – that any consumer can adopt different reasons and values when making a purchase.
Another key factor here is community. Almost all of us are influenced by our communities (and most people belong to at least 6). We rarely buy in isolation but within the context of how others will judge us.
71% of people say that community is a key factor in their lives (CONNECT2 Community Research).
A good example are eco-mums. Mums are influenced by the group ethos of buying products that reduce environmental impact. But a mum may also be influenced by another social group that seeks to support equality. The lesson here is to think beyond just the solus consumer and about the impact and influence of their social and community groups.
What, Why, Who, How?
In today’s climate, no one doubts now that doing good is good practice (check out my article on Power + Purpose) and that consumers are making decisions based on a brand’s ethical values (though not every consumer and not every purchase).
A recent YouGov survey claims that 52% of consumers are looking at the environmental credentials of brands they buy. They are also equally looking at the societal ones, and more so – people matter more.
A news story about exploiting people has far more damage than an environmental one – Boohoo shares halved after the Leicester sweat shop scandal. KPMG research says that 71% of consumers will never ever buy a brand that puts profit before people.
So here is a more pragmatic and consumer centric way of looking at it.
- WHAT do you make/do/sell?
What does the customer want? What is the relevance of your product/service to them? What is the benefit? For example:
– A solution to a problem?
– Convenience?
– Makes life better?
– An essential need like food, safety, shelter..? (See Maslow’s hierarchy of needs)
– Indulgence?
– Self image?
(Most of these are functional until you get into indulgence or self image when people buy brands to reinforce their social status.)
- WHY do you do what you do?
What drives you? What is your ethos, culture, your driving values? This is where ‘purpose’ sits.
- WHO are you talking to?
Who are your customers? How much do you know about them? Especially their needs and values. It’s essential to assume nothing and gain real insights. What values they align with may surprise you? It’s all about values alignment not values disconnect.
- HOW do you make/source materials and labour?
How ethical is your supply chain? How are you minimising your negative impact upon people and planet? This is not just key to consumers but retailers too. And it’s a tough one.
BrewDog, one of the most successful breweries of recent years, has been famous for PR gimmicks but now claims to be the only brewery that has a negative carbon footprint – good PR or great CSR? Either way it scored highly with consumers in a recent YouGov research.
Conclusions
So is Sinek right or wrong? Yes, we care about the WHY but he forgot the HOW? But he’s certainly right that it’s all about values.
So is purpose really what the consumer is seeking?
Yes, but a purpose statement is just words, actions speaker louder than words, and aligning a brand’s values with the consumer’s is the key to delivering performance.
And my final point, understanding consumers is the responsibility of marketing, not CSR.
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The Tale of Two Glues
Gloop Glue
Elgar Booth was a chemist. In 1897 he formulated a new glue, called it Gorgeous Glue and sold it to locals. Elgar never set out to make the world a better place but being a Quaker he looked after his staff, was against exploitation and used only natural materials.
In 1967, the family firm was bought by Zenca Chemicals.
Today it is a global giant making over 100 types of glues for both consumers and industry.
Along the way it lost its way and the focus became making a wide range of glues at a price that gave it a market advantage and deliver returns to shareholder, regardless of ethics.
The brand was renamed Gloop Glue in 1987.
But now it is trying to look more responsible, while still delivering to shareholders.
Lacking any natural purpose they have adopted one:
“We are all about sticking communities together.”
From that they have now devised a strategy and campaign to unite communities globally. Recently they launched an initiative to unite lost refugee children with their parents.
Through communities they can demonstrate their environmental and social values. Show how they are reducing their negative impacts. Last year they invested over $20m into communities.
They believe that their purpose also distracts consumers from asking how they make glue, while delivering real positive actions.
The Good Glue Company
The Good Glue Company was set up by Walter Watts, a businessman and father, who decided that most available glues were anything but ethically produced.
“I wanted a glue my kids can use that wasn’t a bi-product of a globally chemical company, that was trashing the environment and exploiting people”.
Watts adds, “We set up The Good Glue Co to supply only naturally made glue that uses organic, Fairtrade materials and has no negative impact upon the planet. We are carbon neutral and generate zero waste to landfill. We are also a B Corp company. 50% of our profits support local charities.”
Ironically, the formula he used was the very one Elgar Booth originally invented.
Within 4 years Good Glue had taken 18% of the domestic glue market and set up exclusive deals with many education authority for schools. It is widely distributed through many retailers and is endorsed by parent celebrities.
Good Glue has no mission or purpose statement.
“Everyone knows what our ethos and values are. Our glues don’t sick any better than others, but our values connect with consumers values and that is why we are growing rapidly. We have provided an ethical alternative to a simply functional product.”
So what is the difference between Gloop Glue and Good Glue? Who is doing more good? Which one would you buy?
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Chris Arnold is a Dr of Business and a specialist in ethical marketing.
A former director of Saatchi & Saatchi, he is the co-founder of Creative Orchestra (a specialist ethical brand and marketing agency), CONNECT2, Dyversity Lab and My Social Impact.
The author of Ethical Marketing and The New Consumer and the Brand Republic ethical marketing blog for almost 10 years.
A member of Marketing Kind, The Network One Sustainability Group and the Institute of Corporate Responsibility and Sustainability (ICRS).
A former board member of the Direct Marketing Association and former chair of the Agencies Council and the Creative Council.
Defining Social Purpose.
Improving Social Impact.
Measuring Social Values.
Contact Chris m: 07778 05 66 86 (no sales calls) or email: vichris@me.com
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Read POWER + PURPOSE. Who owns purpose? Originally published in Campaign, a look at the balance of power within organisations between marketing and CSR. Over 100 companies researched.
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