Matt Stansberry, founder, CEO and partner at Nominee, a brand consultancy, talks about how your business should have purpose – and how that purpose can impact your bottom line.
What role do purpose-driven businesses have in today’s economy?
Gone are the days when brands could stamp an empty promise on a campaign or fool customers with greenwashing. Consumers want to align themselves with brands that consistently and authentically prove that they are driven by purpose. The brands that prove they care for the well-being of other people and our planet end up with more loyal, consistent, engaged consumer bases.
You can’t fake purpose. In the short term, it might seem like a smart move to loosely tie your brand to the latest social justice cause; but in the long run, dedicating your brand to an authentically driven purpose will always reign supreme.
As consumers continue to ask more of the brands they invest in, brands led by authentic, purpose-led leaders will succeed today, tomorrow and in the future.
Ok, but let’s back up: What does it mean for a business to have ‘purpose?’
Bill Theofilou, senior managing director for Accenture Strategy, said purpose was the reason why a company or a brand exists. It is the underlying essence that makes a brand relevant and necessary to its customers. Purpose sits firmly at the center of a brand’s vision and informs every business decision.
And 89 percent of consumers see a brand’s purpose defined by how they benefit the greater good, and they want to see that impact, according to a 2018 Cone/Porter Novelli Purpose Study.
Doing business for the greater good is not a trend. I believe it’s what businesses are here to do. I call it doing business on purpose.
Why is this an emerging trend in business right now?
In short: It’s good for business.
Nowadays, the term “purpose-led brand” is not as foreign of a concept as it was five years ago. The demand for businesses to have a strong sense of purpose is being driven by the customer.
Research from Porter Novelli found that 79 percent of people believe companies should work to address social justice issues, 78 percent of consumers would tell others to buy products from a purpose-driven company and 66 percent would switch from a product they typically buy to a new product from a purpose-driven company. What’s more, people are more likely to stick with purpose-driven brands, with 79 percent of Americans saying they would be more loyal to a brand driven by purpose than one that isn’t.
And why do you think we are seeing it emerge now?
A pandemic, immense racial tension and political turmoil have completely changed the way we view brands now. We are living in an era of radical transparency. Consumers – now more than ever – are conscious of a brand’s actions. They want all the contextual information they can get, diving deep into the history, motives and actions of the brands and companies they consume. When brands fail to adhere to ethical, inclusive or overall practices deemed by their target audiences as good, consumers take note.
And finally, how can a business go about defining its purpose?
The truth is that all businesses have a purpose. It might not be well defined, but it’s in there. In defining purpose, the best place to start is by asking the right questions. Start by asking, “Why do we do what we do?” and every answer should lead to another “Why?” until the deepest, most human and most meaningful reason is reached.