Purpose Premium
Purpose-driven companies make more money, have more engaged employees, more loyal customers, and are better at innovation and transformational change. - Harvard Business Review
Does brand purpose drive value? The simple answer is yes!
At Inward, we have been promoting the concept of Brand Purpose for over three years and have seen the benefits in just about every client engagement. It improves customer experiences, loyalty, employee productivity, and ROI.
There are numerous studies such as the Porter Novelli Purpose Premium Index, and Cone Purpose Collaborative on the B2B Purpose Paradox that report basically the same findings.
The bottom-line impact is real. Over the past 10 years, brands with meaning have outperformed the stock market by up to 206%. Purpose can increase shareholder value by $1 billion, according to a 15 year study by the S&P 500. Moreover, 83% of the companies that overperform on revenue growth, link everything they do to purpose.
I recently read an interesting report that explored the concept of “Purposed Premium“. In this report, commissioned by Monitor Deloitte, the authors identified six drivers of corporate value creation, where companies integrate purpose into their core business strategy. The six drivers were
- brand and reputation
- sales and innovation
- capital access
- operation efficiencies
- talents
- risk mitigation.
Purpose-related efforts, the report suggests, can guide strategic choices, and allocate resources accordingly to create value creation and measure the business value both qualitatively and quantitatively. What does this mean?
An integrated purpose strategy, focused on the differentiated role a company serves in society, can provide organizations with a Purpose Premium, driving long-term value in creating competitive advantage.
What are the top three things companies can do to promote a purpose-driven culture and create a Purpose Premium and value for the company?
First, get your senior leadership team to sit down, collaborate, articulate, and clarify what your brand purpose is. We suggest bringing in an outside agency like Inward to help facilitate this discussion. This team has to reach down deep into its core and ask, “What matters in driving our business future? What is the emotional connection to our employees, customers, and stakeholders?”.
Your brand purpose answers the question, “Why do you exist?”. For Dove soap company, it means bringing out the inner beauty of its customers. For Subaru it means “everything that they do from design, engineering to manufacturing starts with love and safety”. For Caterpillar, it is “to place 50 million people on the path to prosperity by making an investment in basic human needs, education and the environment”.
It shouldn’t be complicated or complex but rather simple. My friend Paul Higham, a former CMO at Walmart, used to promote the idea to his employees: “Hard, Simple, Easy” - you need to work “hard” to take the complexity out of the business so that the business becomes “simple” to understand. When it’s simple it becomes “easy” to communicate and implement into everyday activities.
Second, after your brand purpose is articulated it needs to be incorporated in every corporate role and activity across the enterprise. It must affect product design, product development, manufacturing efficiencies, talent recruitment, sales and distribution, public relations, and advertising. It must be disseminated and understood by every single employee so that they feel comfortable becoming brand champions and advocates. Purpose must be the driver behind individual performance appraisals and feedback as well as business drivers of performance. It is not a slogan that sits on posters and walls.
I have always been impressed with Subaru and their “Love Promise” - More than a car company. The Subaru Love Promise is their vision to show love and respect to all people at every interaction with Subaru. Together with their retailers, they have dedicated themselves to making the world a better place. This is more than just a statement of who they are and what they stand for, it has been incorporated into every facet of their business (https://www.subaru.com/love-promise.html). They have translated this purpose into running their business operations and marketing. In addition, they have also extended it to community outreach regarding the environment, healthy living, social justice, learning and education, and keeping pets and animals safe and healthy. It have become their culture and how they operate every day.
Third, the brand purposes should be supported by an internal integrated change management communications program. This includes social media, on boarding/training programs, incentive recognition and rewards, as well as external communications through community outreach, digital branding, public relations and advertising. It should not be an item on a checklist that gets produced and forgotten. It must be a sustainable long-term initiative that evolves over time and receives maximum internal exposure.
One of my personal pet peeves is that CMO’s and HR Leaders allocate fewer resources and less money to internal brand communications programs than external programs. They fail to realize that before your customers can experience the brand, their own employees must understand and exhibit customer facing behavior and experiences. This is especially the case in the retail environment.
Walmart understands this principle extremely well. Inward is privileged to have been one of their employee communication agency partners for several years to help employees understand the impact of “Save Money Live Better”. We translated this into an internal behavioral rallying cry of “Every Day Low Prices Starts with Me”, and an internal integrated communications program using our Inward Dialogue Marketing Framework so that customers can save money and live better every day. (I’d be happy to share examples of that case history if you would like).
SUMMARY: Clarify your brand purpose. Articulate it in every business role and operation. Create a change management communications plan and system to track brand implementation. Then watch your business prosper.
Allan Steinmetz CEO