Purpose Driven Purchases
When presented with the Nike swoosh, do you think about shoes or the “Just Do It” mantra? When a Coke advertisement plays, do you relate it to soda or happiness and friendship? Nike, Coke and brands as a whole are banking that it’s the latter that enter people’s mind. The why behind a company is increasingly more important than the what, as consumers are becoming far more than just individuals who buy things.
According to a recent study of more than 2,000 Americans, 64 percent of consumers said their purchasing consideration is driven by a company's ethical values and authenticity. Additionally, 42 percent of consumers reported that they stopped doing business with a company because of its words or actions around a social issue.1 A brand’s purpose is moving the needle more than its product’s benefits, and that is reflected in messaging, too.
Earlier this year, Budweiser released a four-minute commercial to honor Dwayne Wade’s retirement from the NBA. It had nothing to do with beer and everything to do with the impact the all-star basketball player has made off the court during his career. Budweiser branding can be seen subtly throughout, but the ad is largely evocative and emotional—focused on purpose over product—with a “bigger than basketball” message.
This all follows the trend that brands are racing to demonstrate they are not only a means-to-a-profit end, but a living entity with beliefs and values. It is this dynamic to which consumers are responding to, using the online community as a telling and vital space for brand commentary. Sixty-three percent of American consumers believe their words and actions—from posting comments on social media to participating in boycotts—can influence a brand’s reaction to an event or its stance on an issue of public concern.2 Consumers are purchasing with their values, making it all the more important for a brand to own theirs.
There is no question that defining a purpose can be a difficult proposition for a brand. And turning that into relatable, topical and effective messaging can pose an even greater challenge. That purpose, though, can help create a consumer connection that is greater than a pair of shoes, beverage or computer—it’s helping to grow a crop of brand advocates who believe in why a company exists. Consider this: Brands with a high sense of purpose have experienced a brand valuation increase of 175 percent over the past 12 years, which is more than double the median growth rate of 86 percent and the 70 percent growth rate for brands with a low sense of purpose.3
We believe that as the brand-consumer relationship continues to become a fundamental aspect of marketing, telling the story of a brand’s why will eclipse the what. The lesson here is to commit to something, anything, as no marketing or social buzz can overcome ambiguity.