From Extinction Rebellion to #MeToo, we’re living at a time of polarising issues, which has given rise to a wave of activism across the world.
In the post-2008 world, financial brands that are authentically purpose-driven inspire greater confidence and consumer trust. These companies now see instigating change for the collective good as a top priority – and in this cultural landscape, brand purpose has skyrocketed to become one of the hottest topics in the industry.
It isn't just a C-suite priority of course. Consumers are leading the charge for positive change and are increasingly seeking to forge relationships with brands and organisations that show corporate responsibility. In fact, 62% of global consumers want companies to take a stand on current issues, such as sustainability, transparency and fair employment practices.
The days where consumers were only looking for the best price are gone. Contemporary consumers want brands to reflect their beliefs and values if they’re to become brand advocates. A recent eMarketer report revealed that 60% of US consumers want brands to take a stance on controversial matters. Millennials are even more fierce supporters of companies embracing societal issues, making far more conscious purchasing decisions than previous generations.
So how can brands discover their purpose?
To begin with, purpose should never be solely a communications strategy. Manufacturing it will not return the desired results. Purpose must underpin the organisation's reason for existing and be the root of its mission and vision – to inform business decisions and also how the entire organisation operates. In other words, it must answer the all-important question: Why does an organisation exist? Answering the “why” question is imperative for a company that seeks to give back to the world.
In order to be effective, purpose needs to be an authentic and realistic embodiment of what the organisation is, what it does and what it stands for. More importantly, it cannot be a C-suite only drive; purpose must define the entire organisation. This means being embraced by all personnel and act as a framework for all to conduct business within.
Purpose-driven organisations are never reactive. Chasing cultural trends can put you in a dangerous position, as illustrated by Pepsi's now infamous ad campaign back in 2017, which sparked widespread ridicule. Inaction may be alienating to consumers in the short term, but inauthentic adoption of purpose can be far more damaging to an organisation. Purpose must be a long-term investment. Latching onto a particular subject that happens to be in the public discourse of the moment that is alien or only marginally adjacent to a brand's core truth will not differentiate the business.
A long-term commitment
Relevancy is of course important, but unless organisations are compelled to make a long-term commitment to a particular cause, entering multiple different fields is meaningless. Purpose should be external and broad. When organisations embrace different trends to augment their purpose, these need to directly correspond and expand their core messaging, instead of being a segue into all sorts of different areas. This will allow organisations to build a history for a particular purpose.
Investment management company Vanguard, for example, was built on the idea that the “shareholder comes first.” This purpose is reflected in the company's offering: investors own the company themselves, rather than private parties or outside investors. This lends authenticity to the purpose statement on their website: “To take a stand for all investors, to treat them fairly, and to give them the best chance for investment success.”
Financial services company Robinhood describes its mission “to democratize access to the American financial system.” The micro-investing turned digital banking platform allows users to sign up for free – and there is no minimum cost to invest, already differentiating itself from established firms which generally ask for a minimum primary deposit. The company makes good on its promise to bring the middle-class into the fold, providing easy-to-use graphics to illustrate stock listings and financial news in their app.
From Santander to Nationwide, almost all major banks have switched from functional to emotional marketing to showcase their heritage and their efforts to improve the lives of consumers. New entrants to the sector are much more aggressively highlighting their contribution by creating products and services that allow consumers to combine financial goals with ethics. From Betterment to Wealthsimple, the market has seen a number of new organisations enter the field by supporting everything from affordable housing to gender diversity.
Building a community
No matter the industry, consumers are flocking to brands they perceive as having a positive impact in the world. Where the financial industry is concerned, consumers are seeking brands that make a commitment to making a positive impact.
The values you stand for must remain consistent to ensure impact. What needs to change is how they are communicated.
In a world where company purpose is more important than ever before, having brand clarity and embracing your purpose is only the first step. Staying on message is the hard part. Consumers, whether looking to purchase from ethical brands that stand up for cultural, societal and environment issues they believe in, or looking to connect with others and become a part of a community, can act as champions for brands that do this well.
Purpose has become a priority for C-suites, precisely because it has been proven to lead to long-lasting relationships with consumers.
Originally published on the CEO Today website.