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How Function Is Driving Monetary Efficiency

How purpose affects financial performance

Marketers may fear that a social cause may discourage consumers, or at least divert resources that could directly attract buyers. But brands on a mission are usually rewarded, not punished, by their customers. Research of the 50 fastest growing brands in the world from 2001 to 2011 found a causal relationship between a brand's alignment with a higher purpose and its financial performance. Brand consultants Millward Brown and former Procter & Gamble marketing executive Jim Stengel developed this list, arguing that higher purpose helps brands build closer relationships with customers. They also found that investing in this idealistic company – the Stengel 50 – would have yielded 400 percent higher returns over the S&P 500 in the 2000s.

At Unilever, where I've spent much of my career, the most sustainable brands (brands that basically advocated a social mission) grew 46 percent faster than the rest of the business, generating 70 percent of their sales from 2017 to 2018, most of that growth took place in emerging economies where achievement of the Sustainable Development Goals is critical.

CEO Alan Jope argues: We are at the forefront of a new business model where real sense of purpose leads to better financial results and better profits. Actually there is no compromise. The more you do on purpose, the better your business performance will be.

Brands on a mission are a subset of the larger movement toward “shared value” – where companies create measurable business value by identifying and addressing social issues that intersect with their business. Introduced in 2011 by Michael Porter and Mark Kramer, it has helped create business to address fundamental global challenges. The idea is to do more than just simple philanthropy. Rather than writing a check (although there is sometimes value in writing a check), companies can address challenges that benefit society and their businesses. For example, a high tech company helps deliver high school computer coding lessons by mainly donating equipment and encouraging employees to volunteer. Children in the community benefit from improved training in 21st century skills as the company increases the supply of skilled workers for all companies (including their competitors). They share the value they create (often together).

The role of shared values

The concept of shared value focuses on the products and services that companies offer. With Brands on a Mission I extend this approach to the special dynamics of brands. Products and services are important, but in so many cases they are not enough – we also need marketing know-how and resources. And not just to create better products, but to use advertising and advertising to encourage new habits. Marketers are also good at creating educational programs to get the messages deeper and more practical than advertising can do.

Marketers have a particular challenge with common value. Some brands recognize the benefits of differentiation and send out their social purpose before doing a lot of real good. Your marketers use social causes to build the brand's reputation rather than taking on the purpose itself. It's hard enough to make a real difference with social problems. To be successful, it must come from an authentic, company-wide commitment to the purpose. Otherwise, the mission is just window dressing, or what we call "purpose washing" – similar to green washing, where purpose-related activities are primarily for promotional purposes. In the end we have what Anand Giridhardas describes in Winners Take All: "A social cause that only promotes the charade of elites who disrupt the old order without giving much back".

Purpose-washing brands benefit from one of the benefits of social purpose, differentiation, but only for a short time. They lose positioning for future markets and can even make employees feel worse when they work for them. And they lose the trust of consumers who find out.

Michael Porter points out that: Many consumer products rank low in terms of usefulness and social impact. However, this is changing with the development of innovative products that address major societal challenges, such as micronutrient fortified foods that improve health outcomes. It is important that targeted positioning and marketing bring real social benefit. Today's consumers are looking for real social impact, not just hype and window dressing.

For a social cause to be real, brands shouldn't try to mimic charities. Marketers need to be transparent about their business model as it both generates profit and addresses a social issue. It is okay for them to take a moral position, but the only way to maintain it is by developing a successful business.

At the same time, marketers must respect what governments and NGOs have already achieved in the social field – and acknowledge all sides of the story of reducing poverty, disease or other social ills. If marketers want to break new ground to address social justice, they don't have to start from scratch. For me, driving a social mission has meant making a difference in society through a brand that is aligned with the needs and aspirations of society. The main challenge is to bring both together: a for-profit brand and real suffering in the world. How do we translate our ideals into a sustainable part of our business? How do we develop business models that have real social impact? Purpose-driven marketing is the art and science of adding value to the promotion of a product to address a major social challenge – while staying in touch with consumers and staying relevant to the brand's core promise.

Contribution to Branding Strategy Insider by: Myriam Sidibe with permission from Routledge. Extracting and Adapting Brands on a Mission, How to Achieve Social Impact and Business Growth through Purpose.

The Blake Project can help you define and develop your branding purpose and create a social movement.

Brand Strategy Insider is a service from The Blake Project: A strategic brand consultancy specializing in brand research, brand strategy, brand growth and branding

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