Define your organization or brand by your purpose, and compete on the difference you will make in the world. Activate your purpose as the core of your brand marketing strategy to inspire a following of loyal customers and employees, to grow your brand and achieve results.
Quantitative research and business results have shown the power of purpose. Consumers are loyal and prepared to pay a price premium; purpose is effective in attracting and retaining employees; and, purpose-driven companies are generating above-average stock market returns and attracting investment.
“Social efforts have moved from nice-to-have to being a must-have.”
David Aaker, Branding expert and Professor Emeritus at the University of California, Berkeley's Haas School of Business.
Why Purpose Matters - For Consumers, Employees and Investors
For Consumers
In a 2021 survey of consumers across 30 countries:
- 64 percent of consumers prefer to buy from companies that have a purpose beyond profit.
- 53 percent say they will pay more for a brand that takes a stand on a social or environmental issue.
In a 2021 US-based survey:
- 66 percent of consumers said they would be willing to pay more for a product that is environmentally friendly.
Deloitte, the global consulting firm, called purpose the “new beacon for growth”. In a 2021 survey of 11,500 consumers across 19 countries, 57 percent claimed to be more loyal to brands that addressed social inequities.
Purpose Builds Brands and Grows Revenue
For Employees
According to a global survey by consulting firm Deloitte, purpose-driven companies have 40 percent higher levels of workforce retention than other organizations.
A 2019 survey in the US, UK, Germany and France by Glassdoor, found that mission and purpose were important drivers of employee recruitment and retention:
- 79 percent of respondents said that they would consider a company’s mission and purpose before applying for a job.
- 64 percent said that their company’s mission and purpose was one of the main reasons they chose to stay in their job.
- 71 percent said they would consider leaving their job if the mission and purpose got worse.
- It’s not just a millennial thing: in three of the four countries, the over 55-year-olds were more likely to say that mission and purpose were important than millennials.
Purpose Matters for Recruitment and Retention
For Investors
The idea that a company seeks to maximize value for all stakeholders and not just shareholders is gaining traction. BlackRock, a US-based multinational investment firm with over $10 trillion in assets under management has made it a core strategy.
"Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not “woke.” It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism.”
Larry Fink – Chairman and Chief Executive Officer of BlackRock
The S&P Sustainable Companies Index Outperforms The Market
The US-based companies index that focuses on environmental, social and governance (ESG) strategies outperforms the stock market. Since late 2020, the S&P ESG 500 index of sustainability oriented companies has beaten the general market performance of the S&P 500 by four points on average.
Investors Weigh Sustainability Benefits Vs. Financial Returns
According to 2021 research by Statista, when asked to choose between a higher rate of investment return or prioritization of ESG related benefits, 39 percent of investors said they would favor ESG benefits and accept a lower rate of financial return.
"Profits and Purpose are inextricably linked"
Larry Fink – Chairman and Chief Executive Officer of BlackRock