For some time, there has been something of a narrative that suggests brands with a highly refined purpose — that is relevant to a given audience — will reflect positively on brand preference, and in turn, increase sales.
For starters, finding examples of brands with an authentic purpose is in itself challenging. On the largest part, what is typically offered to us as ‘brand purpose’ by many large corporations are at best platitudes, and at worst, a load of bollocks that fail to reflect the way in which the company in question conducts itself. Mark Ritson has spoken of this point numerous times, and has highlighted the common disparity between brand purpose, and actual business conduct. Just two of the many examples provided by Mark are as follows:
Starbucks: “to inspire and nurture the human spirit one community at a time”
Yet paid no tax of any kind in Australia for a decade, paid a tiny fraction in the UK.
Google: “To organise the worlds information and make it universally accessible”
Yet Google will not reveal its actual full revenues in Australia.
As Prof Ritson knows far more about marketing than I do, and is also a far, far better writer than I am, I will end this line of critic here and move on in order to avoid a very disappointing duplication of his work.
Part of the trouble with this conversation seems to be the ease at which conflicting “data” that can be amassed and used to “refute” (I use this term lightly) what is more commonly observed in the real world. Every now and then, a report arises that states something to the tone of “X number of consumers said they would buy a brand that represents Y.”- giving credence to the idea that brands do in fact need to stand for something. I am not for a second suggesting that respondents to such questions are lying — it is just that what consumers say in response to surveys isn’t always a true reflection of how they typically behave.
In April last year Richard Shotton published a top-line overview of a piece research he had undertaken examining the statistics that are regularly regurgitated to support brand purpose — those from Jim Stengel’s Grow. The basic premise of grow being that that companies with an ideal at their heart see share price growth far in excess of those lacking such values.
A link to the review is provided below, but in summary, Richard’s research highlighted several flaws in the methodology of the original study, which in tern, called into question many of the proposed ‘findings’.
Truthiness in marketing: is the evidence behind brand purpose flawed?
Stephen Colbert, the American comedian, coined the word 'truthiness' to refer to arguments not based on fact but what…
Where purpose might be useful
Personally, I agree with the sentiment of brand purpose, but caveat this by saying I agree in a strictly organisational sense — when a brand purpose is used as a guiding philosophy for a business, and not as something that is intended to be communicated to its customers in literal terms.
In Obliquity, The economist Jon Kay provides numerous examples of business that have managed to achieved a set goal obliquely — by approaching the problem indirectly — in contrast to the more explicit ‘maximise shareholder value’ approach.
His book is excellent, and I am probably doing it a major disservice by simplifying it so much, but the general principle is that by approaching problems indirectly, it allows business to distill a high level objective (brand purpose/mission/vision, for the sake of this discussion) into a series of intermittent goals (which they can, to some degree, influence) and specific tasks (that are achievable). In this respect, I see the value of brand purpose in its ability to help a business focus on common high level objective. As a very basic example –
1. High level objective: make high quality, nutritious food accessible to all children across Sweden.
2. Intermittent goal: increase distribution to outlets that reach young people.
3. Specific task: source potential retail partners.
In this respect, perhaps having a ‘purpose/mission’ at the heart of a corporate strategy is not necessarily a bad thing. However, having a purpose itself isn’t enough to guarantee success, despite how refined/ambitious it might be. The means by which this is purpose/vision is achieved takes far, far more work.
Where I do edge on the side of caution is when brand purpose is intended to be communicated (and understood) by a consumer. The ‘golden circles’, and idea popularized by Simon Sinek, famously suggested that “people don’t buy what you do, they buy why you do it.” A statement that makes the assumption that consumers purchase a given brand because of their their stated purpose. Suffice to say, this is very easy to infer post hoc.
For example, if the purpose of my brand was to make high quality, nutritious food accessible to all children across Sweden, it would be wrong to assume that my customers primarily buy my brand because I make high quality, nutritious food accessible to all children across Sweden — by doing so I am just assuming causation. They could in fact buy my brand because it is an easily available, high quality product, offered at a competitive price — and that in itself is okay.
I don’t personally believe that hundreds millions of consumers purchased a Windows based computer because it was once Bill Gate’s aspiration to have a “computer on every desk and in every home”. However, one can see how such a statement could be useful in guiding the business strategy - it outlines a high level objective that can be broken down into intermittent goals and specific tasks.
Lastly, I think there is a distinction to be made between what I would call a ‘top-down’ vs ‘bottom-up’ approach to brand purpose. The former is a overarching philosophy that originates in the c-suite, and is used to guide a companies corporate strategy. In contrast, a ‘bottom-up’ purpose is one that is retrofitted to an existing business as a method for increasing revenues. Brands that have recently taken social and political stances are a demonstration of this — an upcoming blog post will discuss this idea in a little more detail.
To conclude (for now)
Purpose, if you put it in your corporate strategy and ahead of profit, is perhaps not a bad thing as it can help a business focus on a common, high level objective
If you introduce a purpose because it’s supposedly good for profit, it is perhaps best approached with a degree of skepticism.
If you have a purpose because it’s supposedly good for profit, but don’t pay your taxes or live up to the purpose, then don’t be surprised if you are called out on it.