As the impact of the pandemic took its toll on many businesses, we wanted to better understand what this meant in terms of how leaders will rethink (if at all) the way in which they position their organisations and how they operate as a whole too.
Over 500 CEOs, Managing Directors and Founders took part in our study and one of the biggest areas of focus for them as they look to the future is the drive to become a more purpose-led entity. But does having a clearly defined brand purpose actually make a difference to how a business in perceived and its bottom line?
What is brand purpose?
First, a reminder of what ‘brand’ purpose means. Brand purpose is best defined as the reason for your company to exist beyond making money. It’s not about your targets for growth and what you need to do to get there, it’s the core concept underpinning your product or service (see more on this here).
Our survey respondents told us that until the much-anticipated economic bounce back comes, businesses will struggle to prioritise brand purpose over profitability. But what if there was an alternative to this?
Writing in the Harvard Business Review, academics Claudine Gartenberg and George Serafeim point to research which shows purpose-driven companies “outperform the market by five per cent to seven per cent” each year. We believe that you don’t need to think about survival first, profitability second. Here me out on this.
By creating a clear brand purpose, you’ll become a stronger business – which also performs better financially – as a result. As Claire Phillips, Head of Social Purpose at ITV, puts it, “Often we talk about this split between profit or purpose, ethics or economics. It’s a false dichotomy.”
We believe that it’s possible to do good and do well. In fact, many of the world’s biggest brands have been acting on this knowledge for some time. Unilever for example, has created a list of ‘sustainable living brands’ – products that have been developed in line with a strong social or environmental purpose.
“You don’t need to think about survival first, profitability second”
In 2018, these brands – which include Dove, Knorr, Persil and Hellmann’s – grew 69 per cent faster than the rest of Unilever’s business, delivering 75 per cent of its overall growth. Our own research demonstrates that brand purpose can win customers.
A large majority, 61 per cent of those we surveyed, said that even with a global recession, they would choose a supplier with a clear social purpose, rather than a business lacking these credentials.[/et_pb_text][et_pb_image src=”https://www.clearlypr.co.uk/wp-content/uploads/2022/01/Would-you-choose-a-purpose.png” _builder_version=”4.6.5″ _module_preset=”default” title_text=”Would you choose a purpose” hover_enabled=”0″ sticky_enabled=”0″][/et_pb_image][et_pb_text _builder_version=”4.6.5″ _module_preset=”default” hover_enabled=”0″ sticky_enabled=”0″]
While many businesses will look to recoup profits lost from the immediate impact of Covid-19, the pandemic is here to stay in some shape or form indefinitely. A study by EY questioning almost 1,400 UK adults found that, for four in 10 of these, Covid-19 will ‘fundamentally change the way they shop’. This includes paying for more local products, trusted brands, and ethical products. Therefore, a long-term strategy taking this into account, is likely to pay dividends.
You can read more on how brand purpose benefits businesses by taking a quick read of our blog, Brand purpose: What is it and why does it matter? Here you will also find a link to download the whitepaper that details all the results from our study.[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]