The Power of Purpose

In my recent Marketing article I talked about the Top 5 Marketing Trends to consider for 2022 and I have delved into topics one to four so far in the last four issues, so today the focus is all about Purpose as per topic five below. 

Jo Katsos, Marketing Director, STIHL Australia

1. Collect Accurate Customer Data
2. Keep it Simple
3. Embrace Personalisation
4. Elevate the hybrid experience
5. Purpose

Marketers are constantly evolving with the world around them, and more specifically, with their consumer audiences, and if the last 2.5 years have been anything to go by, we are responding to unprecedented events. For those brands who are well positioned however, they will be continuing to thrive. 

Consumers are increasingly more careful about which brands they buy from, seeking out brands which have values aligned with their own and whose purpose is much broader than pushing products out to the market. Purpose allows brands to cut through the noise and resonate with customers by making a holistic commitment to doing better for people and the planet. 

Many organizations are redefining why they exist beyond profit—pushing them to rethink everything from product delivery to employee and community engagement. How does marketing play a role in purpose?

Growth through Purpose

Some might ask, do consumers really make purchasing decisions based on what a brand stands for? A sceptic may think that while people care about these issues, more traditional purchasing criteria, such as price, still ultimately trump the purchase decision.

In a research study conducted by Deloitte as part of their 2022 Marketing trends assessment, their research of 11,500 global consumers found the purpose sceptics may have a point. When they asked people why they chose to purchase from a specific brand across eight different categories (automotive, travel, apparel and footwear, beauty and personal care, household equipment, furniture, electronics, and banking), price and quality were individually cited as top-three purchasing criteria anywhere between 61% and 86% of the time (that is, at least one of the two reasons appeared almost every time).

If we stopped here with this set of data, you could assume that while people state they care about issues beyond end-product delivery, they often vote differently with their wallets. But there’s more to the story.

Purchase decisions beyond Price and Quality

How are high-growth brands activating purpose more holistically? The study highlights that while high-growth and low-growth brands see purpose as a means to inspire product and service delivery at a similar rate (66% versus 71%, respectively), high-growth brands are 66% more likely to see purpose as a means to guiding employee decision-making, and 41% more likely to have purpose drive the corporate social responsibility investment strategy.

Traditionally, businesses are seen as entities that exist to provide a product or service. A growing number of consumers and entrepreneurs are embracing the idea that companies can be a lot more. Purpose-driven companies go beyond their role of offering a product or service and develop programs that have a social or environmental impact. Social entrepreneurship is bringing more meaning to what businesses do, and it’s an exciting trend to explore if one wants to make a difference in their career.

How do purpose-driven companies stand out?

Modern consumers know that the choices they make have an impact on their environment and community. The Deloitte research indicates that for 20% of them, how a company treats the environment is a top issue when choosing a brand, and 19% look at what a brand does to support the community.

Businesses are adapting to these new expectations by embracing social entrepreneurship. A purpose-driven model allows businesses to go beyond selling products and make a difference through their decisions and strategies, or through their support of social and environmental programs.

What are the advantages of adopting a purpose-driven model?

The reason businesses need a purpose is multi-fold. It benefits not only the business itself, but also the customers and employees:

  • For 79% of business leaders, purpose is central to success. It’s a key element for differentiation, and it ultimately allows the company to have a transformative effect in many respects both internally and externally, instead of only achieving linear growth.
  • Customers see and understand that their purchase makes a difference. They get more satisfaction from choosing a brand with meaning.
  • Believing and belonging are important for employee satisfaction. Thus, purpose-driven companies are good at creating a sense of community and attracting top talent.

Driving impact and making a difference by being purpose-driven

Purpose-driven businesses often approach hiring differently. Besides looking for those who possess the skills and expertise required to perform their job, they look for people who are passionate about making a difference. They foster the talents of impact experts, and the overall culture is shaped by social entrepreneurs helping each other grow. At STIHL there is an increasing focus on Sustainability strategies which impact in all areas of the business, and it has become apparent that there is a large contingent of employees who are driven by the initiatives relating to these areas and who would like to participate in bringing these new programs to fruition. We are seeing first-hand the impact of being Purpose driven which starts from within. 

Putting together a team of passionate individuals is only the beginning. Indeed, there are other strategies purpose-driven businesses use to have an environmental or social impact, including:

  • Using strong core values to inform business decisions.
  • Donating products or services to those in need.
  • Donating money to non-profit partners.
  • Leveraging talents and resources to support community projects.
  • Transforming an industry’s best practices.
  • Funding projects to find solutions for social and environmental issues.
  • Supporting employees so they can volunteer for a few hours every week.

Some facts about purpose-driven companies 

  • Research conducted by Unilever showed that 33% of consumers buy a product because they believe it is doing social or environmental good.
  • 77% of consumers are more willing to purchase from a company with a CSR (Corporate Social Responsibility) pledge — 73% of investors agreed.
  • 42% of consumers believe businesses make it harder for them to be sustainable. 
  • 88% of consumers would like businesses to help them be more environmentally friendly. 
  • According to one study, 9 in 10 business leaders said consumers would hold them accountable for the environmental impact they make through their business — an even greater ratio than shareholders, employees, or government regulators.
  • According to Nielsen, three out of four millennials are willing to pay more for sustainable offerings, and 72% of Generation Z is prepared to pay more as well.

Profit is often seen as the ultimate goal of a company. Triple bottom line companies are however rethinking this approach and combining profit, people, and the planet when assessing their impact or setting goals. In today’s tumultuous times of covid, climate change and social injustice, there is an opportunity to step up and be more than just profits and genuinely embed social and environmental strategies into the values and mission of your company. The evidence suggests that your employees and customers will reward you for it! 

Jo Katsos, Marketing Director, 
STIHL Australia