Editor's Note: The following is a guest post from Mike Leiser, chief strategy officer and senior partner at Prophet.
When brand executives come to us with what they think is a positioning problem these days, we typically have an entirely different diagnosis. Usually, it's a purpose problem.
Positioning around a functional or emotional benefit isn't enough anymore, with purpose instead emerging as the heartbeat of modern brands and as a key ingredient in what makes a brand become — and stay — relevant. Brands with purpose stand for something beyond their product or service, and consumers know it. These are brands that can always answer two questions: What do we believe? And why do we exist?
Purpose has become one of the best ways to inspire people, both internally and externally. And it's essential to creating shared value. Brands with purpose don't just transact with people; they deliver something more, an intangible element that becomes part of an ongoing relationship.
By the numbers
Industry research backs this assertion up, including a recent study that found that brands with a strong sense of purpose grow at rate 2x that of those that don't. Our own Prophet Brand Relevance Index shows time and time again that components connected to how consumers interpret brand purpose propel "meaningful" brands to the top, led by the likes of Amazon, Netflix and Apple. Brands like Pinterest are beloved, while others lacking a strategic purpose may be used but lack relevance. Facebook, for instance, doesn't even crack the top 100 in our latest ranking.
Consumers can name many coffee brands, but they know Starbucks. When they lace up their sneakers or use Nike+ to track their morning run, they believe Nike is hoping to inspire the athlete inside them.
This sense of purpose isn't just about winning with customers. It's the No. 1 reason millennials choose to work for a given employer, studies have found — sometimes even trumping salary. It is then through a clear purpose that companies can attract and retain exceptional talent. It's also essential to appeal to potential partners and is the foundation for creating a meaningful experience.
Of course, this is not to say that purpose is the only thing that builds relevance, or that it immediately translates to higher sales. Brands must do many things right to succeed. But it's increasingly clear that the brands that fare the best and are the most differentiated from their competition are those with a crystallized strategic purpose.
How to find true purpose
It's important to point out that brand purpose can, and often should, be different than a corporate mission. Unilever, for example, has staked its claim in sustainability and supported that through its portfolio of brands. But Axe's purpose is to help guys look, feel and smell their best, while Dove strives to turn beauty into a source of confidence, not anxiety.
Some brands are lucky enough to have been based on purpose from the very beginning. Parents can buy many types of toys, but their favorites are likely Fisher-Price, because they share the belief that play is learning, or LEGO, which sees all children as the builders of tomorrow. Others, such as Ford, GE and Bank of America, have reshaped their purpose to hold more meaning for today's audiences.
Centering your brand on a strategic purpose isn't easy, but the intersection of a few lenses can put you well on your way to achieving this goal:
- Societal impact — where does the world need help and you can make a difference?
- Major capabilities — what are you good at beyond the products and services provided?
- Passion point — what is your organization most passionate about?
The first step when examining these issues is to ask the question that goes to the heart of a brand's sense of itself: What do we believe? It's the value closest to the center of an enterprise, one so fiercely held that it sets it apart from peers. Many companies believe in being good corporate citizens. Only State Farm believes in being a good neighbor.
Put in simpler terms, how does your brand see the world? What makes that viewpoint different?
Examining tough questions
The second question marketers need to answer is harder: Why does our brand exist?
This comes bundled with a few other points, such as what tensions do we want to do address? What experiences do our customers love or couldn't live without? What do our employees think we do best? A purpose is only valid if it's known, shared and prized by everyone within and around the enterprise — from potential employees to core customers to investors.
Answering this second question is a logical leap from the first. Bank of America, for example, believes in the power of meaningful connections. Its reason for existing is connecting individuals, families and businesses to make their financial lives better. GE's core belief is that with imagination, anything is possible. It exists to use that imagination to invent the next industrial era, one that will build, move, power and cure.
Answering this second question also delves into the ways your organization delivers on promises. A commitment to purpose, once crystallized and communicated to all parts of the organization, is what inspires a steadily evolving array of services and products.
Once the answers to those two questions have been synthesized and articulated into a clear and succinct brand purpose, that purpose needs to be infused in several ways throughout the organization. The smallest details matter, but so do high-level strategies. In 2014, CVS stunned many observers with its decision to stop selling tobacco products. It told customers it needed to do this to better deliver on its purpose of striving "to improve the quality of human life."
In hindsight, the retailer had to make that call in order for employees, customers and business partners to take its commitment seriously.
Finally, it's essential to continually validate your brand's purpose. While purpose reflects deep and enduring values that shouldn't change much over time, it's still essential to track the purpose of competitors. Without finding new ways to engage customers through living brand experiences, competitors can hijack your purpose and take customers with them. Is the purpose still clear and evident in every way? Are there new ways it can be conveyed more meaningfully?
By the same token, brands need to continually take the pulse of core consumers and stakeholders, monitoring shifts in the way they interpret purpose. Many concerns about sustainability, for example, have evolved to be as much about people as the planet, expanding the purpose to address issues of fair trade and human rights.
Great care must be paid to delivering on brand purpose. Ingredient scandals are destructive for all food brands, for example, but they're crippling for those positioned as especially healthy. And while Volkswagen has bounced back from #dieselgate, the damage was precisely because the fraud involved faked emissions results, negating its purpose of environmentally-sound engines. Consumers virtually always dislike bad corporate behavior, but they're especially fierce in punishing what they perceive as brand hypocrisy.
Is a strong purpose enough to make a brand soar? No. But combined with a commitment to creating living, evolving brand experiences and the recognition that brands must be powered from the inside out through culture, capabilities and engagement, it's an essential ingredient of relevance. And in today's fast-moving world, that's the currency that matters most.