A topic of hot debate recently brought to the fore by Peter Field is ‘brand purpose’. Today’s consumers are more adept than ever at seeing through inauthentic claims – think “greenwashing” – and for those deemed performative, it can have an adverse effect on business, which begs the question, can brands truly succeed without brand purpose?
Given how subjective this discipline is within our industry, I want to start off by articulating what I mean by brand purpose. Is brand purpose simply a company’s why, so how it fulfils a consumer need, or does it delve further, into a company’s values including their actions to make the world a better place?
It’s the latter for me. It used to be enough for brands to simply fulfil a need, but with the heightened competition of challenger brands entering the market and the digital revolution enabling consumers to stand up for their values and amplify their voices at an unimaginable scale, brands now need something to differentiate themselves, and fulfil the new consumer need – that they care about something other than just their bottom line.
Brand purpose for brands
Having looked at this area extensively, Dove was a brand that set the benchmark for me. There is little difference between Dove and competitors on the supermarket shelf – they are priced similarly and serve the same purpose, but what makes a consumer pick up Dove over other brands is where their brand purpose really comes into its own. Their Campaign for Real Beauty was first conceived in 2004 during a 3-year strategic research effort after it was noticed that lack of representation in advertising has a real impact on women’s confidence and their participation in society. Since then Dove has seen sales jump +60% over a 10 year period, and they now enjoy a 7.6 and 10.2 percentage point lead on competitors in terms of current customers and purchase intent, respectively (YouGov Brand Index, 5th December 2021). Dove successfully engrained their brand purpose into the fibres of their business and are still reaping the rewards.
There are many brands out there who have taken purpose to be a core part of their proposition both internal facing as well as external. However, there are just as many who haven’t quite got it right. This is particularly prevalent in the fast fashion sector.
Boohoo saw a huge +45% increase in profits in May 2020 when the UK went into lockdown, however only a month later, after posting a black tile in solidarity with the Black Lives Matter movement and setting up a diversity and inclusion board, were found in the midst of allegations of breaching the Modern Slavery Act as one of their suppliers was accused of underpaying workers. They’ve also since been called out for plagiarising black-owned independent fashion businesses across their portfolio of brands (e.g., Pretty Little Thing, Nasty Gal, MissPap, Karen Millen, etc.). In light of this, ASOS and Next were quick to drop the brand from their own websites causing shares to drop by -46%.
But sales remained as stable as ever. Because Boohoo’s brand purpose in its simplest form works for young consumers. Cheap, on-trend fashions that can get here by tomorrow. And currently, this is enough for them. YouGov has shown that despite Boohoo’s reputation nosediving during July 2020, purchase intent remained relatively stable, and this impact did not last long with scores rising +7 points the following month. It’s current customers net score also remained in the positive, with scores actually increasing during July 2020.
Source: YouGov BrandIndex, Which of the following clothing stores and brands would you be PROUD to work for? Which would you be EMBARRASSED to work for? Net score
Source: YouGov BrandIndex, Have you purchased clothing from any of the following clothing stores and brands in the past 3 months? Net score
So, do they need to be doing more? In short, yes. There is a feel good factor when you buy from a brand that you feel is doing some good in the world, and consumers are already starting to close that gap between their values, and the actions they take – we’ve already seen a change with the rise in popularity and success of brands like Lucy & Yak (ethical, inclusive clothing brand), Triodos Bank (ethical, environmentally friendly banking), and TOMS (shoe company who invest in grassroots efforts).
Brand purpose for agencies?
We recognised the need to put purpose firmly into the centre of our agency proposition. At The Kite Factory we have been on quite a journey over the past 2 years. In April 2019, we rebranded from MC&C to reflect a broadening of our core competencies from traditional performance to effectiveness through the funnel for advertisers from diverse categories. And in August 2020, we repositioned ourselves to help communicate our brand values better.
Since investing into this area, we have seen a very positive impact on our own business. There are other forces at play here, but purpose was one of the core pillars that drove our business’ performance over the past two years. Since 2019, our chemistry-to-pitch invitation rate has improved by +58%. This is really the point where a brand decides how well an agency aligns with them from a people and values perspective, and just goes to show how important having a strong brand purpose is.
There has also been a real change in evaluation criteria. We now regularly see brand values and an alignment to values in the top 4 evaluation criteria which proves the shift away from hiring a media agency as a transactional action, to a deeper alignment and requirement for strong brand values that come through in all we do. Independent agencies often lose out when pricing is the top or only evaluation criteria as networks have huge deals in place that, although reduce levels of flexibility, do offer clients lower rates. However, the tides are turning in favour of strong brand values and it’s not simply enough to be the best in terms of pricing.
Not only have we seen success in terms of pitching metrics, but staff retention has improved too, by +30%, far exceeding the industry average. There are strong links between staff happiness and feelings of fulfilment and meaning in their work, and when staff are happy, they’re more likely to stick around.
So, it may not matter yet for all brands to have a strong brand purpose and values, but we’re seeing this become increasingly more important for agencies who want to have a deeper connection with their people and their clients.
Conclusion
We are moving fast into an era where it’s not enough for a brand or agency to simply fulfil a need. We need to be doing more. How much longer the value-action gap will last is yet to be seen, but it’s a good idea to start weaving your values and purpose into all you do so as not to be seen as performative when consumers truly start acting on their values.
By Verity Tennant, Client Account Manager