Does A Brand's Purpose Really Impact Sales?

In announcing its new Center for Brand Purpose (billed as a resource for guidance and education) the Association of National Advertisers noted that 82% of its senior marketing members said their company needed help identifying and “activating” their brand purpose. 

That's not good. Especially since ANA’s Bob Liodice says: “Research shows that purpose-led brands grow two to three times faster than their competitors. . . Purpose is not simply a nice thing to have — it’s imperative in this day and age.”

Milton Friedman famously argued: “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” 

This is not to suggest that the business of business is business (as Friedman is often misinterpreted), but it does mean that consumers want and expect product quality, safety and value, and that communitieswant good corporate citizens that hire locally, provide a living wage, not pollute and to pay its fair share of taxes and support the community.



Beyond that, do companies really need a “purpose," as suggested by the ANA?

A study from Porter Novelli/Cone reportedly found that three out of four customers expect companies to go beyond just making money and also work to positively impact society. About nine out of 10 say they would buy from a company they think is making a do-good effort, and eight out of ten consumers think they are helping do good when they buy from a purpose-driven company.

So technically it is not enough to stay in business by making products ethically that deliver on your brand promise, maximize shareholder value, and support the local economy with wages, taxes and the occasional donation to the parks department?

While I have praised companies that support intelligent TV on PBS, I am otherwise hard-pressed to think of a dollar I ever directed to a specific company because their marketing touted a larger "purpose" that I thought would make the world a better place. 

Filling potholes to sell pizza? Good for you. Still don't like your product and don't buy it. 

Ads festooned with pink ribbons in October? Good for you. Your CEO dumped a bucket of cold water on his head for ALS? Neat. For every dollar I spend with you, you'll donate a few pennies to literacy, or veterans or the homeless? That is your choice and I commend you. But don't think for a New York minute that made me pick your brand over another.

My purchase decisions are all about (and generally only about) quality, price, reliability and word of mouth. If I want a worthwhile cause to have money, I give it to them directly.  

Nike needed to become relevant again so took a massive chance with Kaepernick and it seems to have paid off — but, might I add, it has not prompted me to buy any of their shoes or apparel. 

Some "purposes" can backfire. A local car dealer showroom in Charleston has been something of a headquarters to collect for Toys for Tots for three decades. But when interviewed by its media-partner TV station, the dealer could not stop himself from adding, "And take a look at our cars,” when inviting the audience to bring in a toy. 

OK, so now your "purpose" is to lead-gen by luring in those who want to support Toys for Tots? Not a good look.

And that too is a challenge with binding your brand to a purpose: that the public perceives it to be genuine. Anyone believe for a moment that when Zuckerberg gave the Newark school system $100 million (shortlybefore “The Social Network” film portrayed the Zuck as a prick) that Facebook had any enduring interest in improving education? 

Hardly a week goes by that an athlete or celebrity hired to advance a "purpose" doesn't do or say something stupid that causes their corporate partners to renounce them and cancel their adverting on a particular show, or end their affiliation with the offender. Negative ROI.

This is in no way to suggest that brands should not help improve the world beyond the economic value they already deliver. But let's get real about the real impact it has on brand-buying decisions, which I suspect is minimal.

4 comments about "Does A Brand's Purpose Really Impact Sales?".
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  1. Ken Beaulieu from ANA, November 16, 2018 at 9:24 a.m.

    You're missing the point. Brand purpose is not a one-off campaign for charity, social corporate responsibility, or philanthropy -- it's a brand's reason to exist beyond selling things. Purpose guides every strategic business decision, from customer experience and product development to hiring and employee engagement. In effecting change for the greater good, purpose-led brands improve their customers' lives, attract high-quality talent, produce better, more powerful creative, etc. And in doing so, they drive customer trust, goodwill, and, yes, growth. Consider: A study by Kantar Consulting found that purpose-led brands have seen their brand valuation increase by 175 percent over past 12 years, compared to a median growth rate of 86 percent. As BlackRock CEO Larry Fink said, “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society."

  2. George Simpson from George H. Simpson Communications replied, November 16, 2018 at 9:33 a.m.

    Thank you Ken, but I don't think I am missing anything. There are those who hold that a singular focus on being the best you can be at your product or service trumps efforts to improve the world. Especially if the purpose in more about marketing and less about genuine conviction.

  3. George Simpson from George H. Simpson Communications, November 16, 2018 at 9:38 a.m.

    Sorry. more about marketing...

  4. Paula Lynn from Who Else Unlimited, November 16, 2018 at 11:54 a.m.

    In a nutshell "If I want a worthwhile cause to have money, I give it to them directly." Great examples about which you speak are the black tie "Charity Events". They are no so much for charity but to see and be seen at a $1000 or so per ticket which 80% goes to the cost of the event.

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