Having a clear social or human ‘purpose’ is becoming an increasingly vital component for brands looking to differentiate from their competitors (and more frequently becoming the reason customers choose brands), yet very few businesses find their purpose easy to display.
A new study from Radley Yeldar (RY), called the Fit for Purpose Index, has shed light on the issue by ranking corporate brands based on the stated strength and impact of their purpose.
It found that while 75% of companies describe their higher purpose in terms of social or human benefit, only 11% convincingly demonstrate how their purpose is put into practice.
The study was driven by the changing expectation for brands to create more than just financial value, and the increasing expectations that corporations must act with more “integrity and transparency”.
The index shows that 36% of businesses make major claims about fulfilling their purpose in customer communications, without convincingly backing it up with tangible actions or commitments. It also highlights that businesses in the healthcare and technology sectors often struggle most to align their purpose with measurable targets.
“Purpose has taken on a new significance in a world where brand, sustainability, digital and engagement with employees and customers all overlap,” says Ben Richards, consulting director at Radley Yeldar.
“A purpose statement might once have been manufactured in a corner of an organisation and used on the cover of the corporate brochure: this is no longer good enough. For purpose to be effective it must be an authentic part of every interaction and businesses are well placed to be a genuine force for change, something we’ve seen consumers respond to and support.”
Other key findings from the report included that:
· 38% of the sample aligned their sustainability strategy with their purpose
· 17% showed how purpose is intrinsic to the business strategy and value generation
· 11% placed purpose at the heart of their business model
· Just 6% have redefined their governance structure to support the delivery of purpose and only 9% have integrated purpose to employees’ everyday work
Customer experience expert and author, Shaun Smith recently highlighted the importance of brand purpose as a differentiator for improving CX, in an article on MyCustomer.com, stating that businesses needed to be far braver in putting its purpose into action:
“A different breed of organisation is emerging in this world. They succeed because they have the courage, confidence or just sheer chutzpah to pursue a purpose that is beyond profit. They see their customers and employees as members of a like-minded community.
“They recognise that brands can only succeed longer-term if they create value for the community at large, not just the shareholders. Even some banks are included in this socially minded vanguard. Organisations like First Direct, Umpqua and Metro Bank are customer focused, rather than shareholder focused, and…are attracting new customers as a result. That is not to say these brands aren’t commercially minded – they are, but they manage to make us feel that we come first.”
Smith’s prognosis was that brands would need to fulfil three criteria on the road to becoming more ‘purposeful’:
Purposeful brands have a clear sense of who they are and WHY they exist. They stand for something beyond making a profit.
They are different to competitors in some meaningful way that creates value for customers. They are intentional in delivering their purpose via their customer experience across multiple channels.
They create cultures that sustain them and continually innovate to stay ahead.
Fulfilling brand purpose is also seen as a crucial aspect of improving employee engagement in an organisation, which in turn is seen as being central to being recognised as a customer-centric business.
About Chris Ward
Chris is Editor of MyCustomer. He is a practiced editor, having worked as a copywriter for creative agency, Stranger Collective from 2009 to 2011 and subsequently as a journalist covering technology, marketing and customer service from 2011-2014 as editor of Business Cloud News. He joined MyCustomer in 2014.