Study: Brands with a purpose grow 2x faster than others
Dive Brief:
- Brands with a high sense of purpose have experienced a brand valuation increase of 175% over the past 12 years, compared to the median growth rate of 86% and the 70% growth rate for brands with a low sense of purpose, according to Kantar Consulting’s new Purpose 2020 report “Inspiring Purpose-Led Growth” made available to Marketing Dive.
- Among marketing leaders, 76% think their organization has a defined purpose, but only one in 10 have a corporate purpose statement that’s backed by a meaningful activation plan. Two-thirds of marketing leaders believe that purpose delivers long-term growth, just one-third believe purpose is a company-wide movement.
- Nearly two-thirds of millennials and Gen Z express a preference for brands that have a point of view and stand for something, the report found.
Dive Insight:
Kantar’s study adds to a growing body of research and case studies that demonstrate how important it is for brand marketing to reflect a sense purpose beyond a purely commercial one in order to connect with today’s consumers and, at the same time, the difficulties inherent in implementing this approach.
As the findings underscore, purpose gives brands a long-term competitive advantage, with the brands that consumers see as having a positive impact growing at 2x the rate of other brands. The research also suggests that the traditional 80-20 model, where 80% of sales are thought to come from 20% of customers, is outdated. Instead, marketers should focus on three key areas to create purpose-led growth: articulation, infusion and amplification. Currently, brands tend to invest too heavily in articulation and not enough in the other two areas, which are essential in engaging with consumers and driving growth, according to the study.
Getting purpose right can be a struggle for marketers. Brands need to make sure that a cause or purpose makes sense for the them. Articulating purpose to drive business growth depends on a having a cause that is relevant, unique, meaningful and well measured, the Kantar research suggests. Marketers also need to take a 360-degree strategy approach to bringing purpose alive across a brand’s platforms, real-life activations and overall messaging.
Kantar’s research is in-line with other studies showing millennial and Gen Z’s growing expectations for brands to take a public stance on social and political issues. Gen Z tends to have a strong sense of purpose, feels connected to important causes, and 69% think brands should help them achieve their goals, according to PSFK research. About 60% of consumers think brands should post about their opinions on social media, according to a Sprout Social study. Thirty-nine percent of consumers think brands should donate to social causes, and 37% think they should encourage their followers to do the same.
Marketers often walk a fine line between successfully making a connection with purpose-driven messages and missing the mark, something evident in a recent misstep from McDonald’s. Brands can also take sentimentality too far, and millennials, in particular, aren’t always responsive to campaigns that urge them to be a part of a solution or embody the brand’s values, an Ace Metrix study revealed. Ads that focused on values earned the highest marks among consumers.
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This article first appeared in www.marketingdive.com
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