THE POWER OF PURPOSE IN BUSINESS AND WHY IT MATTERS
Purpose is a bit of a hot topic these days. Purpose, your WHY, vision & mission – different sentiments of the same thing.
It’s always existed, but it’s often been a topic reserved for the ‘soft side of business’. Marketing, HR, maybe innovation.
BUT, as people the world over begin to place greater emphasis on defining the purpose in their lives, brand & business purpose needs to move into the C-Suite and become as important a topic as annual projections and profit margins.
PURPOSE + CONSUMER
Consumer needs and expectations have moved on. Unless purchasing something fundamental to our survival, we have long been emotional purchasers – let’s face it, that new pair of sneakers isn’t a life critical purchase, it’s a purchase based on wants and desires. And here’s the thing, we now want purchases that fulfill our wants and desires, but we’re also looking for purchases that represent us (image), make us feel like we made the right choice (sustainability) and give us a sense of being a part of something bigger (purpose).
Long-term consumer advocacy, which many strategists would consider no longer achievable (I say, really?!) and those return purchases that increase your buyer’s lifetime value and improve ROI, are still driven by people connecting with who you are and what you stand for. If a greater purpose is on our consumer’s minds, then why would it not be on ours?
PURPOSE + CULTURE
Now here’s the other factor in business that relates to people – our culture. You see those folks I talked about above who care about more than just fulfilling their needs – they’re your employees too.
And here’s the thing. This illusive ‘Millennial generation’ we’re all so frantically discussing, which by the way I don’t believe is limited to generation (but that’s a topic for another post), they want more than just to go home with a monthly pay cheque. At the end of the day, we spend 47% of our waking day Monday-Friday at work and while the money, of course, helps us enjoy our hobbies etc, we don’t want to feel that the largest part of our week is just dropping into work, mechanically completing our jobs and not necessarily adding anything of value. We want to know that our time is well spent.
PURPOSE + PROFIT
I’ve worked with enough FMCG teams to know that price is a continuous battle we run when trying to win space on shelf and space in the basket. And look, Price will always be important to consumers – there are a lot of things we want to stretch those pay cheques across.
BUT, here’s what purpose does to that price-point, it stops it dropping so far that you just become another commodity fighting to fulfill the basic needs of this latest shopping trip. It changes the dial to be about an emotional purchase whether that be, ‘am I buying the best thing for my family’ or ‘does this brand satisfy my need to do something good for the world’ to name a few.
Then there is innovation and business expansion. If you’re just another company that sells health foods or you are just about providing washing powder to clean clothes, then expanding beyond that product can be a hard thing to ask a consumer to trust you on. Look at Apple – if they hadn’t focused their business on a purpose, a greater Why, then they would have just been a company that created great computers – no revenue streams gained from smartphones, smartwatches, smart TVs, cars, iPods, Music, Apps…need I go on.
True, you can just launch another product, under another brand/business name and create another revenue stream that way. But here’s the thing – that means a whole new marketing budget and starting from scratch to grow and create your community of buyers. That means waiting for the years it will take you to scale and increase purchase volumes. Think about it.
PURPOSE + LONGEVITY
Lots of people have highly successful careers selling commodity or one-hit-wonder based products and changing up their product offering as and when the latest gadget or new product gets popular. Think the Rapid Inflatable or the new Fidget Spinners. If that’s your bag, I say go you! But if this is your ball game then you best hope you’ve always got your crystal ball polished as innovations of this type are hard to come by and there’s a lack of certainty around how long the sales will keep coming.
Then you also have the graveyard businesses who left our world some time ago. The Blockbusters, the Kodaks, the Compaks. If they had been purpose driven, would they have been able to pivot and ensure their business for greater years to come?
If you are looking to create a business with long-term viability from not only in a recurring customer base, because consumers don’t forget about you tomorrow, but because you have the flexibility to duck and weave as the world of technology changes, then selling on more than just price, solution and trend keeps your core business alive.
PURPOSE + COMPETITIVE RESILIENCE
Lastly, and this is one I’m sure more than a few investors have echoed around the blogosphere.
Brand purpose creates a differentiation that product or service alone cannot guarantee. You might have a quick win for a few years (although now it’s more likely months) before a competitor catches up to you and at least matches your offering based on features and value. But build a purpose that both employees and consumers connect with and it will take way more than just a comparable product at a discounted price point for them to wade in and steal the crowd.
People are at the heart of Business – whether those who help us run it or those who buy what we sell. So if Purpose is important to them, then purpose needs to be important to EVERYONE. Purpose is more than just a fluffy marketing or coaching term – how will you use it?
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