Why Purpose-Driven Companies Are Beating The Competition - Innovate New Albany | New Albany, Ohio

Why Purpose-Driven Companies Are Beating The Competition

Purpose-driven brands are not a new phenomenon. As far back as ancient Greece, Hellenic cities required businesses looking to operate a storefront to declare how it would benefit the community before it was allowed to occupy space. What purpose did it serve apart from profit?

Businesses today are not being held to this standard by city governments, but rather by the citizens. Consumers today are more educated, informed, aware and vocal than any other time in history and are voting with their dollars. The millennial generation has very different values than their parents or even their older brothers and sisters and they’re not afraid to mobilize to achieve their aims.

A company’s size or the power it claims to yield holds no interest for today’s youthful customer, rather they want to know what the company is doing to improve the community it operates in. A number of research companies have been tracking this trend in recent years and the results should serve as a wake-up call for any company complacent in its efforts of corporate social responsibility. Edelman’s Good Purpose study makes for sobering reading:

  • 87% of global consumers believe that businesses need to place an equal weight on societal issues as their own business interests.
  • Only 6% of consumers believe that the singular purpose of a brand is to make money for its shareholders.
  • 90% of consumers would boycott a brand if they discovered irresponsible business practices and more than 55% have done so in the past 12 months.
  • 54% of employees say their company’s purpose is not clearly communicated with employees.
  • 91% of consumers would switch brands to support a brand of similar quality and price if they supported a good cause.

That’s the “bad” news, depending on how you view your half-full glass of water. The good news is that the brands that have addressed the above issues have made changes to focus on their purpose and are now experiencing record growth.

Havas Media’s Meaningful Brands Index of purpose driven brands outperforms the stock market by 120%. Jim Stengel and Millward Brown Optimor’s study of 50,000 brands over 10 years found that the top 50 brands by financial performance were all purpose driven brands. These brands together outperformed the S&P500 by 400% over this time frame.

So stop worrying about your logo, worry about your locale, instead of sales targets consider social impact targets, instead of chasing market capitalization chase Heartspace.

As business owners, we have an obligation to consider the facts that affect our business. For me, the facts are clear.

Barry Chandler is the co-founder of Storyforge, a Purpose Agency focused on helping companies discover their purpose to allow them achieve their vision, build preference and drive margin. Barry has been building award-winning businesses since launching his first company in Ireland in 2003. His last company, a digital marketing agency, was acquired in 2012 by a California based publicly traded entertainment company which then hired him as Chief Marketing Officer. It is his belief that the greatest brands seek to change the world, improving the lives of their associates, partners and customers.

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