What does the auction house Christie’s and the shoe company Tom’s Shoes have in common? They are both “values-driven” or, more broadly, “purpose-driven” brands.
Companies like these have gone past the “Corporate Social Responsibility” mindset of past years, when it was enough for a company to contribute annually to a worthy cause. Instead, “purpose-driven” companies have baked "purpose-driven branding" into their very business models.
In her article, The Purpose-driven Brand for the website Target Marketing, Jeanette McMurtry discovered that Christie’s raised $58 million fo 300 charities in 2014 through its model of helping the seller of art contribute to a charitable cause, By being a “purpose-driven brand,” Tom’s Shoes grew from $9 million to $21 million in revenue in three years.
To better understand why this is so, we’ll dive more deeply into this “purpose-driven” concept.
The internet has greatly disrupted modern life, for the better. As part of this disruption, consumers now have hundreds, if not thousands, of choices for the same good or service.
KV Sridhar, founder and chief creative officer of the newly-launched, Mumbai-based creative agency, Hyper Collective, was quoted in the Economic Times, saying: "How else do you distinguish yourself in an age of formula and commoditisation? It's by value systems: your purpose of existence must find a place in society."
Over the years, there has been plenty of other data to demonstrate this is true, such as that documented by Jim Collins and Jerry Porras in their book Built to Last; the work done by John P. Kotter and James L. Heskett’s as shared in their book Corporate Culture and Performance.
The “purpose versus profit” debate is a false dichotomy. It is both. According to the 2012 Edleman Good Purpose Study, 76% of global respondents say it is “OK” for brands to support good causes and to make money at the same time. This is up 33% since the 2008 study.
“The misconception that brands could solely operate for profit or for purpose is now defunct;” writes Stacy Anderson, lead strategist of the purpose-driven brand consultancy We First. “These are no longer mutually exclusive motivations, but a new brand structure. The future of profit is indeed purpose.”
In that same Edelman study noted above:
Christie's Chief CSR Officer, William L. "Toby" Usnik, notes that consumers of all ages are seeking to buying relationships with brands that align with their values. This is especially true of Millennials, who, as a group, seek greater meaning in all that they do.
Another way that the internet and, especially, social media, have disrupted commerce is that consumers are now demanding even greater levels of transparency and authenticity. If consumers even get a whiff of opacity or inauthenticity, they’re instantly gone. Often they also share those thoughts with everyone in their social media circles. To be a purpose-driven brand, therefore, means that “purpose” is the brand’s DNA.
“Brands must reorient their perspective on corporate purpose to “be a mission with a company, not a company with a mission”, according to Anderson.
As an entrepreneur, your personal core values are your business values. After all, you started your business because of your personal values, outlook, and passion.
These values are essential to establishing your purpose-driven brand. They are your guideposts, foundation and drivers in bringing your purpose-driven brand to life. These core values are fundamental to ensuring your authenticity as a purpose-driven brand, as they help direct and shape your business’ purpose.