Brand purpose: Not altruism, just good business sense

Charu, Ganesh’s wife, buys clothes from a brand called Tamarind Chutney. It’s headquartered in India’s capital, Delhi.

There are hundreds of companies like this that sell similar products in India. And in the past, Charu did buy from some of these others. Their products were good, sometimes even very good, and they matched her price expectations. But ever since she came to know of Tamarind Chutney, she has preferred to buy from them.

Why? ?

Because she likes why they are doing what they are doing: they have a purpose that goes beyond making profits. Tamarind Chutney was launched ‘out of a desire to support artisan livelihoods, preserve India’s craft heritage and sell amazing products – all the while following ethical business principles.’ And, for as long as they have been in existence, they’ve been doing a bloody good job of this!

Linked to their purpose are the brand’s values of sustainability, transparency and community. Their products come with tags that talk about the genesis of the material, the people who have made the clothes, how these materials are low on carbon footprint, and other details.

All this, in Charu’s opinion, sets Tamarind Chutney apart from other companies in this category in India. From the brand’s growing customer base, it looks like many others think the same way about this brand.

Across the world, across categories, more and more people are choosing to buy from brands that are driven by a strong purpose. This is because more of us expect business entities (brands) to not operate in a ‘profit vacuum’ but to do their bit for the communities and natural environment they are closely connected to and dependent on. The general view among a rising number of people is that brands have a social responsibility (to which they have largely been blind over the decades), and they must discharge this diligently. While this view was already gathering ground by 2019, the Covid crisis has made it all the more important.

Every year, the Purpose Power Index? measures consumers’ perceptions of brand purpose in the USA, covering around 200 brands from 50 industries. The audience modelling tool used in the 2022 edition of this study estimates that 85 million U.S. consumers are motivated by company purpose to buy goods and services. And 149 million would choose to boycott a company on the basis of its socio-political stance on issues. There can be no clearer indicator that being purpose-driven is not about altruism for brands; they reap economic benefits too. Though we are not aware of a similar quantitative study on brand purpose in other parts of the world, anecdotal evidence from Asia and Europe indicates that more consumers there lean towards brands that ‘live’ a strong purpose.

A word of caution. Let’s not confuse purpose with ‘cause’. The terms ‘cause-driven organisation’ and ‘cause-driven brands’ are used a lot. Often loosely. These refer to brands supporting causes linked to serious social problems that are usually not related to their core business – what is generally known as corporate social responsibility (CSR). A brand running initiatives on Earth Day and another doing something to help alleviate global hunger are examples of CSR.

But being purpose-driven, in our view, means two things for a brand:

1.?????The brand identifies a usage-related problem it is solving for consumers and consistently does a damn good job of solving it – e.g., making ergonomic office furniture, keeping in mind the negative consequences of bad posture.

2.?????It goes beyond solving this usage problem and invests in improving the conditions of the communities it works with (in this example, the artisans and others who make the furniture) or the environment (sustainable forestry) or both. Depending upon the context, it could even go beyond this.

Notice how these aspects stem from the business in which the brand is involved. Interestingly, the purpose is just the conjoined twin of the driving belief of the brand, about which we spoke in the last issue of this magazine. Having framed the driving belief and purpose in the form of statements, the brand lives by these, day after day after day. It widely communicates its driving belief and purpose and regularly tracks its performance on both.

Does your brand have a driving belief and a purpose? If it does, tell us what they are. And if it doesn’t, isn’t it time you framed them and let them power your brand?

On that note, see you again next week!

Joy and Ganesh

_____________________________________________________________________

Speaking of Brands?is a weekly practical, no-nonsense primer on branding & communication for smart business owners. If you want to build strong, lasting brands, subscribe to it now!