Why Purpose-driven Organizations Dominate the Market

Purpose-driven organizations have a huge competitive advantage. A couple of decades ago, some companies stumbled on this and have outgrown their growth projections by miles. Nowadays, having a purpose, an ideal, something bigger to strive for, is essential. Those who don’t are the dinosaurs of the business world, just like those companies that didn’t appreciate the power of the internet some 20 years ago. Gone. 

What makes having a purpose so powerful?

Brand Differentiation

Organizational values, such as prioritizing quality, your customers, or innovation will not only generate brand differentiation, but also form a basis for customer relationships. And it’s not just the forming of those elements in and of itself, but the depth behind it, because those are very difficult to copy. They can represent and communicate your value proposition and provide credibility behind your words - consistently communicated through culture, people, and assets. 

Value-driven

By having a purpose, your organization is driven by its values and that will endure. What is at the core of your organization? What is it about your value proposition that makes you stand out? Do you focus more on innovation, or customer service for example? And why? By getting to the core of your organization and answering not just what it is you do, but why you do what you do, what you stand for, what your ideals are and how you aim to achieve them, can tell your audience a great deal. It tells them (through words or actions) that they are buying so much more than just a product or service. They help you improve the world – in which they themselves help improve the world through you. 

There are three ways to contribute to the depth of your customer relationship, which will result in more emotional connections forged and a more loyal base of brand advocates.

1. Support the Value Proposition

When a product or service comes from your company, people already know it is great without ever having seen the product. This means the reasons to believe behind the functional benefits of your product are derived from your value proposition. 

2. Credibility

The same principle as above also counts when releasing new products into the market. You, as a top-quality bakery, can be a credible endorser when releasing a new, never-tried-before bread onto the market. People know your reputation and when you’re well-positioned in the mind of the customer, people don’t hesitate about the quality of the new product. 

3. A Basis for Relationships

Actively pursuing connecting with people, even if it overrides company objectives is worth doing because it improves people’s lives. In doing so, such relationships can be stronger and more impervious to competition than relationships based just on functional benefits: It promises a higher purpose. Customers can truly connect this way and can be touched because of the respect for that higher purpose. 

Strategies based on functional benefits are often strategically ineffective. Customers might not believe that the benefit represents a compelling reason to buy from you. Or they might view all brands who focus on functional benefits as equally beneficial – in which case you compete mostly on price, or competitors trying to copy you or one another. That is another reason why you need purpose.

Also, people can strive towards different benefits, for self-satisfaction for example, when looking for brands, consider the following benefits:

1. Emotional Benefits

Emotional benefits relate to the ability of a brand to make the buyer feel something during the user experience or purchase process. Emotional benefits add a certain richness and depth to the brand and the experience of owning and using the brand. 

2. Self-Expressive Benefits

When looking for self-expressive benefits, people express their own or their idealized self in a variety of ways, like friends, opinions, job choices, lifestyle, etc. Brands that people admire, buy, or use also provide a vehicle for expressing their (ideal) self-image to society. 

Remember that each person can have roles when it comes to self-expression. A woman can look through the eyes of being a mother, a tennis player, a CEO, for example., and for each role they have a different self-image. 

3. Social Benefits

Social benefits can be created when a brand-driven community is formed around a person’s lifestyle and values. A brand can enable a person to be part of a social group and thereby convey social benefits. When people buy your product, they get a sense of belonging and it gives them an identity within that social spectrum. 

It is possible that multiple benefits are present. It is important to prioritize them, because usually one is more dominant than the others. 

Stefan Kuijer