Purpose. Defined by The Cambridge English Dictionary as “why you do something or why something exists”.
As humans, many of us have our own purpose. But what does purpose mean for brands and organisations? In recent years, the word has been used more and more. In the basic sense, every company has a purpose, a cause for their existence – from fridge manufacturers to florists. But how do you make yours feel real and authentic, so your customers believe the product or service you provide is beyond just output and profit? To achieve this, you need to look at your business or organisation to explore the deeper, more meaningful “why”. What impact do you have on the world? What do you stand for? And what would society miss, if you were gone?
Now more than ever, consumers want to see companies believe in something. COVID-19 has shaken up our existence and caused many to care more about the community, the world and the bigger things in life. In this increasingly purpose driven world, firms are revisiting, refining and sometimes redefining their organisational purpose in the context of their societal and environmental impact. And for good reason. According to the annual Edelman trust barometer, belief-driven buyers are critical when choosing, switching, avoiding or boycotting brands. Additionally, studies have shown that purpose-driven companies often witness higher market share gains and grow faster than their competitors.
What does this mean for increasing trust?
The link between purpose and trust is paramount. We are entering what might be termed the ‘integrity economy’, one driven by the environmental, social and governance agenda. The consumer is much more conscious in their buying decisions. Indeed, 56% of people say that the environmental and social practices of a company have an impact when choosing to buy from them (Me, My Life, My Wallet, 2020). We won’t choose a brand solely based on the product and the service they offer us. We choose a brand because we also have a level of trust in them and how they operate. If an organisation has a clearly defined purpose and “reason for being” that goes beyond just profit, it is more likely to increase those levels of trust. Indeed, 71% of customers say that if they think a brand is not putting people above profit, they will lose trust in that brand forever (Edelman Trust Barometer 2020).
But a word of caution. Your company’s purpose must be translated into tangible reality, in order to truly build trust. Some organisations see purpose in terms of the shiny make-up that can act as a convenient marketing mechanism. Hey world, look at the good we are doing! But that approach might be even more detrimental if it isn’t truly realised. Purpose needs to be embedded into the organisation. If not, brands can be described as “purpose washing”, something that will fundamentally decrease levels of trust. Consumers are too informed, too connected and too sceptical in this information age to fall for a brand that claims to be pursuing a profound “purpose”, when really what it is after is a stronger bottom line.
One way to avoid this is to ensure that your purpose is translated across the core elements of KPMG Nunwood’s Six Pillars. Based on 11 years of research, The Six Pillars show how every outstanding customer relationship has a universal set of qualities. How does your brands overarching purpose feed into the pillars, such as showcasing empathy when interacting with the customer, meeting and exceeding expectations of the product/service, or approaching resolution in the best possible way? Purpose can increase trust in organisations – but only if truly embedded in the end-to-end customer journey, otherwise it can have the opposite effect, seen as nothing more than a marketing spin. Organisations that understand and deliver against The Six Pillars are also proven to drive better outcomes, grow more quickly and create greater shareholder value.
How can my organisation become more purpose driven?
Here are three ways you can embed purpose into your organisation.
1.Lead from the top
It’s the CEO and C-Suite who set the purpose agenda. For example, in the latest UK 2020 Customer Experience Excellence report, we explore how beauty firm Lush is one company where the founder set the tone right from the offset, to ensure the company was truly purpose-driven in what they do. In order for purpose to have an impact, it cannot just be delegated to the marketing department. Purpose sits at the top and is filtered down – not the other way around. Make this an agenda point at board level.
2.Embed into the organisation
As mentioned, your company’s purpose should be translated across each area of your business and help form part of the decision-making process. The UK Bank first direct is a great example of this, putting people first in what it does. It’s agile-at-scale operating model allowed the bank to very quickly scale up a dedicated and empowered team trained to empathetically respond to customers difficulties. It holds a strong sense of purpose with c3000 people committed to the customer. Your core purpose should be the underlying fabric of all activities your company undertakes.
3.Strive for openness and clarity
Organisations need to be open as to how their purpose connects to their business (and is relevant to their business), while at the same time having a positive impact on society. A sound story-telling approach is essential, one that clearly and simply paints a picture to explain why shared value creation is beneficial for all. The M&S “never the same again” programme sums up the position of many companies as they reimagine their company and role during and after COVID-19. For M&S, this promises to be a complete overhaul of the shopping experience.
Overall, purpose is key for building trust, and in turn driving business performance. Especially with the pandemic, it’s particularly key for organisations to start thinking about their impact on the world and how they can strive to do better. More and more customers are conscious shoppers – this fact cannot be ignored. To stay ahead of the game, brands should tap into this and focus on why they matter, what they believe in and how they can make a wider impact.
You can read more about purpose, the new customer and how companies are approaching this shift in our latest CEE report, which you can download here.