In every category, hundreds of brands compete for our attention. Perhaps half-a-dozen are tried, and only a few earn our loyalty. For example, many famous brands, such as Dell, HP, Toshiba, Samsung, Sony, Lenovo and others, sell electronics. Surprisingly, they don't have a cult-like following that Apple enjoys. Do you know why?
Well, the answer is given in the third-most popular TED talk of all time: “How Great Leaders Inspire Action.” In this epic TED talk, which has received more than 50 million views, British author Simon Sinek shares his idea of the Golden Circle: Why? How? What?
By why, he means purpose. By how, he implies a process. By what, he means what it is that you do. He says, "People don't buy what you do. They buy why you do it."
In today's super-competitive world, merely highlighting the functionality and features of an offering is not enough. Brands have to develop unique relationships with their audience, and purpose plays an instrumental role in that. If a company talks about its purpose, it attracts employees, customers, partners, influencers, etc. who believe in it. People don't look up to Apple as a computer, music player or phone company. They look up to Apple as a company that likes to challenge the status quo, and by associating with Apple, they belong to a cohort that represents something special.
As per research by Kantar Consulting, over the past 12 years, businesses with a high sense of purpose have experienced a 175 percent increment in brand valuation. Besides, according to a report by Accenture, 63 percent of customers want to associate themselves with brands that stand for a purpose, reflecting customers’ own values and beliefs. Interestingly, in 2018, Unilever’s 28 purposeful brands grew 69 percent faster than the rest of its business. Also, they contributed to 75 percent of the company's overall growth. Alan Jope, CEO of Unilever, said, “In the future, every Unilever brand will be a brand with purpose."
Sometimes purpose, vision and mission are used interchangeably. However, purpose goes beyond the vision and mission:
» Purpose means why a brand exists (the impact it wants to make). For example, the purpose of Southwest Airlines, the company says, is to connect people to what's important in their lives through friendly, reliable, low-cost air travel.
» Vision means what a brand aspires to be. For example, the vision of Southwest Airlines is to become the world's most loved, most efficient, and most profitable airline.
» Mission means how a brand will achieve its objectives. For example, the mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride and company spirit.
The most important thing about a purpose is that it makes sense to both head and heart, is relevant to the target audience, and is differentiated from the competition. For example, EY and Deloitte are among the largest service providers in the accounting industry. Although they provide similar services, their purpose is different. The purpose of EY is building a better working world, and the purpose of Deloitte is to make an impact that matters.
There are many benefits of having a brand purpose. A few of them are:
Purpose can position a brand beyond products
Nike co-founder Bill Bowerman once said, "If you have a body, you're an athlete". Nike's purpose is to unite the world through sport to create a healthy planet, active communities and an equal playing field for all. Nike sells shoes, apparel and accessories. But people don’t look up to Nike just as a sporting goods company. They look up to Nike as a company that honours great athletes and authentic athletic performance.
Purpose can deepen a brand’s impact on society
In the tough times of COVID-19, companies with purpose utilised their people’s expertise and adjusted their businesses to help the community. For instance, AB InBev, the world's largest beer company, has the purpose of bringing people together for a better world. The company started living its purpose in new ways by prioritising employees' health and safety, donating capabilities to help solve today's problems, supporting local communities, working with partners, and connecting with consumers in new meaningful ways.
Along with many other activities, the company has manufactured and donated alcohol-based hand sanitiser to hospitals and frontline workers around the world. Suppose you think in terms of factors like the top of the mind recall, reputation score, customer perception, public admiration, etc. AB InBev would have perhaps moved up in the ladder.
Purpose can inspire employees to do ordinary things extraordinarily
When Walt Disney's daughters were young, he used to take them to amusement parks. Like other parents, he had nothing much to do. While sitting on a bench, watching his daughters ride the attractions, Walt Disney got an idea to create an amusement park where the entire family could enjoy together. When he started working on Disneyland, his wife used to say, "But why do you want to build an amusement park? They're so dirty." Walt Disney told her, "That was just the point; mine wouldn't be." The purpose of Disney is to create happiness by providing the finest in entertainment for people of all ages, everywhere. Employees at Disney are taught that regardless of position, their purpose is to create happiness. The common purpose drives the extraordinary focus, effort, creativity and teamwork, leading to excellent customer experience and advocacy.
Purpose helps create new markets
Elon Musk said, “The fundamental goodness of Tesla ... so like the ‘why’ of Tesla, the relevance, what’s the point of Tesla, comes down to two things: acceleration of sustainable energy and autonomy.” Accelerating the world's transition to sustainable energy, Tesla has emerged as a worldwide leader in electric vehicles.
Purpose can help a brand navigate during crisis time
In 1981, Tylenol, the painkiller, accounted for 17 percent of Johnson & Johnson's revenue. Unfortunately, in 1982, seven people died after taking Tylenol capsules. Many people predicted that the Tylenol brand would not be able to recover from the reputation loss.
The company’s purpose challenges it to put the needs and well-being of the customers first. As a response to this crisis, the company recalled 31 million bottles of Tylenol capsules and offered replacements free of charge. Within two months, the brand was back in the market and regained substantial market share by the end of 1983.
Once your brand has the foundation of purpose, you will keep learning about the challenges of customers, upcoming trends in the respective category, and, accordingly, develop unique strengths and differentiated offerings to serve your customers that will eventually lead to profits.
The writer is the author of the book 'Booming Brands'
(Views expressed are personal)
The thoughts and opinions shared here are of the author.
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