Consumers increasingly expect brands to have not just functional benefits but a social purpose. As a result, companies are taking social stands in very visible ways. Airbnb used a Super Bowl ad to publicly cement its commitment to diversity. Tecate, based in Mexico, is investing heavily in programs to reduce violence against women, and Vicks, a P&G brand in India, supports child-adoption rights for transgender people. Brands increasingly use social purpose to guide marketing communications, inform product innovation, and steer investments toward social cause programs. And that’s all well and good when it works. But missteps are common, and they can have real consequences.
Competing on the basis of social purpose vs competing on the basis of traditional benefits
Just because a social benefit may create a lot of good will, it may not create ‘buy will’ because if the claim doesn’t matter to people or feel relevant to that particular purchase. Making the social benefit relevant to the drivers of choice in your category is not a trivial activity — and this is not new. You have to make your claims and your benefits relevant to your customer group, no matter what it is they are looking for. However, how you research some of these claims needs to be different.
Business case for pursuing purpose does exist, but so many others are late to the game. Why?
If there’s so much evidence that exists that suggests investing in social benefits can be good for your business, then why isn’t this more prevalent? But this goes to show that the business case is not enough. It could be that managers trying to initiate these changes within their organizations are too focused on proving that social benefits work, rather than clarifying how a social benefit could create value — focusing more on the business proof instead of the logic.
If you’re trying to get buy-in within your organization to create social benefits within your brand, you’ll probably bring examples from other companies, an industry report or research that says something like 90 percent of customers care about these topics. You’ll use these to prove that social benefits have merits. But according to research, this isn’t enough. In a lot of cases, the people who sign the checks want something that is very specific to their brand, the conditions of the market and their consumers. For this, you need business logic.
Business logic requires demonstrating how integrating this social benefit into your brand activities will create value for your customers. Traditionally, there are two ways to answer this question: Does it create new or strengthen existing attributes or create adjacencies? For example, say that you’re not now distributed in Whole Foods, but if you launch a new product line that is all organic, Fair Trade and has recycled packaging, you may be able to enter Whole Foods. That’s a new channel expansion and helps you achieve growth in a new segment, so that’s an adjacency argument. An attribute argument would be if you made changes to your supply chain. Say you switch to sustainable agriculture as a way of generating ingredients and as a result of doing that, are able to create greater naturalness in your food offerings. Now, imagine that you’re a restaurant chain, so you compete on great taste and quality of ingredients. By using sustainable agriculture, you can strengthen the attribute of great-tasting ingredients.
That’s what’s meant by business logic — the overall idea of where your value is going to come from, whether it’s new benefits or reduction of costs. It could also be removing obstacles and reducing the costs that people associate with your category, such as bottled water. The choice is yours, but ultimately, business logic helps clarify for internal stakeholders why these investments are going to translate to value for the company.
Below is novel framework to help companies find the right social purpose for their brands:
Building a Strategy
Some brands have integrated social purpose into their business models from the start: Think of Patagonia, TOMS, Warby Parker, and Seventh Generation. The societal benefit these “social purpose natives” offer is so deeply entwined with the product or service that it’s hard to see the brands’ surviving intact without it. Imagine how customers would react if TOMS abruptly ended its one-for-one program, which donates shoes, water, or eye care to the needy for every product it sells. And what would happen to Patagonia’s brand if the company abandoned its commitment to eco-friendly manufacturing? Social purpose natives like these must be diligent stewards of their brands.
To develop a social purpose strategy, managers should begin by identifying a set of social or environmental needs to which the brand can make a meaningful contribution. To create a more comprehensive set of choices, managers should explore social purpose ideas in three domains: brand heritage, customer tensions, and product externalities.
Of the many benefits a brand may confer, only a few are likely to have defined the brand from the start and be the core reason for its success. A look into the brand’s heritage—the most salient benefits the brand offers customers—can help managers identify the social needs their brands are well positioned to address. For instance, since its launch, in 1957, Dove has been promoted as a beauty bar, not a soap. Enhancing beauty has always been central to its value proposition. Therefore, it makes sense that Dove focuses on social needs tied to perceptions of beauty.
An unbounded exploration of social issues relevant to your customer base will most likely yield a list that’s too broad to be very helpful. To narrow your options, look at the “cultural tensions” that affect your customers and are related to your brand heritage. Such tensions, first characterized by marketing strategist Douglas Holt, refer to the conflict people often feel when their own experience conflicts with society’s prevailing ideology. Holt argues that brands can become more relevant by addressing consumers’ desire to resolve these tensions. Classic examples include Coca-Cola’s “I’d Like to Teach the World to Sing” commercial, which promoted peace and unity at the height of the Vietnam War, and Budweiser’s recent Super Bowl ad celebrating the immigrant story of one of its founders, which aired in the midst of a heated public debate about immigration.
Finally, examine your product’s or industry’s externalities—the indirect costs borne or benefits gained by a third party as a result of your products’ manufacture or use. For instance, the food and beverage industry has been criticized for the contribution of some of its products to the increasing rates of childhood obesity. It has also faced concerns about negative health effects resulting from companies’ use of artificial ingredients and other chemicals in their products. Panera Bread’s decision to position its offerings as “clean food”—made without “artificial preservatives, sweeteners, flavors, or colors from artificial sources”—is a direct response to a social need created by industry externalities.
Pare the List
After considering social purpose ideas in the three domains, managers should pare the list to three or four social needs, and propose strategies for each, to be evaluated as final candidates for the brand’s social purpose.
To guide the prioritization and selection process, managers should gauge how the social purpose idea both generates business value and minimizes the company’s exposure to risk. An effective social-purpose strategy creates value by strengthening a brand’s key attributes or building new adjacencies. At the same time, it mitigates the risk of negative associations among consumers and threats to stakeholder acceptance.
Managers often consider the fit between the social need and the brand as a criterion for evaluating social purpose strategies. However, good fit isn’t enough. They should also consider how social purpose can create value by strengthening (or creating) brand attributes relevant to consumer choice in a given industry.
We define brand attributes as characteristics managers instill in a product or service, including features and benefits as well as personality or reputation supported through marketing communications. A restaurant, for example, might use sustainably sourced ingredients (a feature), which can reinforce a perception of great taste (a benefit), and through marketing communications, promote a reputation for environmental consciousness (the brand personality).
To assess the relationship between different social-purpose strategies and brand attributes, managers should ask:
- Does the strategy reinforce existing brand attributes?
- What new and valuable brand attributes might it create?
- Would the strategy be difficult for competitors to imitate?
One reason a brand purpose strategy can fall short of expectations is that it doesn’t adequately address the financial interests of investors and other stakeholders. One way a social purpose strategy can boost business performance is by enabling the brand to compete in adjacent markets.
The Social Benefit Pyramid
To gauge whether a proposed brand purpose and strategy can support a move into adjacent markets, managers should ask:
- Can the strategy help create a new product or service for current customers?
- Can it help open a new market or channel or attract a new customer segment?
- Can it help reduce costs or increase the profitability of the business?
It’s important to think through how consumers will perceive the social purpose a brand is considering. Will they see the benefits as an asset? A liability? Or irrelevant to their purchase decision? In predicting customer response, brand managers need to understand the range of cognitive associations that different consumer segments may bring to a brand’s social claim. Take, for instance, the brand attribute “organic ingredients,” which is typically used to support claims of health or environmental benefits. If it appears on the label of a tea product, consumers may associate it with augmented qualities—perhaps improved taste or healthfulness. But how might they react to an organic dry-cleaning service? A growing body of research demonstrates that consumers don’t have an equal or easily predictable response to social benefit claims: Labels like “fair trade,” “environmentally friendly,” and “ethically sourced” can sometimes induce negative associations—such as poorer performance, in the case of the dry cleaner.
Competing on social purpose is sure to attract criticism—which can derail a program.
To assess the associations consumers may have with different brand-purpose strategies, managers should consider the following questions:
- Is the social need likely to be perceived as personally relevant to target consumers?
- Will consumers be able to easily associate the brand with the social purpose?
- Will the social purpose strategy induce positive (and not negative) associations about the brand or product?
Competing on social purpose is sure to attract criticism—virtually all social issues have both advocates and detractors—which can stall or even derail a program. Thus, managers must evaluate whether key stakeholders will accept and support the proposed social-purpose strategy. As with customer associations, some stakeholders may embrace a brand purpose while others reject it. Our research has found three drivers of negative reactions: inconsistency between the brand claim and the company’s actions, politicization of the claim, and suspicion about the firm’s motives.
Stakeholders may question a brand’s motives if the initiative appears to be driven primarily by commercial interests. Stakeholders understand that companies are profit-driven, but if the company’s initiative offers no apparent social benefit, they may feel manipulated—as often happens if a brand is found to be “greenwashing.” To mitigate this risk, it’s critical to select a social purpose for which the brand can make a material contribution.
To assess whether the social purpose strategy is likely to be accepted by stakeholders, managers should ask:
- Can the brand have a demonstrable impact on the social need?
- Are key stakeholders on the front lines of the social issue likely to support the brand actions?
- Can the brand avoid inconsistent messaging, perception of opportunism, and politicization?
THE PROBLEM: YOUR BUSINESS ISN’T GROWING AS FAST AS IT SHOULD!
Your sales have stagnated or decreased, and you can’t figure out why. Discover what’s holding you back from achieving predictable sales growth in your business.
If you want to grow your business, you need a proven plan and framework. That’s what you get with the 2X Your Sales Discovery Session.
Want to learn about a formula for Predictable Growth that will put your business on a 90-day path to 2X Your Sales?