This week is all about purpose-led brands – how ethics plays a role in market share, the Millennial push for change, and the role of mission statements. Want to get in on the activism? Read on.

Purpose makes a profit

Find out why socially-conscious brands are getting more of the market share, and how you can, too.

Carrie Lewis

Business Management

Ethics and social conscience

3 minute read

Now, more than ever before, consumers care about the products they buy and the ethics of the brands that produce them. So, it goes without saying that brands need to be aware of this growing trend.1 Before we go any further, let’s get a few stats in:

83% of Millennials want brands they buy from to match their values.2

76% of Millennials want CEOs to use their power for social good.2

43% of consumers ditch brands when disappointed by their actions.3
 
So how does this look in the real world, and what does it mean for the long-term?
In short
  • Increasingly, consumers want to see brands driven by purpose.
  • A marketing campaign or new mission statement isn’t enough. Ethics must guide all aspects of business.
  • Companies that do right by people and the planet will win in the long run.
One good deed isn’t good enough
Ethical consumers get pretty cynical when brand do-gooding is just a temporary fad. Instead, you have to show sustained ‘purpose’. Every aspect of your business has got to meet the ethical standard, and that means putting purpose next to profit in order of importance.

Patagonia is a star example of this. Their goal? ‘To save our home planet'4, no less. But unlike many companies’ self-righteous mission statements that never translate to actions, this is an integral part of Patagonia’s business structure – from marketing to production materials and processes; from treatment of staff to their use of profit to support environmental groups. And guess what? This well-considered ethos is paying off. In just one year, they recorded a 25% revenue increase, and they’re still climbing.5

Customers ain’t saints, but they’re always right
Many consumers have the greatest intention of supporting purpose-led brands. So they do put their money where their mouth is… up to a price point. That’s because price is still a huge factor when it comes down to the point of sale.6 For example, if an eco-friendly detergent costs 8-37% more than a ‘plain’ one, it’s the latter that wins a spot in the trolley.

But that doesn’t mean their ethics are out the window; it just shows that they do their best to make ethical decisions where they can afford to. Take another look at the stats at the top of the page. Those trends won’t disappear – they can only grow. So even if they don’t make a difference to profits now, they could in the future. Especially as the thought leaders in this space – Millennials – grow their influence and wealth.
“Every aspect of your business has got to meet the ethical standard, and that means putting purpose next to profit in order of importance.”
It’s a long-term change
For well-established brands, this could be tricky. After all, you can’t flick a switch and become ‘purposeful’ overnight. It takes a lot of effort to transform profit-driven mindsets and processes. In the meantime, nimble start-ups can overtake legacy brands to meet consumer sentiment at a competitive price point.

But take heart; becoming ‘purpose-led’ is achievable. Consumers aren’t looking for a quasi-charity; all they want is for companies to just do better. That means treating people well and respecting the planet all through the supply chain. So if you’re up for the challenge, it could be the making of you.

on corporate hypocrisy
North Face takes a lot of pride in sustainability and the 'preservation of the outdoors' – which is why they recently refused to sell to an oil and gas company. Critics fired back, pointing out their reliance on fossil fuels, their parent company’s private jet fleet, and concerns about factory working conditions. Whoops.
Making a statement
Mission statements don’t just give a home to all the needy little buzzwords out there. They exist as an ethical code for business, telling us exactly what a brand values most (apart from profit).

So what do some of Australia’s biggest companies want to say about their place in the world? We generated a word cloud and found these trends:

  • No surprise, people come first. Lives, families, and community make corporations sound like utopia projects.
  • Better, products, and service show a focus on business and purpose, but it comes second to the people power.
  • Ambition plays a role, too. Power, leading, great, and respected all make their mark.
  • Promisingly, accessible and affordable show a growing awareness of inclusivity. Trust and integrity also hold sway.
References
  1. Good.Must.Grow, The COVID-19 Pandemic Has Led to a Surge of Socially Responsible Behaviors According to Special Release of the Conscious Consumer Spending Index (#CCSIndex) (22 May 2020) 3BL CSR Wire.
  2. 5WPR, Consumer Culture Report (2020) 5WPR.
  3. Accenture, A brand. New. Purpose.: Navigating the human and business impact of COVID-19 (April 2020) Accenture.
  4. Patagonia, Patagonia’s Mission Statement (date unknown) Patagonia.
  5. Craft, Patagonia revenue (date unknown) Craft.
  6. Gary Mortimer, Climate explained: are consumers willing to pay more for climate-friendly products? (30 September 2020) The Conversation.
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