Why you need impact-driven purpose and why you don't

 

"Why does your business exist beyond making money?"

(The question most consultants ask to define purpose)

Purpose your “why” is the basis of every traditional business strategy. Since Simon Sinek's book Start with Why, it seems like Purpose needs to be the essence of any brands' communication strategy.

While purpose defines the meaning behind a business, today it is often paired with social or environmental impact. Aside from purpose, impact has become another component that seems like it needs to be part of every businesses' communication strategy. If you have no impact — well, then you're probably evil! 

But what is the realistic outcome of purpose, and does every business really need impact?

In this article, I want to help you clarify if you need to put impact-driven purpose at the center of your businesses brand strategy or not. We’ll look at why impact and purpose works, and we’ll also look at why impact-driven purpose may be something that is less central to your brands' success.

“Society is demanding that companies… serve a social purpose. 

To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. 

Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”

Larry Fink CEO Blackrock Inc.

When Larry Fink the CEO of Blackrock, the world's largest investment banking firm, focuses his 2018 Letter to the CEO’s talking about the importance of impactful purpose, it is clear purpose it's impact are beyond naive idealism. 

Like Fink describes, the world, customers demand impactful purpose, demand the contribution of businesses to society.

And increasingly so, Millennials, and Gen Z are more passionate about social and environmental issues than generations before.

In the next 10–20 years, when most gen X and boomers retire, gen Y and Z will become the dominant buyers in the marketplace. So, it makes sense to invest in the future. 

There are several statistics to back it up:

• “71% of consumers are tired of brand's empty promises.” "64% of customers are willing to pay more from a brand with a higher purpose than making profits." — 2021 Meaningful Brand study, Havas Worldwide  
•  "86% of over performers in revenue growth were purpose-driven businesses." — 2020 Insights Study, Advertising Research Foundation
• "77% of gen y and gen-Z’ers are more likely to buy from brands solely due to their values and reputation." — 2019 Brands taking stands survey, Accenture

Impact-driven purpose can help garner positive brand equity, especially with younger generations. 

“Find a trend and get in front of it”

The well established German brand true fruits used impact trends to become the market leader in an overly saturated market.

Sustainability is one of the most prevalent trends of our time. From true fruits start in 2006, they made strong statements with their packaging:

True fruits uses distinct glass bottles that transparently visualize the amounts and ingredients in the smoothie. What you see is what you get.

“True fruits - no tricks” is one of their values. As they put it: their purpose is to provide honest and healthy products presented in a sexy way so that their customers can enjoy fruit juice without a bad conscience. 

True fruits visualizes the ingredients and their amounts on each bottle.

They further emphasized the transparency of their brand by using their campaigns to comment on topics like racism, gender inequality, and on the environmental impact of plastic.

Translation: “Say yes to plastic! Glass can break.
Plastic stays in the ocean forever! ”

With an ironic twist, they're saying, yes plastic will not break like our sustainable glass bottles, but that's exactly the problem. Plastic trash won't go away.

Translation: “Glass clear decision.”

These ads were placed next to each other.

Impact works and is powerful when it is used as a way to harness trends and develop radical differentiation for your brand.

True fruits have used their purpose in a way that harnesses impactful trends to boost their brands identity and reach. Sincerity and transparency are their core focus, which enables them access to multiple impactful trends while still maintaining a coherent brand identity.

Here is another recent example: During the last German federal election in 2021 they put each political party's program on the back of their bottles. This way, testing how well people actually knew what each party stood for.

The need for Impact is an overall societal phenomenon driven by an idealistic gen y and gen z. This leads to several impactful trends you can utilize in different industries. 

But does every business, does your business, really need impact or require you to activate social or environmental trends?

This brings us to one of the core misunderstandings about purpose. Purpose can be completely free from impact. While, impact has become a very commonly used way to pour gasoline on the fire of an already well constructed brand, purpose can be purely technical or strategic and still exceptionally effective.

Amazons purpose statement reads: 

“to be Earth’s most customer-centric company”

Purpose is often mistaken for being about showing you are good or have a wonderful culture at your company. Purpose, however, is really something that is quite functional and doesn't have to have anything to do with saving the world or having a table soccer table at your office. 

Purpose is neither bad nor good. Purpose helps your business define its brand identity and prescribes how your business and company culture is oriented.

In that way, even though it might not be something that is regularly and directly communicated to customers. Purpose is an essential building block of any well-crafted brand strategy.

But what about impact? Can businesses afford to compete without utilizing impact-driven trends? 

One of the most well-known pairings of purpose and impact is the outdoor clothing company Patagonia.

In 2019 Patagonia launched a PR campaign conveying that they were changing their purpose from “build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis” to “Patagonia's purpose is to save our home planet.”

A bold impact-driven statement delivered at a time when environmental awareness was reaching new peaks worldwide. 

In 2022, they intensified their use of purpose and impact when Yvon Chouinard passed his company on to a Foundation and Non-Profit organization. Both were developed to use all company profits to fund measures that would safeguard the future of our planet. 

Patagonia & Yvon Chouinard

Making big statements is what global companies generally try to do. But as an outsider, it's difficult to know how much of what is being said is actually true or has any kind of real impact.

What made Patagonia's moves so powerful is that they had always acted like a company that cared deeply about the environment.

It was also believable because Chouinard had been a rock climber and is known for his environmental activism. In addition to that, the brand's integrity and sustainability oriented culture is exemplified by how Patagonia even promotes their second hand products.

Impact is highly effective if it's authentic. True fruits did it by using glass bottles and designing them in a way that underlined their core value of transparency. Patagonia did the same by endorsing second hand sales and their founders' actions.

While purpose is something that needs to be part of every well-developed business strategy, utilizing impact should be chosen with care. If what you are already doing or what you can do carries impact, use it in your communication. If not, rely on a different strategy.

Do what you say and tell true stories about what you are doing.