Purpose certainly looks and feels like a buzzword, given its prolific and often frivolous use in recent years, but should we dismiss it so quickly? Well, in my opinion buzzwords lack substance – they are merely words on a page or banter in a boardroom that make people feel like they are relevant and progressive (two more buzzwords for you). The question is, does Purpose fall into this category?
The difference lies in one very simple premise – is it just what you say, or does it describe what you do and why you do it? If it describes why your business gets out of bed every day, then it has all the hallmarks of a good business strategy. Let me explain why.
First, some of the most successful companies and brands in the world, credit their enduring performance with being purpose-driven. From Cadbury, Nike and Dove to more recently the likes of Patagonia and Thank you, all of these brands have won the hearts and wallets of their customers through being purpose-driven.
Secondly (for the data nuts out there) the numbers really stack up when it comes to putting purpose before profit:
• Customers are 4x more likely to purchase from a purpose-driven brand
• They are 6x more likely to protect your brand in a challenging moment
• It makes customers 4.5x more likely to recommend your brand
• Over 4x more likely to trust your brand
Then there’s the added bonus of staff loyalty. Millennials (who are quickly making up the largest percentage of the global workforce) are 5.3x more likely to stay with your organisation if they feel a strong connection with your purpose.
And finally, it seems to have graduated from the marketing department to the boardroom with 79% of business leaders believing that an organisation’s Purpose is central to business success. The Australian Institute of Company Directors also recently validated this point stating ‘that delivering long-term returns is inextricably and positively linked to having a clear set of company values and purpose’
So, what’s the difference between Purpose being a buzzword versus being a powerful business strategy that can drive the long-term growth of a business? After extensive analysis of some of the world’s leading brands and working directly with a few of them, I have found they have four common ingredients to their purpose:
1. Their purpose is reflected in the DNA of their business.
Customers can sniff insincerity from a mile away. Purpose must be authentic and credible.
2. Their purpose reflects a challenger stance for their industry.
Even market leading companies such as Nike wear their purpose and values on their sleeve and seek to stand for something, so they can stand out!
3. It leverages the core strength and capability of the business or its competitive advantage.
Whether it be customer inspired, operational excellence or product leadership, it underpins the delivery of their purpose.
4. Finally, their purpose addresses a customer or cultural challenge that people really care about.
It can be as simple as making something easy that has been traditionally hard for consumers to do or as big as saving the planet. This motivates both staff and customers alike to be loyal to the business, as they feel they are part of making a difference.
If a business can focus and define all of these key elements as the foundation of their Purpose, then they have the building blocks for much more than a goosebump worthy brand manifesto. This is where it becomes a sustainable business strategy that ensures your Purpose is not only seamlessly reflected in your customer experience, but also compels loyalty from staff and customers alike and ultimately drives the future growth of your business.
If you are interested in defining a compelling Purpose for your business, that ticks all the boxes of being authentic, distinctive, relevant and motivating, then check out my online course Define your Purpose. The course is a simple step by step guide for tapping into the ‘Power of Purpose’ for your business.