Our first article in this series covered the ever-changing nature of customer relationships. Many factors influence how a customer may choose to behave on a given day, but there are also certain trends that may impact their decision. The first is purpose. Consumers now expect organisations to take a stand on the social, cultural and environmental issues that they care about the most.
What do we mean by purpose?
Purpose has become increasingly valued of late. But what makes it more critical than, say, an organisation’s mission or values? Purpose articulates the positive impact an organisation has on society, bringing internal identity to the outside world. Done well, people not only mention the products that a company sells or its celebrity founders but its role in wider society.
It’s important to clearly define and communicate your purpose. Recent research has shown that the majority of customers are four times more likely to purchase from a company that has a strong purpose, six times more likely to protect the company in the event of a misstep or public criticism, and four-and-a-half times more likely to champion the brand and recommend it to friends and family.1
Once a purpose is defined, it’s important that an organisation’s strategy and customer experiences align around this. How consumers are made aware of purpose and the actions they take to live up to it are just as important as how purpose is articulated in the first place. For example, Airbnb recently committed to providing free housing for 20,000 Afghan refugees to help with their resettlement. This clearly matches their purpose of an inclusive global community and builds on nearly ten years of providing emergency accommodation in times of crisis.
Due to its very nature of addressing complex issues, purpose can seem exploitative and misleading, especially when it becomes disconnected from day-to-day business activities. So how can organisations ensure their purpose is both genuine and relevant to consumers?
The elements of purpose
For your purpose to remain relevant to your customers, there are three core elements to consider.
- Community: Have a positive impact on the communities you serve, beyond simply creating local jobs.
- Colleague: Be a company that understands its employees, cares about what they think, and aligns with their values.
- Brand: Build trust and embody products and services that go beyond delivering great experiences.
Community: The world we live in
Customers want to see that organisations live in the same world that they do, with the same challenges posed by social movements or environmental considerations. Organisations that aren’t genuine in their purpose are quickly being found out, like some in the fashion industry.
‘Greenwashing’ practices are coming under increasing scrutiny in the fashion industry. In response, clothing brands Patagonia and Everlane have become increasingly transparent with their consumers, telling the story of their supply chain to an invested audience via their websites. Supply chain transparency addresses the environmental impact, but consumers are also interested in the people making their clothes.
Earlier this year, Chinese fast fashion retailer Shein falsely claimed to be SA8000 certified, an internal standard that recognises fair labour practices. The statement was retracted from its website when Social Accountability International (SAI), which created the standard, confirmed Shein was never certified. This serves as a good example that purpose cannot be stated arbitrarily and without action to back it up.
Recognising and responding to world issues does not require a trade-off with creating memorable experiences for individual customers. For example, eyewear company Warby Parker creates a meaningful interaction between the customer and the community through their ‘buy a pair, give a pair programme.’ Warby Parker emphasises how their products can impact wider socio-economic trends, such as increasing monthly income in emerging markets.
Colleagues: The people we interact with
The events of the past year have caused many people to reassess what is truly important to them. Health and welfare have taken centre-stage, with employees placing greater demands on not just their own employers, but also on the businesses where they shop, in support of the welfare of the employees who work there.
The spotlight on health and wellness in the workplace and new UK legislation for bereaved parents has seen some organisations introduce new policies. For example, Channel 4 and the banking app Monzo have launched new leave policies for those who have suffered a miscarriage.
Nearly a third (29%) of customers surveyed for a recent study said how a company treats its employees is the most important factor in deciding where to become a loyal customer. Around the same number (27%) said how a company treats its employees is also a deciding factor in choosing whether to try a brand in the first place.2 There is a growing awareness among first-time and longstanding customers of how staff that we interact with are treated by their employer – and this only looks to be gaining momentum. In Spain, for instance, the chambermaid’s union is crowdfunding for a new application that would allow tourists to book hotels based on reviews of staff working conditions, alongside good facilities and location.
Meaningful interactions with employees can impact customers and company reputation. Nike has given all staff at its corporate headquarters time off to prioritise mental health following the pandemic, stating: “It’s not just a ‘week off’ for the team… it’s an acknowledgement that we can prioritize mental health and still get work done.”3 Nike’s commitment to mental health builds on its public support of Nike athlete Naomi Osaka’s withdrawal from the 2021 French Open and amplifies the brand’s reputation as a human-centric brand.
Brand: The companies we know and trust
Brands need to stand out from their competitors, and this can be achieved through purpose. It is estimated that the average person will see between 6,000 to 10,000 ads every day4; how can we filter through the noise to find a purpose that resonates with us as individuals? The 2021 Havas meaningful brands report surveyed 395,000 global consumers and found that 75% of brands could disappear without people caring. The key difference when it came to brands in the top quartile, those we simply can’t live without, is a meaningful purpose. In the same survey, participants stated that 73% of brands must now act for the good of society.5
How we might arrive at this type of brand positioning is complex. But a good place to start is by building trust. Those irreplaceable brands have won us over by demonstrating that they are worth more to us than just providing a great product or service. And when those brands do mess up, we are most likely to forgive them if we believe they are well intended.
When we look at the companies consistently topping the lists of our most trusted brands, many of the names aren’t a surprise: Adidas, Microsoft, The Bosch Group, The Lego Group. The staying power of these brands has been consistent customer service, reliable product delivery, and somehow overcoming the assumption that they are just looking to make money.
An interesting and regularly featured brand is US motorcycle company Harley-Davidson. Consumer reviews suggest that Harley-Davidsons aren’t necessarily the best built bike in the market. Instead, their customer following comes from the lifestyle they project, namely an adventurous spirit and freedom of the open road. Most importantly, purchasing a bike allows access to local clubs, invitations to national and international events, and a loyalty programme that creates a brand community bigger than the bike.
Purpose goes awry: Misunderstanding the needs of your customers
So what happens when purpose goes wrong? There are plenty of examples of customers taking a stand when an organisation’s actions conflict with its purpose across these three areas.
The recent ‘European Super League’ backlash within football speaks to the repercussions of acting without listening to the wishes of the fan base and the power of our first core element: community. 89% of top team fans believed the move was motivated by money, and the idea was widely criticised for threatened the community benefits that existing football leagues had built over the previous century. The episode showed how purpose is not simply a one-way dialogue, and that customers continually influence an organisation’s purpose.
But however important purpose has proven to be, we know there are brands that still succeed after things go awry. So why is this?
Historically, purpose has often been trumped by the experience delivered. While customers have a desire for companies with a purpose aligned to their own, this has not always impacted purchasing decisions. A 2019 survey found that 65% of consumers want to purchase sustainable brands, but only 26% followed through.6 Recent research has shown that convenience still wins as the major factor in purchasing decisions, building on customer expectations of frictionless checkout and favourable delivery options that only intensified in the pandemic. Nowhere is this more evident than the continued growth of Amazon against a public reckoning of employee mistreatment.7
Still, post-pandemic behaviours have begun to shift as social issues come to the fore. By October 2020, 36% of Brits said they were buying products from companies with strong environmental credentials. The balance is shifting towards purposeful brands, as over half of those surveyed said the environmental credentials of a product or service are just as important as price. This has been demonstrated by a sustained rise in eco-friendly products over recent years. Dairy-free milk brand Oatly’s entrance onto the stock market earlier this year has been partly attributed to its strong branding, which directly addresses the environmental impact of dairy alternatives.
Embedding purpose in your organisation
To avoid your purpose becoming empty words, it needs to be present in the communities that consumers live in, among the colleagues they interact with, and the brand you portray. Embedding purpose in these key areas ensures relevance to the customer’s own sense of self and is a key ingredient in building meaningful relationships.
In our first article, we explored the ever-changing dynamic of customer relationships. The evidence is clear that as consumers, we are increasingly looking for an organisation’s purpose to match with our own in the relationships we form. Other factors can still compete with and override our purchasing decisions, but more than ever, we as consumers make choices based on a combination of factors, the balance of which is continually changing. The intersection of purpose with experience can provide a strong influence in how consumers make their purchasing decisions.
The remaining two articles of our four-part series will explore this further, including how to:
- design memorable and enduring experiences for your customers
- combine both purpose and memorable experiences to create truly meaningful customer relationships
1 Unveiling the 2020 Zeno strength of purpose study | Zeno
2 Customers are factoring employee treatment into buying decisions | CMS Wire
3 Nike is giving its head office staff a week’s break | BBC News
4 How many ads do we see a day in 2021 | PPC Protect
5 Havas’ meaningful brands report 2021 finds we are entering the age of cynicism | Havas Group
6 The Elusive Green Consumer | HBR
7 Amazon’s great labor awakening | The New York Times
At Gate One, we believe there are some unifying principles that create a truly memorable customer experience. Get in touch to see how we can help you navigate your next customer experience challenge.