HOW PURPOSE PAYS BACK.

PROVING THE POWER OF PURPOSE FOR BUSINESS AND BEYOND.

PURPOSE SHOULD BE THE MEASUREMENT OF WHO WE ARE

Purpose has become the blanket term for business as a force for good, and is now a mainstay of brand strategy in the 21st Century.

But if it is to retain its prominence amongst CEOs, CMOs and Corporate Affairs the business case for Purpose needs to be just as strong as the moral one. And without measuring impact against social and commercial proxies, purpose risks becoming a red herring.

This report uses landmark case studies and the growing body of research to illustrate how Purpose can be effective for business and beyond.

But not everything that matters can be measured. And not everything we can measure matters. Which is why we will also share models that can be adopted to measure the societal and commercial effectiveness of any purpose-driven activity.

THE EVOLUTION OF PURPOSE

Purpose has evolved from the antithesis of free market values to the driving force behind some of the world’s most successful businesses.

Milton Friedman states that for a company to pursue anything other than profit would be “pure and unadulterated socialism.”

John Elkington invents the Triple Bottom Line, a framework for balancing profit and purpose. Spawning dozens of corporate models like it.

After consumer confidence is shaken, a new corporate worldview emerges based on the principles of purpose, inclusion and sustainability.

Purpose moves out of the shadows of CSR to be at the very forefront of brand marketing, with 50% of Cannes Lion awards going to purpose campaigns.

Danone North America passes the rigorous assessment to become the world’s biggest B Corporation, laying down the gauntlet for other multinationals to follow suit.

The CEOs of 200 companies come together at The Business Roundtable to agree that shareholder value is no longer their main objective.

SHAREHOLDER PRIMACY - 1970

TRIPLE BOTTOM LINE - 1994

THE FINANCIAL CRASH - 2008

CAUSES-LED CANNES - 2017

B CORPS GO BIG - 2018

ACTIVIST CEOS - 2019

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PEOPLE01

A look at how purpose pays back for the three most important stakeholders of any successful business: consumers, employees and shareholders.

PERFORMANCE 02

An exploration of how purpose pays back for business performance irrespective of whether it’s a giant corporation or a small challenger.

PROXIES03

An examination of how corporation’s assess their action as well as commercial and societal models to measure any purpose-driven activity against.

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HOW PURPOSE PAYS BACK

It’s clear that people today want to work for, buy from, and invest in businesses they believe in.

So when companies live by, and activate off their purpose in a compelling way, they appeal to the three stakeholders that are pivotal for any business to grow: the consumer, the employee and the shareholder.

PEOPLE01

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THE CONSCIOUS CONSUMER

After the 2008 financial crash and decades of climate inaction, consumers increasingly expect businesses to fill the leadership vacuum in society. In fact, consumers now trust businesses more than governments (Edelman’s 2018 Trust Barometer), with 78% believing that they should be addressing issues important to society. And unlike with governments, the purchasing power of consumers will ultimately dictate how businesses behave.

Don’t expect loyalty if you don’t support the causes of your consumer. In fact, 66% would switch from a product they typically buy, to a new product from a purpose-driven company. This goes up to a whopping 91% for Millennials.

The positive impact you make matters to people. Over a period of 12 years, the brands with the highest perceived positive impact amongst consumers had a brand value growth of 175%, versus just 70% for those with low positive impact.

When your brand stands for something, you mean so much more to people. 64% of consumers are more likely to advocate for a brand’s stand than its product features.

The perceived value of your brand clearly sky-rockets when you prioritise purpose. We know 66% consumers will pay more for products and services from brands that are committed to making a positive social impact.

LOYALTY IS EARNED IMPACT MATTERS TAKE A STAND PREMIUM ON PURPOSE

HOW PURPOSE PAYS BACK PEOPLE 6 ER

THE ENGAGED EMPLOYEE

To a new wave of workers, purpose matters more than pay check. According to LinkedIn, 86% of millennials would take a pay cut to work at a company whose mission and values align with their own. Clearly a company’s sense of purpose has a halo effect on its people, who now more than ever before want to make a difference through their day job.

Companies risk missing out on the best talent if they can’t prove they take purpose seriously. 64% of Millennials won’t take a job if their employer doesn’t have a strong CSR policy.

It’s an obvious point but good people want to stick around at businesses that let them make a difference. As a result, purpose-driven companies enjoy 40% higher levels of retention than their competitors.

Employees work harder, better and faster for businesses they believe in. According to Deloitte, purpose-driven companies report 30% higher levels of innovation. And turnover increased by 57% in the employee group most deeply connected to their companies’ purpose.

ATTRACT THE BEST KEEP GOOD PEOPLE HARDER. BETTER. FASTER

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THE SATISFIED SHAREHOLDER

The link between purpose and profit has been proven beyond reasonable doubt. A Harvard Business Review 8-year study of high-growth businesses named purpose as a vital driver of growth, as important as creating new markets, for ultimately satisfying shareholders.

Purposeful brands represent a wise long-term investment. Over the past 12 years they’ve experienced a valuation increase of 175% versus the median growth of 86%, found Kantar Consulting.

Instilling purpose into corporate culture so it informs decision-making, and employees live and breathe it, ultimately pays dividends for shareholders, with the businesses who effectively did so outperforming the stock market by 206% between 2006 and 2016 according to Havas.

The next generation invests with their ideals. 77% of millennials cite environmental, social and governance (ESG) investing as their top investment priority. While 84% of Gen-Z investors are either already invested in socially responsible or impact investments, or plan to invest that way in the future.

THE SAFEST BET INSTIL TO OUTPERFORM INVESTORS WITH IDEALS

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HOW PURPOSE PAYS BACK

Businesses of any size can deploy purpose to power their performance. In this section we explore how purpose executed right pays off as much for giant corporations and well established brands as it does for ambitious challengers.

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FUTURE-PROOFING THE PORTFOLIO

For global corporations, purpose is an effective strategy for future-proofing a portfolio of brands with varying degrees of maturity and market penetration.

There is no better example of this than Unilever, whose Sustainable Living Brands grew 69% faster than the rest of the business in 2018; delivering 75% of their overall growth. With CEO, Alan Jope, recently going on record to say that “the brands that don’t stand for something will be disposed of.”

And in the next few years, 80% of Unilever’s global turnover is projected to come from these purpose-driven brands.

Contrast this with Kraft Heinz, who in 2019 had $15bn written off their valuation, and you see a portfolio of brands that has failed to move with the times in prioritising purpose.

Whereas Unilever successfully reinvigorated heritage brands like Ben & Jerry’s through purpose, Kraft Heinz have stuck to the old school playbook and subsequently seen some of their biggest brands lose relevance to a new generation of socially-conscious consumers.

THE PURPOSEFUL GIANT THE PRICE OF STANDING STILL

“I DON’T THINK KRAFT HEINZ ARE NEARLY AS ACTIVE ON THE PURPOSE-DRIVEN TRACK. I THINK THAT COST THEM BIG.” Michael Cammarata, Chief Executive of Schmidt’s Naturals.

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LONG-TERM BRAND BUILDING

The Campaign for Real Beauty is one of the best examples of long-term brand building. The steady drumbeat of work over 20 years has helped broaden the narrow definition of beauty in culture, and build a strong emotional connection with its loyal female audience.

Mark Ritson has explored how Dove executed purpose to perfection for their long-term strategy; delivering $4.42 in incremental revenue for every 1$ spent on the campaign.

The idea behind Small Business Saturday was to claim a day to support small businesses. But it wasn’t purely altruistic: AMEX had established itself as the leading small business credit card user in the U.S. and saw an opportunity to build an emotional connection with local merchants.

The action snowballed into a movement and national holiday - giving consumers a reason to Shop Small every year, generating $50 Billion for small businesses, and increasing AMEX’s brand favourability among merchants by 92%.

DOVE REDEFINE BEAUTYAMEX SHORE UP BASE

“WE’VE BEEN DOING THIS FOR EIGHT YEARS AND THE INVESTMENTS WE PUT ON PURPOSE MIRRORS THE GROWTH OF DOVE. THERE WASN’T A SINGLE YEAR WHERE DOVE DECLINED IN PROFITS” Dinara Bekmansurova, Dove, Global Senior Band Director.

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LEVERAGE THE CHALLENGER MINDSET

In a category where market leaders, Always and Tampax, traditionally focused on boosting female confidence, Bodyform’s #BloodNormal challenger approach was to defy convention and reflect the reality of periods for the first time.

“WE HAD TO FIND A WAY TO PUNCH ABOVE OUR WEIGHT IF WE WERE TO HAVE ANY CHANCE OF SURVIVING.” Cannes Creative Lions Paper.

Bodyform’s market share grew by 1.4%, leapfrogging Tampax to steal second place. And for a £233k media spend, the campaign reached a whopping 800m people - which is an earned media value of £3.2m.

U.S. Retailer REI exists to help people enjoy the outdoors and believe a life outside is a life well lived. So to stand out in a crowded market, they took a stand against the consumer chaos of Black Friday. Closing their doors and paying their 13,000+ strong staff to #OptOutside instead. Then the unexpected happened: over 170 organisations and 1.4 million consumers joined them in solidarity. Not only did REI’s revenues go up double digits year on year as a result, applications to work for REI shot up 92%.

#BLOODNORMAL EARNED THEIR STRIPES

#OPTOUTSIDE TO DRIVE PEOPLE INSIDE

One of today’s most effective challenger strategies for eating the big fish in a category is to pick a fight that resonates with your consumer and creates a positive sense of differentiation around your brand.

“WE HAD TO FIND A WAY TO PUNCH ABOVE OUR WEIGHT IF WE WERE TO HAVE ANY CHANCE OF SURVIVING.” Cannes Creative Lions Paper.

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STIRRING THE EMOTIONS

For 30 years, Always had been championing girls’ confidence by educating them during the critical time of puberty, but no one really knew about it. That soon changed with #LikeAGirl.

Based on the insight that many girls lose their confidence once puberty hits, the advert drew attention to society’s role in propagating this, and flipped the common playground insult to mean all the amazing things girls can achieve.

It became the most watched video in P&G history with 76 millions views and saw Always’ purchase intent soar by 20%.

When Colin Kaepernick said “believe in something, even if it means sacrificing everything.” in Nike’s 2018 Dream Crazy ad he could have been talking directly to brand managers.

Gone was the era of brands sitting on the sidelines, exemplified by Michael Jordan’s famous statement in the 90s that “Republicans buy shoes too”.

The stirring spot was a tacit endorsement of Kaepernick’s national anthem protest against U.S. police brutality. And while it resulted in a sneaker burning backlash, Nike were rewarded with a 31% sales increase for standing on the right side of history.

#LIKEAGIRL #DREAMCRAZYWhen it comes to commercial video, a study of both Unruly and YouTube data shows that content built around Purpose drives both higher shares and views. The same goes for delivering emotion when you look at data over the same period from Brainjuicer (2016-2018).

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APPEAL TO A GENERATION’S ZEAL

If you want proof that purpose is here to stay, look not further than the next wave of consumers, Generation Z. At 2.5 billion, they’re the largest group on the planet. And in a few years, they’ll make up the majority of the world’s consumers. Often dubbed the socially conscious generation, soon their beliefs and causes will dictate how company’s engage with them.

We only need to look at the lineup of Gen Z poster kids, all united by a desire to change the world, to see the power of youth activism. As consumers, they put their money where their values are, with 68% expecting brands to contribute to society, and 84% stating that they are more likely to buy from a brand that supports a social cause.

The climate crisis is the defining issue of their time, and as a generation they’ve resolved to fight for their future. But in the absence of government action, they expect companies to join the good fight, with 90% believing brands must drive action on environmental issues. The businesses who offer real solutions - beyond simply offsetting their footprint - will surely secure their legacy for a generation.

THE NEXT CONSUMER ACTIVISTS AT HEART FIGHT FOR THEIR FUTURE

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HOW PURPOSE PAYS BACK

The cynicism from some quarters about the effectiveness of purpose is partly a failure of measurement.

Without proof, purpose is just philosophy that’s easy to ignore or write off as a “nice to have”.

So from the outset, brands taking action need to make sure proxies that point to both Impact on Investment and Return on Investment are baked into the process.

The following section looks at the different ways corporations assess their action as well as providing robust models to measure any purpose-driven activity against.

PROXIES03

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ASSESSING YOUR ACTION

Consistent frameworks allow business to quickly convey where they are making an impact. Most widely adopted over the past 10 years has been the UN's 17 Sustainable Development Goals (SDGs) supported by the SDG action manager tool which allows companies to set goals, track progress, and accelerate action towards achieving the SDGs.

Third party certifications provide a universal standard of measurement that helps hold companies to account. B Corp was set up to challenge shareholder primacy by mandating the balancing of purpose and profit. Around 3,234 companies are now certified (including Revolt) - dedicated to be not just “best in the world,” but “best for the world.”

FRAMEWORKS ACCREDITATIONS

Introduced in 1994, the Triple Bottom Line referenced a company’s social, environment and economic impact. But for purpose to be prioritised, it needs to move from an abstract philosophy to a means of measurement. Businesses like Mars and Unilever have built bespoke measuring models to do this along the original TBL principles.

AUDITS

The demand for transparency has spawned many sustainability reporting providers over the years, who exist to help company’s make better decision-making and to disclose the true impact of operation. The sheer choice on offer, from Global Reporting Initiative (GRI) to Sustainability Accounting Standards Board (SASB), risks reporting fatigue, although providers agree with the need for a unified approach.

REPORTS

There are four broad categories of assessment. But none of which are mutually exclusive; those companies further down their Purpose journey are likely to adopt a combination of all four.

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IMPACT ON INVESTMENT

INPUTS ACTIVITIES OUTPUTS IMPACT

RESOURCES INVESTED CONCRETE ACTIONS TANGIBLE RESULTS OF ACTIVITIES

THE IMPACT RESULTING FROM THESE ACTIVITIES

Input the hard costs that you can measure internally of the activity.

€ investedNumber of peopleTime committed etc.

A global cause programmeA partnership with an NGOA behaviour change campaign etc.

Number of impressions of contentNumber of projects deliveredNumber of participants etc.

Number of lives changed% increase in behaviour changeActions taken etc.

Explain the main focus of the activity you’re launching.

Explain what outputs you achieved, looking at your own brand or company.

This is the impact measurement. Look at how you changed the world for the better.

Many brands are in the rhythm of measuring their commercial impact, however 60% of award-winning purpose campaigns do not measure their societal impact. And without evidence of bettering the world, they open themselves up to accusations of corporate greenwashing. This handy IOI model helps brand’s measure the true societal impact of any action they take.

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RETURN ON INVESTMENT

As we explored in the People chapter, purpose-driven marketing can be as beneficial for engaging employees inside the business as it can be for attracting consumers outside it.

Therefore we recommend using both internal and external KPIs to measure the true ROI of any purpose-driven activity.

EXTERNAL KPIS

INTERNAL KPIS

ATTITUDINAL

ENGAGEMENTE.G. Internal reach, staff sign-ups, staff sharing rates

ENGAGEMENTE.G. Campaign reach, campaign views / shares / comments, campaign pr coverage, earned media

ATTITUDINALE.G. Staff pride in the brand, staff retention, staff sense of purpose

E.G. Brand metrics amongst audience (brand love, top of mind awareness, etc) and attitudinal metrics amongst people you are helping

BEHAVIOURALE.G. Market adoption, staff participation, staff content generation

BEHAVIOURALE.G. Audience participation, people helped through the campaign, donations, signatures

BUSINESSE.G. Market share, penetration, profit margin, distribution, staff churn, sales, brand valuation

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HOW PURPOSE PAYS BACK

TAKEOUTSFROM A ‘NICE TO HAVE’ TO A NECESSITY

PURPOSE IS MULTI-PURPOSE

THE PROOF IS IN THE PROXIES

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02

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Purpose has moved out of the shadows of CSR to become an essential tenet of corporate strategy. Those who don’t prioritise purpose risk losing relevance to a new generation of consumers who put their wallets where their values are. Simply put, to stand still on the sidelines is to hurt your own bottom line.

No matter the life stage or size of your business, purpose activated right can help you grow. Whether its future-proofing a portfolio, shoring up your market share stronghold or challenging the big fish in your category; there’s an effective purpose-driven strategy your business can implement.

Companies who don’t measure their purpose-driven activities against IOI and ROI proxies risk a consumer and shareholder backlash when they can’t prove its dual impact. Use our models as a handy guide when planning your next purpose campaign.

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PURPOSE- BASED AUDIT

We can conduct a holistic audit of your purpose-driven business through the below steps. Identifying the areas for optimisation, with the objective of accelerating your purpose journey.

A strategic view of how you understand and prove that purpose has impacted the business and society positively? Including measuring models to analyse tangible outcomes such as Return On Investment (ROI) and Impact on Investment (IOI)?

PURPOSE-BASED IMPACT

STEP 3STEP 2STEP 1

A strategic view of the efficacy and suitability of your purpose-based connections. This includes communications as a whole, advertising, packaging, and the overarching customer experience.

PURPOSE-BASED CONNECTIONS.

A strategic view of the purpose-based actions you take in and outside the business. What's in place, beyond the essentials of the business or brand function, that demonstrates your commitment to people and planet (as well as profit).

PURPOSE-BASED ACTIONS

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Revolt is an independent purpose consultancy that harnesses the power of branding to create real change in the world. We believe the most successful brands of tomorrow will be the ones that brand the change they want to see in the world today. Whether that brand is one of the world’s biggest corporates, or one we’re starting ourselves from scratch. Revolt has offices in London and New York.

Contact: peterb@revoltlondon.com

revoltlondon.com