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Has Purpose-Driven Marketing Become Less Relevant to Consumers?
A new study finds over 57 percent of U.S. consumers cannot name a brand that is making a difference when it comes to either the environment or diversity.
Slightly fewer, 54 percent, could not name a brand that gave back to the community, according to GfK’s first “Purpose Impact Monitor” study.
The study found that three-quarters of generic ads captured the attention of consumers. The proportion dropped to two-thirds for cause-focused ads.
“The truth today is that purpose-driven efforts and campaigns have become commonplace – even mundane,” said Eric Villain, client solutions director for Marketing Effectiveness at GfK, in a statement. “If a brand were to completely shun causes, that would likely be noticed; but supporting them is not a differentiator anymore. This means marketers and brands need to work harder – in keeping with their brand essence and the category – to really make an impression with their purpose efforts.”
Recent research from CivicScience found 73 percent of U.S. adults agree that a company’s “social consciousness and overall kindness” is either “very important” (29 percent) or “somewhat important” (44 percent) when choosing where to shop and what to buy.
The importance peaked in 2020 during the Black Lives Matter protests and the presidential election. Sentiment “softened over the past year, likely as price sensitivity and economic concerns grew.”
The socially responsible marketing consultancy Good.Must.Grow’s “Tenth Annual Conscious Consumer Spending Index” found the momentum for conscious consumerism and charitable giving surged to a record high of 51 on a scale of 100 in 2021 as the pandemic “reenergized the pursuit of purpose.” It eased to 49 in 2022.
The decline in 2022 was attributed to inflation as 46 percent of Americans said the cost of socially responsible goods and services prevented them from buying more.
“I believe this year’s data demonstrates several things, one of which is the tension involved with following through on good intentions in the face of economic pressures,” said Heath Shackleford, founder of Good.Must.Grow. “Those of us working for the growth of socially responsible brands must continue to prioritize competitive pricing.”
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Over 50 percent of US consumers cannot name a brand that is making a difference when it comes to the environment or diversity — GfK
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Consumers Grow Less Supportive of Brands Taking a Stand on Social & Political Issues — CivicScience
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Declining Purchasing Power Slows Momentum for Purposeful Shopping According to Tenth Annual Conscious Consumer Spending Index — 3BL Media
Discussion Questions
DISCUSSION QUESTIONS: Has purpose-based marketing become less relevant amid macroeconomic pressures? What fresh approaches may be required to break through?
Poll
Loading …BrainTrust
John Lietsch
Chief Operating Officer, Bloo Kanoo
Lee Peterson
EVP Thought Leadership, Marketing, WD Partners
According to the reciprocal observation, 43 percent of consumers notice companies that “do the right thing” in their business practices. I think that’s a pretty good number.
To use “greenwashing” as an example, I would draw a clear distinction between companies who see doing the right thing as a marketing opportunity and those who do the right thing as part of their business practices. Shame on the latter.
Walmart is an excellent example of a company that has made significant changes in the last several years to do better for the teams, adopt policies that reduce waste, and lower their environmental impact. It is just what they’re doing. Are they touting it in the press? Not overly so. Are these policies moving the needle at Walmart? Maybe a wee bit. Are they contributing to Walmart’s overall strategies around sustainability and long-term growth? Absolutely. And the good news is almost half of the consumers today see that as important and will reward them for it.
You nailed it Gary! Companies need to stand for something everyday and regularly communicate what and how they are becoming a more responsible and purpose driven company, not just during a marketing campaign. I would be less inclined to unsubscribe fro email marketing campaigns if they sounded more like the emails startups send to their customers on a monthly basis that talk about the company, new hires, improvements, changes, and exciting new customers or innovation. Consumers are savvy and see the greenwashing!
You know what? Most “causes” today, like inclusivity or the environment, are table stakes. Stop talking about any of them as if you’re something special. As Nike used to say, Just Do It and let’s get on with taking care of the customer.
Purpose-driven marketing is not dead, but taking a dip due to economic pressures and overuse. Starbucks on Capitol Hill this week didn’t come off too well. In other words, you can’t sell a gazillion cups of coffee in disposable cups, use every trick in the book to block unionization, and also claim you’re saving the planet. What you can do is treat every staff member and customer with respect.
Long story short, just saying “We’re good, like us…” doesn’t work any more. A better approach these days might be practice what you preach, and make it obvious to your customers. But don’t put it in your ads.
Compared to 2021, value for money now overshadows purpose-based marketing. Overall, sustainability and diversity have taken a back seat to affordability.
Exceptions like Fenty Beauty prove that targeting underserved markets can keep brands in-demand in any economy.
Purpose is wonderful but it’s expensive and often insincere. It will be more relevant when it becomes an indistinguishably natural part of the product and not just part of another marketing campaign.
If the measure of less relevance has dropped from a record high of 51 in 2021 to 49 in 2022, I’d say we are looking at the same number. If you want to put relevance on the “49” recognize that it is a hiccup below a record high.
Cause marketing is not an advertising tool. As an ad, it feels like the equivalent of “greenwashing.” Cause support, in most cases, is a PR tool. Going one step further, it is a company tool–not a brand tool.
Sponsor the Breast Cancer 5K, don’t make an ad telling folks you support the cause and how important it is. Few companies are given the opportunity to support a reason, as Nike was given with Colin Kaepernick or U.S. Women’s Soccer. But even those had vast amounts of publicity before Nike signed on.
I’m not sure that purpose-based marketing was ever that relevant. Not to say companies shouldn’t do it, and recognizing that if you ask shoppers how important it is they all say it’s important–consumer spending has never followed green or social purpose initiatives. Should your website have this information prominently displayed? Of course, because it’s free and (usually) can’t hurt. Should you spend money advertising it? No, because that’s not why people buy your product or shop in your store (maybe Bombas is the exception).
When consumers’ wallets shrink, so does the disposable income to spend on higher priced, purpose-driven brands. Consumers may fully agree with socially conscious products, but reality rules, and if the price points are higher than other second tier brands or private label products, they’re going to purchase cheaper products. Marketers will have to get creative with their purpose-led investments so as not to price themselves out of the market.
I am not sure it was “ever” really important when it came down to the retail “moment of truth”–when someone actually spends money on something. The product quality, price, etc., that is what matters.
I believe consumers are aware of which companies are actually doing something wonderful outside of offering a product, and which companies are simply “massaging their messaging” to fit the narrative.
Here is an example that works: a local lunch shop here in Raleigh offers at-risk women job opportunities. I think this is marvelous, and I love giving them my lunch business. And–the food is great. If the food were average I might go there–but not often. So combine a good cause with a great product or service–and you have a winner. “Virtue signal” your good deeds while not focusing on your customers–and you have a loser.
The numbers are a bit surprising. Are shoppers getting immune or finding/seeing that social cause-based campaigns are not sincere and therefore don’t deserve the loyalty, consequently opting to shop for deals during tough economic times? That is worth contemplating.
Since marketing plans need diversity, advertising with a purposeful message is an excellent way to remind and capture those people interested in a cause. But use caution — we live in a hyper-self-interested country, and ignoring those looking for products and services that will “better” them is perilous.
In today’s polarized environment, it’s a double-edged sword. Not every brand is a culture brand and “jobs to be done” brands should tread lightly.
Purpose-based marketing may not be as effective, but that doesn’t mean a company or brand with a cause or community “give-back” program isn’t appreciated by its customers. Each year we do consumer research and survey more than 1,000 American consumers weighted to the US Census. Here are some findings for 2023 (surveyed in January):
— 43% of consumers feel it’s important for a company to have a social cause that is important to them. Only 24% say it’s not important. GenZ drives that number with 53% saying it’s important versus Boomers at 29%.
— 43% of consumers would be willing to pay more if the company or brand had a social cause that was important to them. Again, GenZ drives that number higher (60%) versus Boomers (27%).
So, it’s not that a cause is not important. It’s how a company or brand is marketing and communicates its support for the cause.
At a macro level it may be that this is becoming commonplace or less of a differentiator. I’d like to see this data segmented. If we asked those facing the most pressure economically if purpose makes a difference it’s likely the answer might be very different from others who have more resources or who are committed to certain causes, and messaging about those things more important to them.
The purpose-driven marketing had become popular that it can sometimes feel like a gimmick. Some brands may use social or environmental issues to sell products without actually making any meaningful impact. This can lead to consumer fatigue and a lack of trust in purpose-driven marketing as a whole.
Purpose-driven marketing is still relevant to many consumers, but it is not a silver bullet. Brands that want to connect with consumers on a deeper level need to ensure that their commitment to social and environmental issues is genuine and long-term.
One example of the successful purpose-driven marketing in 2022 is the “Climate Pledge” campaign by Amazon. Other brands that have embraced purpose-driven marketing in recent years are Patagonia, Toms, Dove, The Body Shop, Nike, Adidas, Coca-cola, Warby Parker, Airbnb and Ikea.
To break through or re-engage consumer in purpose-driven marketing, brands may need to take fresh approaches that go beyond traditional methods. Here are a few potential approaches such as Authenticity, Co-creation, Personalization, Story-telling, Innovation.
If done right, purpose-driven marketing can be a powerful tool for brands looking to differentiate themselves and build meaningful connections with consumers.
Good points, Ahsen. Purpose-driven marketing must be authentic and coherent with how the company engages customers and partners in its ecosystem. That’s why for some, Amazon’s Climate Pledge rings hollow (the cynic says it’s just cost-cutting and inconsistent with how employees are treated). In contrast, Patagonia walked the talk and lived its purpose.
Combining the terms “purpose-driven” and “marketing” always makes me a little queasy.
Not that companies should neglect to make consumers aware of their sustainability and socially enlightened actions. It is more than OK with me when a company flexes its economic power to make the world a little cleaner and people’s lives a little better.
But the public can smell contrived “corporate social responsibility” messages from a mile away. And using purpose-driven marketing as a tactic to justify a luxury price point is reprehensible. When corporations assign a sliver of spending to CSR messaging it tends to be disconnected from the rest of the business, creating cognitive dissonance.
I would counsel any company to emphasize trustworthiness as its foundational value. Law-abiding practices, good stewardship of the planet, philanthropy and human compassion naturally flow from this.
Do a lot. Say a little.
Byron Sharp observed despite Ben and Jerry’s being the best at using profits for purpose, if we stop someone on the street the best they’ll remember is they make Cherry Garcia. Purpose based marketing has never been a viable strategy and never will be.
I teach my students the first obligation in marketing is to sell good products so that people value them upon purchase. Our second obligation is to run a good profitable company which treats employees, vendors, communities, distributors, customers, society, and investors well. Should we have money left over, go ahead and do something purposeful with it but don’t use it as a marketing strategy.
Part of the problem is new have lost the narrative — that making and selling ice cream business IS a tremendous purpose. Employees and customers want companies who follow those purposes — not fantasies about do-gooding.
Simply put, I define purpose-driven marketing, a problematic term on its own, as highlighting and amplifying the “why” behind the company and brand. It is not less relevant, but consumers can easily detect an insincere campaign that is incoherent with other company decisions and behavior. Purpose is a mighty double-sided sword that must be used appropriately.