Purpose-driven marketing: Brands’ secret sauce for loyalty and impact

Modern-day consumers demand that brands align with social causes and ethical values. As a result, purpose-driven marketing has emerged as a pivotal strategy for brands to gain sustainable competitive advantage.

This approach fosters long-term customer loyalty and corporate differentiation. Brands like Patagonia and Dove have successfully implemented this model by embedding authenticity into their brand value systems.

However, crafting a purpose-driven marketing strategy is no easy feat. It involves addressing challenges such as authenticity, transparency, and consistent implementation.

Looking ahead, brands must continue to adapt by creating meaningful societal impact to stay relevant and achieve long-term success.

Analysing the evolution
The phenomenon of purpose-driven marketing is not new but has gained high momentum in recent years, particularly as consumers have become more value-driven. The shift started to materialise after the Business Roundtable’s 2019 statement, in which 181 CEOs of the largest US companies pledged to migrate from shareholder-centric models to more inclusive business strategies, focusing on customers, employees, suppliers, and communities alike.

Globally, brands like Patagonia have set benchmarks in how a purpose-driven strategy can align perfectly with business goals. Patagonia’s environmental sustainability campaigns, such as the 2015 #CrudeAwakening initiative, are great examples of how purpose can catalyse real-world change and build brand loyalty. Its pledge to donate 1% of sales to environmental causes has made its products synonymous with the purpose they serve.

The financial success of purpose-driven brands can be seen in other companies too. A case in point is Nike's 2018 ‘Crazy Dreams’ campaign with Colin Kaepernick, which led to a 31% increase in sales and generated $6 billion in brand value.

Purpose-driven marketing has made its mark in India too. Large corporate groups like the Tata and Mahindra have long aligned themselves with social causes ranging from education to environmental sustainability.

For instance, Mahindra’s 2014 ‘Rise for Good’ campaign exemplifies how businesses can position themselves as agents of change in society. The focus on corporate social responsibility in India, further amplified by the Companies Act, 2013 which mandates CSR spend, has helped brands integrate purpose into their business models.

Down to the nuts and bolts

To effectively harness the power of purpose-driven marketing, companies need to follow a structured approach that aligns purpose with business goals, culture, and communication strategies. Here are some key steps:

Define the core purpose: Identify a social cause that aligns with your core business values. It should resonate with your target audience and also reflect the organisation’s culture and long-term vision.

The purpose should be more than a marketing gimmick—it must form part of the company's DNA. For instance, Dove’s ‘Real Beauty’ campaign speaks of the company’s long-term commitment to redefining beauty standards, making it integral to the brand’s identity.

Align purpose with business objectives: Purpose should support business goals, from product development to employee engagement and supply chain practices. For instance, Volvo’s dedication to driver safety is integrated with its product strategy—from vehicle design to marketing.

Ensure stakeholder buy-in: For purpose-driven marketing to be effective, the commitment must come from all levels of the organisation, especially the leadership. Employees also need to be motivated and aligned with the purpose, as they are the first ambassadors of the brand.

Communicate with consistency and authenticity: Authenticity is crucial. Purpose-driven brands must communicate their values consistently across customer touchpoints.

Campaigns must not only highlight the cause but demonstrate how the company is actively contributing to solving it. Patagonia, for instance, instead of providing mere lip service to sustainability, takes concrete steps towards achieving it—from choice of product materials to advocacy.

Measure and adapt: Measuring the impact of purpose-driven initiatives is vital to ensure they are making a difference. Use performance metrics for customer loyalty, brand perception, and employee engagement to assess their success. Make adjustments where necessary to stay aligned with both, business goals and societal shifts.

Tackling potential challenges

Despite the increasing popularity of purpose-driven marketing, several challenges can hinder its successful implementation.

Authenticity and trust: Consumers today are more vigilant about brands being authentic in their purpose. Superficial campaigns, or what is often called ‘purpose-washing’, may lead to severe backlash.

A well-documented failure is Pepsi’s 2017 controversial ad featuring Kendall Jenner, which was lambasted for trivialising the ‘Black Lives Matter’ movement. Such examples serve as cautionary reminders that purpose must be deeply ingrained in the brand’s operations and not just its marketing communication.

Cultural fit: Finding the right cause that aligns with both the brand and its consumers can be tricky. The cause must resonate with the audience while fitting seamlessly into the company’s business practices. Inauthentic attempts to capitalise on trending issues can harm a brand’s credibility.

Long-term commitment: Unlike traditional marketing campaigns, purpose-driven marketing is not a quick fix. It requires long-term investment in both resources and effort. Brands must be willing to stay the course, as the societal impact of their efforts might take some time to materialise.

Purpose-driven business isn’t just a marketing ploy; it’s the north star guiding every decision, from acquisition to investment, and beyond.

Looking into the future

As the world becomes more socially conscious and digital natives like Gen Z dominate the consumer base, the importance of purpose-driven marketing will only intensify. Companies that fail to align themselves with a meaningful purpose risk becoming obsolete. Brands will need to evolve from merely supporting a cause to driving real change in society.

In the future, purpose-driven marketing will likely transcend the consumer realm to focus more on internal stakeholders. Employees increasingly expect their employers to take stands on social issues—from climate change to diversity to income inequality. Brands that align purpose with consumers as well as employees will flourish; and those that don’t may perish.

- Shruti Gupta, assistant professor – marketing at International Management Institute, New Delhi