By: Emma Dent, Account Director & Sustainability Lead
More than ever, consumers want to engage with companies that do good and businesses are, in turn, recognising the commercial and competitive edge to be gained from having a clear purpose beyond profit.
A Bain consumer survey showed that more than 70% of consumers are willing to pay a premium (approximately 10%–25%) for sustainability. In recognition of this, between 2019 and 2020, the number of new companies espousing an Environmental, Social and Governance (ESG) mission more than doubled. Now, 35% of all new consumer product start-ups have a clear ESG mission, a tenfold increase since 2005.
So what is ‘purpose’ in this context, and how do you decide what yours should be?
What is purpose?
At a basic level, a purpose is what an organisation stands for. Brands driven by a sense of purpose craft a straightforward and captivating message to inform consumers about the core mission they stand for. They often rely on data to anchor and emphasise their message. But before we delve into the definition of purpose, it’s important to understand how purpose differs from a mission statement, because it’s easy to confuse the two.
A mission statement outlines what a business does, which is why it’s often confused with a purpose statement, but a mission statement’s focus is internal. It’s intended to motivate and provide direction for employees and management.
A purpose statement has a much more outward focus. It outlines what you’re doing for the wider world; your customers, your community, and the environment.
Why does purpose matter?
In short, because it matters to your customers. Consumer data shows customers view purpose-driven brands as being more caring and, as a result, are more loyal to them.
But it’s also important in attracting and retaining staff. According to the Bain study, purpose-led brands typically gain traction by creating issue awareness. This drives consumer interest in their products, spurs retailer demand, and attracts and motivates high-quality employees. All of these factors lead to better growth and, in turn, higher interest from investors.
Who’s getting it right?
Rubies in the Rubble is a great example of a business with real purpose. Shocked by the amount of fruit and veg rejected on aesthetic grounds, founder Jenny began rescuing produce from New Covent Garden market and experimenting in the kitchen with childhood recipes.
In 2012, she started Rubies in the Rubble. Its purpose? “To provide a solution to food surplus by creating food products people can enjoy and inspire them to value food as a precious resource.”
Today, Rubies in the Rubble is a pioneering voice in food sustainability with an award-winning range of condiments stocked nationwide. To date, it reports saving 351,600kg of surplus fruit and veg and 294,500 tonnes CO2E and is now a certified B-Corp.
Creating and communicating your purpose
The benefits of having a clear purpose are wide-ranging and far-reaching but ultimately you will see it reflected in your bottom line. Here are some tips when setting out your purpose.
Do your research. Speak to customers and staff. Examine the trends affecting the political, economic, social and technological context in which you operate. Leverage data to help ensure your purpose has relevance in the real world. For example, Dove’s purpose of “to help women everywhere develop a positive relationship with the way they look, helping them raise their self-esteem and realise their full potential” stems from the stat that only 4% of women around the world consider themselves beautiful.
Be realistic. When purpose is too far removed from where an organisation's current culture is, it comes across as inauthentic. The wider the gap between your stated purpose and how your business operates, the higher the risk of customers and staff becoming disengaged.
Don’t set an end date. Your purpose is not something that should expire on a certain date to be replaced with a new one, but rather an ongoing source of motivation. Take NASA’s: “Reach for new heights and reveal the unknown for the benefit of humankind”. This purpose drives every mission, not just the next five or 10.
Once you have a clear idea of what your purpose is, you need to distil it into a powerful purpose statement; a single sentence that encapsulates your company’s reason to exist, beyond just making a profit.
A good purpose statement should use plain language that’s simple for employees, customers and stakeholders to understand. This is easier said than done and something the experts at The Jargon Group can help with.
Examples of powerful purpose statements.
Successful purpose statements connect with people on an emotional rather than just a commercial level.
Google: "To organize the world's information and make it universally accessible and useful."
Tesla: "To accelerate the world's transition to sustainable energy."
Starbucks: "To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time."
Patagonia: "Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis."
IKEA: "To create a better everyday life for the many people.”
These statements don’t use phrases like “number one choice”, “the fastest-growing”, or “most innovative”.
Purpose statements are about the connection between what a company does and the benefit it wants to deliver to people’s lives.
If there’s a gulf between what you’re saying and what you’re doing, get in touch today to see how we can help you bridge the gap.