Social Purpose Branding: The Next Big Thing
March 10, 2019 I A. Bruce Crawley
Perhaps large corporations began to desert their fundamental responsibility to their own consumers, employees and communities, in the early 1970s. That’s when Milton Friedman, arguably the most respected and influential economist of the 20th century, sadly, said, that “Social responsibility is a fundamentally subversive doctrine in a free society and, in such a society, there is one, and only one, social responsibility of business—to use its resources, and engage in activities, designed to increase its profits...”
Given Friedman’s stature, at the time, is it any wonder that his sentiment seeped into the curricula of America’s most prestigious business schools, where students have now been taught, for the past 50 years, that the only reason for the existence of a publicly traded corporation is to enhance the value of its shareholders?
The negative impact of Friedman’s philosophy and a half-century-long academic doctrine that it was simply “good business” to separate corporations from the needs of their communities and employees, are now confronted by the digitally empowered “social purpose” branding imperative.
In that regard, a recent piece by Ben Paynter, in December’s “Fast Company,” should be required reading. In case you missed it, that was the one whose headline boldly asked the question: “Will Brands without Social Purpose Thrive?”
It’s a very timely question given the growing consumer perspective that espouses that there will be no transactions with companies that reflect values with which they don’t agree. It’s an appropriate question when young college grads are making it clear that they have no interest in working at companies whose sole purposes are the creation of financial margins, without concern for people and issues in their broader communities.
According to a global survey by Accenture Strategies, nearly two-thirds of consumers, worldwide, prefer to purchase goods and services from companies that stand for a purpose that reflects their own values, and they will avoid doing business with companies that don’t. Indeed, a survey by UK agency Mediacom found that 49 percent of consumers are even willing to pay more for goods and services from brands whose core values they share.
In addition, 65 percent of Accenture respondents said they based purchase decisions on “the words, values and actions of company leaders.” Two-thirds of consumers also believe their protests and boycotts can have a direct impact on brand behaviors, and about 50 percent have stopped doing business with a brand as result of their disappointment in its behavior.
Does this new consumer movement have just an individual-product, or episodic, impact on brands? To the contrary, Kantar Consulting has found that brands with a high sense of purpose experienced valuation increases of 175 percent over a 12-year period, as compared to a median 86 percent growth rate.
The evidence of the growing impact of social purpose marketing can also be seen, on the plus side, by the hugely successful Nike/Colín Kaepernick campaign, and on the negative side, by brand-damaging consumer reactions to social purpose mis-steps by Papa John’s and Starbucks.
Closer to home, in late 2018, our own firm was a global finalist in the UK-based Drum Award’s Social Purpose category, for our work in establishing the African Bicycle Contribution Foundation(ABCF). The foundation purchases and distributes Ghanaian-made bamboo bicycles to rural students, small farmers and healthcare workers, in that West African country. Importantly, also, our tweets on Social Purpose have garnered, far and away, the greatest number of impressions we’ve experienced, over the past nine years.
We didn’t launch ABCF to win global award recognition, but rather because we felt a natural responsibility, as a business that grew out of the so-called inner city, to give back to communities that spawned us and which support us around the world.
America, and nations across the globe, will be important beneficiaries of this new mindset, as will brands that have any sense, at all, of what their consumers are now demanding.
At our firm, we are delighted to recognize that consumers, through their demand for Social Purpose branding initiatives, have helped to drive the re-emergence of corporate responsibility from the dark places to which it had been driven by Milton Friedman, the now-infamous economist.
March 10, 2019
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A. Bruce Crawley is president, CEO and principal owner of Millennium 3 Management, Inc. (M3M). Read More...