Purposeful second-stage companies are more likely to grow and scale in 2021 and beyond following industry disruption caused by the global COVID-19 pandemic. Research suggests that consumer expectations are changing, and consumers now expect brands to be meaningful problem-solvers. The main advantage that these challenger brands have in common: brand purpose.
For the goliaths, opportunity means digging into deep pockets and outspending weaker rivals (or purchasing them). For challenger brands, opportunity means outthinking and outpacing the larger, slower, more unfocused competition.
The second-stage challenger brands that will win 2021 (across all industries and markets) have a competitive advantage in common: brand purpose.
Before crunching the numbers on business model adjustments with your leadership team, answer these two questions together:
- Why do you exist?
- Who are you built to serve?
Use these questions as a compass. In 2021, purposeful second-stage companies will get ahead by taking these actions:
Making focused pivots. Purposeful second-stage companies will make nimble business model adjustments informed by “why” and “who,” creating exponential value for their customers – gaining new traction in the marketplace faster than their slow-moving, enterprise-level counterparts.
Following through with brand purpose. These companies understand that purpose in the business model must follow through into branding to yield sustainable, long-term results like market share and brand loyalty. Their brand positioning will resonate with their prioritized (one) primary target customer and communicate their value effectively.
“Organizations that know why they exist and who they’re built to serve are uniquely positioned to navigate unprecedented change.”
Deloitte – 2021 Global Marketing Trends: Find Your Focus
Purpose-driven organizations arguably have a stronger competitive advantage now than any other time in our generation. As Deloitte points out in its 2021 report, “why” you exist and “who” you exist to serve ultimately take precedence over “what” you sell during times of economic and cultural transformation.
When “why” and “who” inform every decision you make, your adjustments in times of turbulence are much more likely to be successful. This is really an exercise in alignment. You avoid disconnects between you and your primary target customer, and you don’t lose sight of what sets you apart from the other brands around you jockeying for position.
Keep in mind that your customers do notice the adjustments you make, in real time. Fifty-eight percent of respondents to Deloitte’s study could recall at least one brand that quickly pivoted to better respond to their needs, and eighty-two percent said this led to them doing more business with the brand.
What does brand purpose mean for small businesses?
At Six-Point, we often field the question: how does a small company live out a “big” purpose? The Deloitte study provides a helpful example of purpose being tied to action by Ella’s Kitchen, a mid-sized baby and toddler food brand much smaller than many of its behemoth category competitors.
The Ella’s Kitchen brand purpose:
Create healthy eating habits that will last a lifetime.
How Ella’s Kitchen enacts its brand purpose, beyond selling products:
Providing resources to educate parents and givers about healthy eating.
Donating products to underserved children around the world.
Committing to an ethically sourced supply chain.
It’s not too late to become a purposeful brand.
As The Marketoonist Tom Fishburne points out with the help of a quote by brand strategist Tom Roach, “if being purposeful means doing ads to you, you’re doing it wrong.”
Roach also differentiates between two types of purposeful brands: some brands are “born purposeful,” clear about their purpose at launch, while others are “corporate converts,” re-orienting their businesses around a purpose along the way.
It’s not too late to become a purposeful brand if you’re not there yet. The only prerequisites to becoming a “corporate convert” are authenticity, and a willingness to commit to strategic, long-term work ahead. Injecting more purpose into an existing brand requires substantial change management. It’s also worth the investment.
If your business has purpose that’s getting lost, we can help your leadership team begin the realignment process:
- Our Build Your Brand Strategy workshop guides leadership teams to begin aligning their business purpose with their branding and marketing decisions.
- Together, we uncover what’s holding your brand back, prepare you to make smarter decisions with your limited resources, and put an actionable road map into place for building better connections with your target customers.
In today’s world, consumers look to businesses as problem-solvers, which indicates they’re actively seeking brands with purpose. The pandemic has accelerated this trend.
- In the Edelman 2021 Trust Barometer, consumers ranked business as the only societal institution that’s both competent AND ethical.
- 68 percent of consumers also believe CEOs should step in when the government does not fix societal problems.
- 66 percent of consumers believe that brands who speak out can facilitate real change, and 67 percent say that brands are effective at increasing awareness of issues when they use their platforms, especially social media (Sprout Social 2019 Brands Get Real report).
These trends aren’t new, but they are growing, and the impact is now felt by brands of all sizes — not just enterprise-level household names. Consider the following:
- The assertion that consumers only expect the most culturally relevant brands (the likes of Nike, Ben & Jerry’s, and Apple) to further the dialogue on social issues is a misconception. Edelman’s 2019 Trust Barometer found that 53 percent of consumers agree that every brand should get involved in at least one social issue that does not directly impact its business.
- Brand activism is an opportunity to build long-term brand trust from your market by demonstrating transparency and authenticity. Nine in ten consumers are more likely to give brands who are highly transparent second chances after bad experiences, and 85 percent are more likely to stick with them during crises.
- Your brand can mitigate risk and still find its voice, reaping the benefits of the opportunity.
- Start with issues relevant to your business operations, your employees, and your customers to avoid being met with skepticism.
- Take the time to learn which issues are most important to your customers. The Brands Get Real report found that when consumers agree with a brand’s stance, 37 percent will refer that company to their friends and family and 36 percent will buy more from that brand.
- Assess each opportunity to speak on social issues before taking action. Harvard Business Review published a helpful three-question framework you should use to determine if you can make an impact on an issue, and if you’ll be aligned with your customers.
Committing to authentic diversity and inclusivity in your marketing and advertising creative will also have similar long-term effects.
- Authenticity goes beyond simply “checking a box.” A report by Stackla found that when brands made work that gave dimension to people beyond gender or skin color stereotypes, they were met with a 15 percent rise in consumer perception.
- Diverse, inclusive marketing is a long-term commitment. It’s not a one-campaign or even one-year initiative.
- Take the time to exhaustively reflect on your creative. The World Federation of Advertisers’ 2020 guide, A marketer’s approach to diversity and inclusion, has examples of the questions change-making leading brands are asking themselves.
- Talking the talk (in advertising) is most effective when you’re walking the walk internally, too. Align company culture to the same values you’re going to push out into the marketplace.
The good news is…
If your company has grown beyond start-up phase, you likely have some degree of purpose in your DNA. Most companies don’t make it this far. You’re doing something with purpose.
At this stage, the questions are:
- Is there a disconnect between your perception of your company’s purpose, and the experience customers have with your brand?
- Is your purpose omnipresent throughout your operations and culture, or is it siloed to certain departments and leadership roles?
- Are you getting “credit” with your customers and prospective customers for your purpose and value, or are you a “best kept secret?”
Align your team, your positioning, and your messaging.
Uncover hidden assets in your existing brand.
Avoid confusion, customer loss, and team frustration by guiding you through proven step-by-step communication and engagement plans.