Brands struggle to sustain ‘purpose’ commitments
As high-profile brands such as Apple, Diageo and Johnson & Johnson fall out of the top 100 for ‘purpose’, it seems many companies are flirting with the idea and not following through.
Despite an industry-wide hunger to become “the next Unilever”, many brands are struggling to retain a long-term focus on commitments to social purpose.
In consultancy Radley Yeldar’s 2016 list of the top 100 companies for social purpose, 28 brands from the 2015 list have lost their places. Four of 2015’s top 10 also see significant drops. The ranking monitors how well companies follow through on pledges, thus adding meaning to their products and services and enabling customers to trust and connect with them on an emotional level.
Many of these are high-profile businesses, with Johnson & Johnson, Volkswagen, Orange, Apple, Samsung, WPP, JPMorgan, Diageo and Carrefour among the casualties.
READ MORE: The top 100 companies for ‘brand purpose’ in 2015
Paulina Lezama, brand strategy team leader at Radley Yeldar, believes the drop-outs show that embedding purpose takes longer than many brands expect.
“These things take a long time,” she says. “You can change the business and define the marketing in a year, and then think this is a road map to brand purpose, but the reality is it will take four to 10 years to actually get there. It won’t happen over night.”
Lezama warns: “Customers will figure it out if you make a stand and then just stop. Brand purpose involves creating targets, so if in a year’s time it all disappears you will be found out.”
READ MORE: Consumers are willing to pay more for purposeful brands
The brands leading the way
Unilever, which has prioritised backing startups through the Unilever Foundry initiative and long-term sustainability pledges through its FMCG brands, remains in the top spot. Lloyds Banking Group has moved up one to take second place.
One of the biggest movers is Pfizer, rising 53 places to take ninth position. The pharmaceuticals giant has prioritised sustainability over recent years, aiming to reduce its greenhouse gas emissions by 20% between 2012 and 2020.
Reckitt Benckiser climbs 48 places to take seventh spot, while fifth-placed Novo Nordisk rises 33 places compared with 2015.
New entrants on this year’s top 100 include Sony, Mastercard, Lego, Nike and Ikea. However, if they are to retain their position they have to embed social purpose across their business and beyond the marketing department, according to Anna Koklanakis, senior global brand manager for sustainability at Unilever-owned Knorr.
“The promise of acting with purpose stretches far beyond the marketing department – it’s an empowering reason for every function in a team to think about how they can make a positive impact.”
Anna Koklanakis, senior global brand manager, Knorr
“The promise of acting with purpose stretches far beyond the marketing department – it’s an empowering reason for every function in a team to think about how they can make a positive impact through every part of the business,” she explains.
“It acts as a thread across all functions and our value chain from research and development and packaging teams to procurement teams, nutritionists, partnerships and finance. The marketers bring brand purpose to life, but to be able to do so with integrity it requires a true team effort behind the scenes across departments.”
The impact of purpose on ROI
Unilever has insisted in the past that its brands that communicate sustainability pledges, such as Ben & Jerry’s and Persil, achieve 10% higher sales performance than the ones that don’t.
Koklanakis says the strategy is having a positive impact for the Knorr brand as well.
“When we tested brand trust before and after our nutritious cooking campaign in Nigeria, we saw it increase from 78% to 92%,” she adds. “A recent Knorr soups campaign in Turkey, which highlighted our sustainable sourcing programme, helped turnaround a six-year penetration decline and increased repeat usage by 180 basis points [1.8 percentage points] versus the previous year.”
READ MORE: Why brand purpose requires more than just a snappy slogan
Computer software brand SAP is up two places to 20th in this year’s top 100. It has benefited from recent pledges to make a difference to people’s health, and from committing to 17 sustainability pledges.
Julie Barrier, vice-president of purpose-driven marketing at SAP, claims the activity is generating earned media from influencers “keen to shine a light on SAP and its CEO Bill McDermott as purpose-driven leaders”.
She claims this is having an impact on ROI as well. “Just a one percentage point change in employee engagement has an impact of €40m to €50m (£34m to £43m) on our gross profit,” she explains.
“In 2015 we ran focused health programmes in our German subsidiary, including education about nutrition, offering of bicycle leasing programmes for healthy commuting, or activity trackers to monitor daily activities. This improved ROI by 3.9%.”
Are brands tiring of ‘purpose’?
With so many high-profile brands dropping out of the top 100, it appears many are not as convinced as Unilever and SAP when it comes to brand purpose and its impact on sales. Yet Radley Yeldar’s Lezama insists brand purpose isn’t slipping off the radar.
READ MORE: How marketers can put social purpose into practice
“All the big corporations want to follow Unilever. There is an industry-wide hunger to follow them,” she says. “When we have client meetings and I’m talking some of the biggest brands in the world, the first thing they say is ‘we want to be the next Unilever when it comes to brand purpose’.”
She admits that healthcare is the business sector that “most underperforms” when it comes to standing for a purpose as it “fails to properly measure or embed it into behaviours”. Lezama’s advice for brands wanting to become the next Unilever is to ensure that leadership truly buys into change.
“The ones that get it right go the next step and talk to their HR teams and PR teams and everyone. The PR, HR, sustainability and engagement departments are all in the same room. Leadership must truly buy into the changes,” she adds.
“It has to be bottom-up too, as employees must buy into it or you will fail. They cannot see it as a cynical rebrand. Brand purpose has to be the reason why somebody behind a till comes into work every day.”
