Consumers Are Likely To Buy From Brands With A Strong Purpose
A global study analyzing the business value of brands having a well understood Purpose has revealed a strong business benefit as consumers are four to six times more likely to buy from, trust, champion, and defend companies with a strong Purpose.
The 2020 Zeno Strength of Purpose Study, commissioned by Zeno Group, the global, integrated communications agency, surveyed more than 8,000 individuals across 8 markets (United States, Canada, United Kingdom, France, China, India, Singapore, Malaysia). As part of the study, consumers rated their perceived strength of Purpose of more than 75 brands. Zeno then performed a correlation and regression analysis to understand the relationship between consumers’ perceptions of a brand’s Purpose and their attitudes and intended behavior toward them.
Zeno found that when a brand is perceived to have a strong Purpose, consumers were: • Four times more likely to purchase from the brand (45% of consumers surveyed in India are inclined towards buying such brands)
• Six times more likely to defend that brand in a challenging moment (95% of surveyed Indian consumers were likely to continue to support brands in the event that they were to make a misstep or receive public criticism)
• Four and a half times more likely to recommend (champion) the brand to friends and family (one in every two consumers surveyed in India agreed they would champion such a brand)
• Four times more likely to trust the brand
Globally, consumers in India, Malaysia and Singapore were most likely to buy from a brand with a strong Purpose. France and the UK emerged as the countries most likely to trust, champion and defend a brand with a strong Purpose. The survey also found that the benefits of a strong Purpose held across regions and generations, with an overwhelming 98% of Indian consumers surveyed (as against the global 82%) saying they took action to support a company or brand when they believed in its Purpose, sharing positive opinions of that brand with others, encouraging others to support or buy it, or starting to buy from the brand themselves. “India has a long and strong tradition of companies and brands acting with purpose beyond profit,” said Rekha Rao, Managing Director of Zeno Group India. “Today, we can back that up with clear proof that purpose and profit are closely related. Every company needs to ask itself not just what’s the ROI of a commitment to purpose, but also what are the risks and costs from not taking it seriously, or relying purely on philanthropy.”
Elements of Strength of Purpose Zeno asked survey respondents to identify the top attributes of purposeful brands and uncovered eight key elements: • Fair treatment of all employees
• Products or services that reflect the needs of people today • Ethical and sustainable business practices • Support for important social causes • Creation of new job opportunities
• Diverse and inclusive culture • Issue advocacy
• Strong set of values
In India, consumers (60% of those surveyed), rated making “products and services that reflect the needs of people today” as the top element of a purposeful brand. In North America and Europe, respondents ranked “fair treatment of employees” as the number one element of a purposeful brand. The Purpose Paradox
Meanwhile, while 94% of global consumers stated they want companies they engage with to have a strong Purpose, only 37% believe companies today have a clear and strong Purpose.
Moreover, 87% of Indian consumers surveyed (as against 83% globally) said companies should only earn a profit if they have a positive impact, implying consumers have developed an expectation that brands and companies should see themselves as having higher callings than earning money and rewarding shareholders.
“By evaluating over 75 global companies, this is truly the first study of its kind directly linking the strength of a brand’s Purpose to reputation and business benefits. The data proves that consumers expect companies to have a more meaningful reason for being and are making decisions about what to buy and where to work with an eye toward supporting those that share their values,” said Alison DaSilva, Managing Director, Purpose & Impact at Zeno Group. “Yet, companies are leaving equity and opportunity on the table as the majority of consumers do not believe companies today have a clear and strong Purpose. It has never been more important for companies to not only articulate their Purpose, but to consistently demonstrate that Purpose in how they operate, support issues and engage with all stakeholders.”
Holding Brands Accountable
The study also found the so-called “cancel culture” expressed in respondents’ replies, as nearly eight-in-ten (76%) global consumers indicated they will act against brands whose Purpose, values or behaviors they disagree with, by no longer buying from the brand, switching to a competitor, or discouraging others from buying or supporting it.
The cancel culture behavior appears strongest among younger generations, with 88% of Gen Z and 85% of Millennials saying they were more likely to act negatively towards a brand they disagreed with. Primary actions included sharing their opinions with family and friends, whereas Boomers and Matures were more likely to act with their wallets, saying they would stop buying from the brand altogether.
In Asian countries, the inclination to act negatively against a brand when it acts in ways that disagree with the consumer was stronger. Meanwhile, in the United States, Canada, France, and the United Kingdom, consumers were slightly more forgiving of brands when they disappointed.
Younger Generations: Valuing Purpose
While respondents across generations recognized the strength and importance of Purpose, younger generations were most likely to champion on behalf of brands with a strong Purpose. Findings included:
• 91% of Gen Z and 90% of Millennial respondents saying they would act in support of a purposeful brand – at least 10 percentage points higher than other generations surveyed.
• 87% of Gen Z and 84% of Millennials saying it’s a CEO, Founder, or Owner’s responsibility to drive a brand’s Purpose – six-to-three percentage points higher than all respondents.
• 70% of Gen Z and Millennials saying they believe a brand should have a Purpose they personally believe – 22 percentage points higher than Boomers and Matures.
• Across all survey questions, Gen Z led all generations in their positive affirmation of a brand’s Purpose.
“When it comes to Gen Z – teens and 20-somethings – the stakes for brands couldn’t be higher, as many of these young people are in fact their own brands. They expect brands to live their Purpose with action and to responsibly and consistently wield their economic and social power for good,” said Therese Caruso, Managing Director, Global Strategy & Planning at Zeno Group. “Gen Z’s number one ambition is to build a better world through the strength of collective action. Those brands that do not put authentic and actionable Purpose at their core risk losing one of the most influential youth generations on the planet.”