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goodpurpose 2012

Introducing: goodpurpose 2012

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To be successful today, leading brands and corporations must stand beyond making profits. Edelman’s 2012 Trust Barometer found that tomorrow’s trust is built on societal performance through the treatment of employees, putting customers ahead of profits,  and investments in the environment, society and local communities. Edelman CEO Richard Edelman called this seismic shift an organization’s need to go beyond a earning a “license to operate” to earning a “license to lead.”  A critical way to do this is by bringing society “inside” the organization to gain business and social impact.

From our new research– measuring 16 markets with 8,000 consumers– we find that consumers report that Purpose is here to stay. Since 2008, 86 percent report that companies should place at least equal emphasis on their social interests as on their business interests.

“Citizen consumers” are supporting brands and companies more than ever before. We call them citizen consumers because they are vocal, empowered and poised to act whether via the Arab Spring, the Occupy movement, or aligning with purposeful brands through purchases, praise, or advocacy.

There has also been dramatic acceptance of companies and brands “doing well while doing good.”  In 2012, 76 percent of global consumers believe it is acceptable for brands to support good causes and make money at the same time, a 33 percent increase globally from 2008. In Germany, there has been an 84 percent increase since 2007, and a 49 percent increase in China since 2007.

Eighteen months ago in our 2010 goodpurpose® study, we declared: “Purpose the 5th P in marketing.” This year’s findings support that further.

When quality and price are equal, the most important factor influencing brand choice is Purpose. This outpaces design and innovation, and brand loyalty. (Ok we agree Apple is an outlier here, but even Apple is more attuned to its Purpose, appointing two senior executives to enhance oversight of its complex supply chain.)  Across the globe, the prominence of Purpose as a purchase trigger has risen 26% since 2008. In certain regions, that growth is even more pronounced: Japan (100 percent), China (79 percent), Netherlands (43 percent), India (43 percent), and Germany (36 percent) since 2010. Executed with honest intent and a long-term view, Purpose provides distinct competitive advantage.

As social purpose’s role in purchasing decisions has increased, purchase frequency has also intensified: 47 percent of global consumers buy brands that support a good cause at least monthly, a 47 percent increase from 2010.

Not only are consumers making purchase decisions with Purpose top of mind, they are also buying and advocating for purposeful brands. Seventy-two percent of consumers would recommend a brand that supports a good cause over one that doesn’t; a 39 percent increase since 2008. Seventy-one percent of consumers would help a brand promote their products or services if there is a good cause behind them; a growth of 34 percent since 2008. Seventy-three percent of consumers would switch brands if a different brand of similar quality supported a good cause; a 9 percent increase since 2009.

With word of “mouse,” tweets and Facebook ‘likes’ so critical to a brands’ popularity and ultimate purchase, Purpose-driven brands are demonstrating their engagement power. With these findings, we believe brand marketing has been reengineered with citizen consumers around the globe clearly reporting and responding to purposeful brands and companies.

This is especially prominent in rapidly emerging economies– China, Brazil, India, Indonesia, Malaysia and the UAE– which we are calling “Purpose Bull Markets”, verses US and Western Europe, and Japan– which we are calling “Purpose Bear Markets”. The discrepancy is broad:  Bull verses Bear consumers report the following:

  • Trusting a brand that is ethically and socially responsible  — 83 percent versus 66 percent
  • Recommending a brand that supports a good cause  — 82 percent versus 64 percent
  • Switching brands to a different one supporting a good cause — 80 percent versus 67 percent

Why are the responses so high in these markets? The foremost reason: millions of new consumers are attuned to the social issues that impact the quality of their life: education, healthcare, the environment, clean water and disaster relief.

I will address more of the 2012 findings in future posts. Remember, it is not about “IF “a brand or a company will engage with Purpose, it is now about “HOW,” with rich rewards awaiting those brands who do it authentically over time.

Carol Cone is Edelman’s global chair of Business + Social Purpose.

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