Why Purpose-Led Marketing Might Be Good for Optics but Bad for Business
Although promoting ‘brand values’ may be fashionable, some maintain that ‘activism’ has no place in business
There has been a noticeable rise in recent years in purpose-led marketing that’s given a whole new meaning to the term ‘brand values’. With the world becoming increasingly divided along political and ideological lines, a number of causes and issues have gained both support and criticism due to a growing sentiment of both activist zeal on the one hand, and a growing distrust of governments and corporations on the other. What has become a matter of identity-driven moral and social principles for some, is regarded with suspicion and aversion by others. But where once upon a time it used to be considered taboo for brands to ‘take sides’ publicly on controversial issues, in the 2020s it seems to be all the rage.
Where once upon a time it used to be considered taboo for brands to ‘take sides’ publicly on controversial issues, in the 2020s it seems to be all the rage.
Not all causes are controversial and divisive. Coming together to help support a sick child, or provide a wonderful opportunity to someone who might never be able to benefit from such an opportunity without assistance, or help a community in the aftermath of a natural disaster, or perform a good deed to lift the spirits of someone (or a group of people) in need — are all examples of activities driven by sheer kindness, akin to feelgood stories that warm the cockles of the heart (for anyone who actually has one).
But there are other types of causes and issues that do stoke controversy, because they are inherently offensive or contradictory to some people’s principles and opinions.
Each of us has opinions and beliefs about a wide range of topics and issues, influenced by our upbringing, our spiritual and religious beliefs, our social influences, our political affiliations, our education, our personal life experience, and so on. So logically, it stands to reason that at any given moment, a company’s employees will hold a variety of opinions on a variety of issues.
In other words, if a company chooses to align itself with a particular cause or issue which is regarded as controversial, it instantly creates a scenario where not all of their employees may be supportive of such a stance. Even the most talented, hard-working or veteran employees, who might ordinarily be the most devoted advocates and ambassadors for their companies — might suddenly find themselves working for a company that has decided to publicly support a cause or issue they’re not personally inclined to support themselves. This opens up a whole range of problems, from people reluctantly tolerating that cause in public (while secretly loathing it in private) just so they can keep their jobs, all the way to toxic work environments where people end up losing both friends and livelihoods.
And the same goes for a company’s customers. Again — for every cause or ‘purpose’ a brand chooses to support publicly, there will be those who find it inspiring, and those who find it alienating.
Sometimes, company executives who endorse a purpose-led marketing strategy — either because their competitors are doing it, or because they think it will put them in good stead with existing and potential customers — do it because they assume it will be widely supported, when in reality, the proportion of existing and potential customers who don’t support it is actually larger than those who do.
And therein lies the rub: If the purpose of a business is to generate as much revenue and profit as possible, then by purposely and publicly declaring the business as supportive of some kind of potentially controversial issue, it automatically alienates a chunk (possibly the larger chunk) of its target audience, who might have continued to be loyal customers had they not been alienated by value-based (a.k.a. ‘purpose-led’) marketing that turns them off.
Many company leaders have justified purpose-led branding by saying they’d rather lose the patronage of customers who don’t share the same ‘values’ the company feels compelled to align with, because aligning with those values or issues “means more” to the business leaders than the lost revenue those patrons might have generated.
This would indeed be a noble attitude, if those companies were social movements.
But they’re not.
They are businesses, and knowingly adopting a strategy that would shoot companies in the foot by jeopardizing profit, is bad for brand awareness (because part of their audience will now become ‘aware’ that they can no longer support that brand) and decidedly bad for business.
Traditional marketing — or ‘pre’ purpose-led branding — focused on showcasing the product in the most appealing way to its target audience, highlighting its standout features and benefits so that as many people as possible would prefer to buy that product over that of competing brands. Countless beloved products have become household names over the past century based on things like memorable brand personalities and ad campaigns that helped audiences form an affinity for the brands based on the merit of their products, rather than what they “stand for” (besides traditional business virtues like ‘great quality and service’).
In the 2020s, however, while some brands are sticking to impartial and universally appealing marketing strategies — many are jumping on board the purpose-led marketing bandwagon that’s forcing customers to take sides, and either stick with them, or ditch them in favor of competing brands whose products are just as good, but whose marketing messaging isn’t based on ‘which causes and issues their customers support’. Instead, they’re focused on selling their products to customers who want to buy them without being made to feel alienated for not sharing the company’s brand ‘values’.
To be fair, there is evidence suggesting that consumers gravitate towards brands that embody certain values or support causes they feel they can get behind too. Everyone appreciates brands that demonstrate they have ‘heart’ and an admirable moral compass. But brands that genuinely have ‘heart’ and want to give back to their communities or to society in some way, have options.
Everyone appreciates brands that demonstrate they have ‘heart’ and an admirable moral compass. But brands that genuinely have ‘heart’ and want to give back to their communities or to society in some way, have options.
Rather than getting behind controversial issues that might potentially alienate customers, they can choose to support causes that are indisputably beyond reproach, such as the ones I mentioned earlier. That way, they can still do plenty of good — to the delight of both employees and customers — without risking serious damage to their revenues and business objectives.
For now, purpose-led, socially-driven branding is fashionable, and young marketing executives who are themselves influenced by a variety of social or political causes are often at the forefront of adopting this type of branding strategy and championing it across their organizations.
But in business, the bottom-line matters. It matters to shareholders, and it matters to businesspeople who would rather increase their market share rather than see it dwindle and eaten up by competitors who are savvy enough to stay focused on growing their companies rather than shrinking them by alienating huge chunks of their customer base.
Cancel-culture has (sadly) created a world where customers may feel not only uncomfortable but downright intimidated by publicly voicing their disdain for purpose-led brands that turn them off. But “money talks”, so they express their true inclinations through their purchasing decisions.
In a free market, people have a choice about how they spend their money, so CEOs who have given free rein to their purpose-led marketing teams should tread with care, unless they too are happy to prioritize controversial political and social initiatives over unfettered business growth.
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