Last week marked the 50th Annual Meeting of the World Economic Forum in Davos-Klosters, Switzerland. Among this year’s goals was an emphasis on “stakeholder capitalism” to encourage governments and international institutions to better evaluate progress towards the Paris Agreement and the Sustainable Development Goals. With a theme of Stakeholders for a Cohesive and Sustainable World, discussions at Davos focused on pursuing social and economic value through defining a clear social purpose that integrates ecological considerations into strategy as a means of maintaining trust with all stakeholders, while insuring that organizations can thrive in the long run. This is critical if companies want to thrive in the coming decade. The “long run” matters.
More than ever before, businesses are feeling the pressure to define their purpose and communicate it to their customers – which isn’t at all a bad thing. But most companies, even those with good intentions, get purpose all wrong. They approach it as if it’s a one-time corporate social responsibility (CSR) program or PR campaign: wrapped in pretty packaging and language, but ultimately lacking in substance.
Customers can see right through these shallow attempts at creating purpose where there is none. Purpose is not CSR, nor is it philanthropy. Purpose is an authentic expression of what your company and your customers can do together to build a brighter future. It goes far beyond products or short-term financial gains; it is based on earning customers’ buy-in and empowering them to achieve more with your company over time. And for all of these reasons, purpose is also good business.
Consumers today aren’t making decisions solely based on products or price. They are evaluating how a company acts and how it represents its values.
In Accenture Strategy’s global survey of almost 30,000 consumers, 62% say they want companies to take a stand on issues like sustainability, transparency or fair employment in a way that aligns with their own beliefs. Nearly half (47%) of consumers will walk away if they’re disappointed with a brand’s words or actions on a social issue, and 17% won’t come back.
Accenture’s report astutely identifies this as an opportunity for companies to foster real connections with customers: “Meaningful relationships that shift the customer dialogue from ‘give ME what I want’ to ‘support the ideals WE believe in.’ Long-lasting relationships grounded in a common purpose and built around a collective sense of brand belonging.”
Customers are seeking this kind of belonging in a world that can feel increasingly divided and lonely, despite our constant digital connectivity. People now put more trust in businesses than in governments, according to global data from Edelman. Nearly three-quarters of respondents (73%) believe companies can take actions that both boost profits and improve economic and social conditions for their local communities, and 76% say CEOs should take the lead on change – on issues such as equal pay, discrimination and the environment – rather than waiting for governments to implement it.
While this is exciting news for companies, it comes with a great deal of responsibility. Your customers are putting their faith in you, and you have to live up to their trust. How will you choose to use that power?
So before you dash off a superficial CSR effort, take the time to think through your company’s purpose in a genuine way. What do you stand for? Why are you here? How are you making people’s lives better? And how are you engaging your customers to be part of it?
When you live by your purpose and communicate it clearly, you draw your customers in to become enthusiastic participants and ambassadors. And by nurturing this shared purpose, you will start to become part of your customers’ lives and earn what we have coined Share of Life. This is more than simply developing a relationship between a brand and a customer. It strives to ensure that such a relationship will potentially last a lifetime – and is not just linked to a product or service. Consider Share of Life a paradigm shift taking place at the heart of brands within a digital-first age, moving from what brands had traditionally known as “one-to-one” communication toward a “one-with-one” mentality. We’re now experiencing a dramatic evolution of how brands and customers interact – more directly and even more intimately. Understanding that purpose should be lived with your customers is what makes companies like Patagonia and Warby Parker and SAP stand out (full disclosure: SAP is a client of Vertic).
With a Share of Life mindset, your customers will embrace your purpose as their own, and you work together toward the same vision for the future.
Biotech, Life Science and Pharma companies striving to get closer ties to doctors through owning First Party Data.