Branding Myths - Brand Purpose
Branding Myths - Brand Purpose
Consumers aren't dumb. They know you are a brand selling products. Consumers might "say" they care about a brand's values, but their purchase behavior doesn't reflect that.
For anyone new here, I’m the founder of Woo Punch, a brand consultancy rooted in evidence-based brand design. I write about the evidence that debunks brand purpose, differentiation, brand love, loyalty marketing, customer personas, color psychology, mission statements, customer engagement, AdTech, and “hustle culture.”
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THE BRAND PURPOSE MYTH
Today’s consumers defy human nature and are more virtuous than ever before. Therefore, you will fail if your brand doesn’t have a purpose outside of profit.
What I’m about to say hurts. It goes against what we want to be true. It goes against what I want to be true. But unfortunately, we have no choice but to face the facts. Having a brand purpose outside of profit won’t increase your market share.
Might I suggest a better reason for a brand purpose? It could be the right thing to do.
THE ORIGIN OF BRAND PURPOSE.
In his book, Grow, this concept of Brand Purpose driving growth was first made famous by former P&G Global Marketing Officer Jim Stengel. Stengel took the top 50 brands with the best stock market performance during 2000-2011. He then noticed that all 50 companies had a “brand ideal” to make the world a better place.
Through weak arguments and shotty science, Stengel concluded that “brand ideals” were essential for brand growth.
The first problem with Stengel’s theory was his cherry-picked data.
By only selecting the top 50 highest performing brands, Stengel ignored poor-performing brands that also had “brand ideals.” The second problem was that Stengel’s theory couldn’t predict the future growth of his top 50 based on market performance.
Of the 50 companies in “The Stengel 50,” only 26 had measurable stock performance listings. Moreover, of those 26 measurable brands, only 9 outperformed average market expectations in the 5 years since the original study. The final problem is how Stengel classified his top 50’s “brand ideals.” Many of these ideals were generic to their respective brand categories.
For example, Moët & Chandon champaign’s “brand ideal” was “to transform occasions into celebrations,” Mercedes Benz’s ideal was “to epitomize a life of achievement,” and Blackberry’s ideal was “to connect people.”
Those are just vague descriptions for champaign, luxury vehicles, and phones.
One study by Richard Shotton found that, by surveying 1,000 consumers,* consumers weren’t any better than chance at matching the correct brands with their “brand ideals.”
*This study was not publicly available.
IS BRAND PURPOSE STILL UNHELPFUL FOR MARKET SHARE GROWTH?
Some might say, “But Stengel’s list was created in the early 2000s! Today’s consumer is different! They really and truly care about making the world a better place!”
WILL GEN-Z CHANGE EVERYTHING?
Some people claim that because we are more connected than ever before (thanks to social media), we are more aware of dishonesty in the market. For this reason, “Gen-Z” is seen as a unique generation. This new, virtuous generation will finally change the world, armed with transparency!
But the idea that each generation differs from the next is a common fallacy. In reality, no one can agree on the age range for any generation, and no evidence proves one generation is universally different from the next.
There are more differences within generations than there are between generations.
This becomes obvious when you look at the characteristics of these alleged generations. “The Silent Generation” and “Baby Boomers” are supposed to be primarily motivated by tradition. If that’s true, how do you explain the sexual revolution? Both generations were responsible for that movement.
There has been an unprecedented shift from “Millennials” to “Gen-Z” (I’ll just call them people born after 1995). This is one of the most dramatic shifts (of any kind) between generations in decades. Unfortunately, however, it isn’t a shift in virtue.
Rates for depression and suicides have skyrocketed, and experts have named social media the leading candidate for the cause. This increase in depression and suicide suggests that if there is a correlation between “Gen-Z” and virtue, it’s probably a negative one. People don’t gravitate toward goodness when they are depressed.
This makes me highly suspect when people say today’s consumers are principled about the brands they buy and that previous generations (with much lower depression and suicide rates) are not. As of now, there is no evidence to suggest that Brand Purpose (merely advertised or invested in) will help you increase your market share.
All the studies I have seen (and I have been looking for months) that suggest a generational shift in virtue and principled buying have been survey-based.
These studies do prove one thing. “Gen-Z,” says they care deeply about brand purpose, even if they don’t act like it.
COULD ADVERTISING A BRAND PURPOSE BE A HELPFUL TOOL IN THE FUTURE? IN THEORY, YES.
I have a couple of theories as to why studies in the future might confirm advertising a brand purpose as a helpful tool for market share growth.
THEORY #1: SKEWED DATA
The data could get skewed, making it difficult to accurately measure results. Brand Purpose is recently popular among marketers, so most major brands will have (or market at the very least) a strong Brand Purpose within the next few years.
This could make it very difficult to empirically research the effectiveness of Brand Purpose since just about every company will have one.
THEORY #2
Signaling is a powerful social tool.
Human beings are highly susceptible to signaling status, power, and virtue to gain acceptance among their peers. With social media, we are more prone to signaling than ever before. That’s because our signaling is now public and can have a massive reach.
This is where Theory 2 gets interesting. Advertising a Brand Purpose could increase your market share. However, not for the reasons you might think if signaling is at play.
Theoretically, you could have a lot of customers helping your brand get noticed because of virtue signaling.
However, those customers would probably deceive themselves and others by signaling they bought your brand on social media without actually buying it or only buying it once to show their friends.
This is why I don’t think virtue signaling will lead to long-term growth in the market, even if it does provide a short-term spike in sales.
THEORY #3
Theory 3 is the most plausible to me. Sometimes when we are depressed, we ignore our problems and focus on the world’s problems, especially if we can do it with minimal effort.
For example, buying a pair of Tom’s is an easy way to feel good about ourselves and look good in the process. Even if Tom doesn’t help the poor.
CONCLUSION
Before you set out to solve the world's problems, solve your own. You can't change the world if your employees and customers aren't treated with inherent dignity. Start there. Don't just write a Brand Purpose; invest in one. Otherwise, you're lying to yourself, your employees, and your customers.
Although, your customers probably won't notice or care if you're dishonest. After all, Volkswagen had a spike in growth after blatantly lying to their customers. If you're an asshole, you can just do what you want.
As long as you treat everyone (including yourself) with inherent dignity, you don't need a large-scale, grandiose Brand Purpose. Prioritizing Brand Purpose for growth will only leave you with depressing results. Maybe the next generation (whatever nonsense they are using to call them) will prove me wrong. Until then, just do it because it's the right thing.
If you are a Gen Zer reading this and you prioritize Brand Purpose with the products you buy. You're in good company. Thousands of "The Silent Generation," "Baby Boomers," "Gen Xers," and "Millennials" do too! Just know that you are rare, and your principles don't impact the growth of your favorite brand.
Look, if you make soap, it's ok to just make soap. We all need soap. Maybe your soap will cleanse us of all the Brand Purpose bullshit.