It’s a great question – can purpose and profit work together? There is a lot of talk at the moment about brand purpose being expected by consumers as a prerequisite for their custom, whilst at the same time, there is a wish to make our lives more meaningful and possibly spend less money. There has also been a large drop in contributions to charities during the last year as people’s incomes have been impacted by the pandemic, but online sales overall have increased. So where do the opportunities lie? And how can brands and institutions approach this strange environment to make sure that the best outcomes are achieved?
We believe that purpose and profit can work together and in fact, work better hand in hand.
From profit to purpose
The new generation of customers come from Generation Z. They are practical, savvy and motivated to make a difference. They are more pragmatic than their Millennial siblings but still have the same drive towards meaning and purpose in their purchase behaviours. Accenture conducted a global survey in 2018 which revealed that 62 percent of consumers want companies to take a stand on current and broadly relevant issues such as sustainability, transparency and fair employment practices. This movement has only accelerated in the three years with the advance of #metoo, #blacklivesmatter and our personal experiences of life during the pandemic causing mental, emotional and financial distress to so many.
Brands are now looking at ways in which they can communicate their purpose beyond the making of money and creation of financial value for shareholders and for employees. And there have been some great examples such as Facebook’s #buyblackfriday and Gilette’s First Shave campaign which brought purpose and profit together, driving sales and awareness.
From purpose to profit
On the other hand, not-for-profits, cultural institutions and other purpose-driven entities have a unique need to generate profits in order to keep offering, and bettering, the services and experiences they provide to the public, responsibly and affordably. According to a study by Deloitte in 2019, purpose-driven companies see higher market share gains and grow three times faster on average than their competitors, and crucially they also have higher satisfaction from both their workforce and their customers. The Association of Independent Museums is quite clear that museum shops should not purely drive revenue; they should be profitable, but it is equally important to provide visitors with a memory of the museum and enhance the visit. They suggest looking for a profit margin of 50%, putting non-profits on an equal footing with profit expectations of high street gift shops.
So clearly there is a responsibility for profit to co-exist with purpose and drive success for non-profits, charities and other purpose-driven institutions.
But what are the 3 key things you need to ensure to create that effective purpose + profit experience?
1. Know your brand
The key to getting purpose to drive profit is being clear on your brand and values. If you know what you stand for and against, then it is far easier to create and sell products or experiences to push that forward which your customers will appreciate. It is also far easier to decide who you might want to partner with for sponsorship of events or for your communications. If you aren’t clear on your values you can easily end up creating campaigns or selling products that conflict with that and damage your brand.
2. Deliver beautiful, effective eCommerce
If you know your brand, everything follows naturally and one of the key drivers of profit is your eCommerce offer. Ecommerce can be your online store, but it can also be any transaction made for ticket sales, online or in-person events and charitable donations. All of these can be conducted via your eCommerce platform. There are many to choose from, so its best to talk to your digital agency before you start discussions with providers, they will be able to help you work out the functionality you need, the ambitions you hope to fulfil and the way your brand will be expressed via your eCommerce offer.
3. Great communications
Without effective online and offline communications, you won’t get people to engage with your profit-making activities. In some cases, if you aren’t clear about why you are pushing a profit agenda, you may get push back both externally and internally. Think of the relationship between communications, eCommerce and brand like a virtuous circle: great communications are driven by a clear purpose to generate a beautiful or useful service; a useful or beautiful service is inspired by a great brand and a great brand informs clear and elegant communications.
Purpose and profit certainly do go hand in hand, the key is to ensure that the purpose is appropriate and then the profit will follow.