CX is the New Brand Purpose Proving Ground
From the Branded CX series developed for Ziba, a CX innovation and design firm. This essay was part of a four-part thought leadership initiative designed to establish Branded CX as a strategic category.
Brand Purpose (Once Again) In The Crosshairs
Some conventional wisdom is truly tough to dislodge.
Just ask those still hotly debating Nobel Prize-winning economist Milton Friedman, whose 1970 essay arguably set capitalism unfettered by social responsibility on its barnstorming path for the last decades of the twentieth century. Brand purpose generally widens the ethical lens of business to encompass society at large. If brand purpose has taken hold in the last few decades, it is only due to the growing body of results proving that brand purpose is good for business profitability, not antithetical to it. And not just marginally good—very good. A global study shows consumers 4-6 times more likely to purchase, protect, and champion companies that are purpose-driven. A vocal and early proponent of purpose-driven brands, former P&G CMO Jim Stengel, working with brand tech firm BERA, has recently found that “…high-equity brands with a stronger purpose than their counterparts generate over 30% higher value creation and 4X the pricing power.”
Research into the latest developments surrounding brand purpose shows that it's been a bumpy ride lately. Various cascading dynamics have put many purpose-driven companies in an uncomfortable spotlight, forcing a reality check on their “Why”—as in “Why are we in business? What are we responsible for beyond positive shareholder return?” Brand purpose-building consists roughly of three A’s—articulating it, aligning it with business strategy, and activating it. To do the latter strategically, consistently, and authentically is more complex now, however. Not only are there more consumer touch points in the purchase journey, but there are diverse and vocal stakeholders to consider.
Many of the headwinds purpose-driven companies are encountering come from the politicization of their corporate DEI (diversity, equity, inclusion) and ESG (environmental, sustainability, governance) policies. Consequently, there is “retrenchment” talk among the advertising punditry about those ad campaigns that, buffeted by political winds, have dialed social activist causes up, then down. Focusing on the entire customer experience (CX), from product to packaging to branded environments, events, websites, and social media, we see consistently positive trend lines of consumer desire for corporate social and environmental responsibility. We also see elevating expectations—driven by emotions—that companies will walk their talk, that evidence and experience of their brand purpose is everywhere the brand is. Creative agency Barkley found that 94% of consumers say that “supporting brands that care about environmental, social and governance (ESG) issues is as important as it was twelve months ago, despite inflation.” According to 11th Annual Conscious Consumer Spending Index of 2023, socially responsible spending has reached a tipping point of massive growth.
DEI and ESG Raise the Stakes for Brand Purpose
Businesses rely on reasonably satisfied employees to succeed. Though 76% of survey respondents believe a company’s leaders should reflect the diversity of the communities where they do business, controversies have engulfed some efforts to celebrate diversity, Bud Lite being a notorious recent example. Diversity initiatives have in some instances damaged sales and dampened enthusiasm for DEI overall. The anti-wokeist movement has snaked its way from Congress to public institutions to C-suites, and anti-DEI legislation has prompted 15% of corporations to pull back. Harvard Law School’s Forum on Corporate Governance concludes that, “While the success of efforts against corporate DEI has been minimal, the chilling effect has taken root.”
As for ESG, legislative efforts against these policies have stalled and companies are forging ahead due to positive business results. Ninety percent of companies either have or are developing a formal strategy to manage corporate environmental, social, and governance practices, Morningstar found. As for those positive results, McKinsey and NielsenIQ found a correlation between ESG-related claims and consumer spending
Brand Purpose Is The Tree, Policies and Programs the Branches
To be clear, DEI and ESG initiatives are not synonymous with brand purpose. There should be deep-rooted alignment, though, with initiatives serving as the branches on the brand purpose tree. Winning brands stand for something, as the saying goes, and propelling their success is a brand purpose that is, in effect, a cluster of expanding spheres of positive impact a company intends to make through various actions. Beyond shareholders and customers, there are always partners, vendors, the community, the country, forming, if you’ll pardon the long analogy, a mycorrhizal network (how trees support each other). In April of this year, Starbucks shared its new purpose statement, which is a master class in using language to express those widening spheres of impact:
With every cup,
with every conversation,
with every community–
we nurture the limitless possibilities of human connection.
For Starbucks, the outermost impact sphere is (nothing less than) the whole of humanity—a credible focus for a company with 38,000 stores globally. From their Annual Hot Java Cool Jazz Benefit Concerts that raise money for high school jazz programs to their newly announced Global Barista Championships and coffee experience pop-ups, Starbucks has threaded their brand purpose of nurturing human connection through a vast experiential ecosystem.
For a growing number of companies, their largest sphere of positive impact is the planet, as sustainability looms large over consumer preferences, increasing in importance as consumer age decreases (though Gen Z wants to shop brands that support mental health first, climate change second.) A 2023 Porter Novelli report showed 76% of respondents believe companies should have programs that address environmental sustainability.
Brand Authenticity Faces New Threats
The consumer desire for brand authenticity that first emerged over thirty years ago has only intensified in a culture awash in deep fakes and disinformation. As the latter increase in volume and sophistication (and the coming American presidential election will foment a blinding blizzard of post-truth era content), brand authenticity—saying what you do and doing what you say—has to be demonstrated throughout the brand’s stakeholder ecosystem and CX. Gartner predicts 80% of marketers will have to guard their brand reputation zealously due to content authenticity issues by 2027.
Globally, 63% of shoppers said that they value brand authenticity and want brands to be truthful and transparent about company environmental credentials. And yet, a survey by communications agency Markstein and Certus Insights showed that consumers don’t always believe companies’ claims and campaigns. Only 9% say they believe corporate claims about social responsibility “all the time.” Disgruntled customers are typically among the most vocal customers, and don’t only cease their patronage but encourage others to do so as well.
Why CX is the New Proving Ground for Brand Purpose
Our prediction is that the wokeist backlash against purpose-driven companies will die down, and consumers navigating the infosphere of inauthenticity will turn towards companies that prove their purpose in their CX. Brands will be doubly sure they’re built on solid foundations that require complete coordination of purpose and experiential proof of it.
Companies can step up their investment in CX design and management in three ways:
Empathy maps of what customers are thinking, feeling, and doing at each juncture of the journey and throughout the experiential ecosystem should be updated quarterly, not annually or solely at the launch of a new CX initiative. This ensures a purpose-enriched relationship between the brand and its consumers is constantly attuned to (sometimes dramatic) attitudinal changes and new unmet desires.
Define in extreme detail the experience principles that will enable brand purpose to be a co-created, deeply felt differentiating aspect of the company.
Track KPIs that are focused on how well brand purpose is performing as a dimension of CX. Benchmark purpose-focused efforts against industry benchmarks whenever possible. The Stengel 50, which found that purpose-driven companies saw 400 percent more returns on the stock market than the S&P 500, is but one.
