The premise that companies need a purpose beyond profit is being put to test during the pandemic.
Most consumer brands have opted to some version of a “we care” message which this marketer charitably calls a “charade” that isn’t working. His observation is born out by Edelman’s spring update of its Trust Barometer, which finds that little over one third of consumers think businesses are doing well or very well at putting people and/or their financial well-being over profits.
Consumers aren’t buying it, and I wonder if they ever really wanted it.
There are ample examples throughout history of marketers misreading consumer research, from the groundbreaking failure of Edsel’s combination of every consumer desire into a single vehicle to New Coke’s confusion of taste preference with purchase habit. Just because people say they like or want something rarely delivers anything more than a loose correlation with sales, if that. It’s why political polls are notoriously wrong; we say one thing and often do another.
Just consider the inanity of this research from Accenture, which declared that 62% [of consumers’] want companies to take a stand on the social, cultural, environmental and political issues that they care about most, and that 65% based purchase decisions on the words, values and actions of company leaders.
Really? Let’s assume for a moment that those survey participants truly believed they voted for their convictions with their wallets. How did price factor into those decisions? What about performance, both promised and vetted by user reviews? Did availability play a role, or how about the lack (or preponderance) of competitive options? Could online, in-store, or after-purchase promotional offers made a difference?
Nobody knows. Instead, the Accenture research goes even deeper to report that almost half of consumers surveyed have stopped doing business as a result of its actions which, I assume, involve activities that don’t meet those aforementioned convictions. See my point above about misreading consumer research.
“Purpose is more than companies simply responding to issues of the day. It’s about having a genuine and meaningful commitment to important principles that consumers care about — such as health and well-being, natural ingredients, environmental sustainability and family connections — which inform every business decision,” said an Accenture expert who clearly doesn’t possess much actual marketing expertise.
There are ample other sources of gibberish that support this belief, from research that younger consumers prefer purpose brands (again, not even exit surveys after shopping) to gauzy analyses that brands that exhibit a purpose “beyond purely a commercial one” perform better than those that are just, well, in business. Even the Business Roundtable announced in August of last year that it had decided that a feel good purpose was at least as important as chasing profits.
The report contains one incredibly important insight that is otherwise buried in its purpose of promoting purpose: Three-fourths of consumers queried “crave transparency” into business operations.
Sunlight is the best disinfectant when it comes to company behavior, and it’s not premised on any a priori valuation of what those behaviors can or should be. Simply telling consumers and other stakeholders how business decisions impact them and the world would empower them to make their own value judgements and subsequent purchase decisions.
Pollution, employee policies, community investment, and all of the other attributes of company performance that were traditionally hidden or ignored by brand marketing are relevant now, primarily because the information is becoming more available whether or not companies want to share it (thanks to the Internet), and its cumulative effects are getting harder to ignore (climate change, generations of bias in employment and advancement, for starters).
Also, the fact that so many products and services are pretty much identical leaves consumers (and employees, investors, etc.) at a loss for ways to differentiate between businesses.
But transparency is not synonymous with doing “good works” as the Edelman research is just one hint that claims of caring and good corporate citizenship during the pandemic aren’t really helping brands differentiate or create perceptions of value.
Consider instead the new Rolls Royce Cullinan. It’s a SUV loaded built to give rich buyers the opportunity to celebrate conspicuous consumption every time they drive to the grocery store, or their servants use it. It chugs fuel, and the base model costs more than seven families in America earn in an entire year. To the company’s credit, the product and the company propaganda behind it makes no claims to any socially redeeming qualities whatsoever. Cool. Consumers can decide whether or not they want to buy it. Employees can determine how passionately they’re attached to the company responsible for making it.
Take JCPenney, which just today announced that it’s giving bonuses of $1 million or more to 4 top execs after missing two debt payments and very likely filing bankruptcy soon. Good for them. They should have to disclose that in a meaningful way to their customers, who could then decide if they want to give the company their money.
Good or bad, enough or not, my issue or your crusade, it’s idiotic to imagine companies embracing agendas beyond those that are generated by their pursuit of profit. Don’t waste everyone’s time with pretty purpose-driven marketing blather; just tell us what you’re doing and let us decide. Some people will love it. Others won’t. Maybe the most transparent companies will be the most successful (I’ve often believed that the most enduring customers are those who know the most).
I’d actually consider discounting the valuation of brands that embrace purpose marketing. It’s an Edsel.