Brand role and purpose reach a turning point, as stakeholders look for values consistency
Purpose will guide organizations,
with diversity fully expressed
by Wayne Pan
Companies must rethink the role and value of brands. The age of being outwardly focused—that is, centered around marketing—is over. To succeed in the future, companies must recognize that how they operate will be as important as what they communicate. We are already seeing people being less responsive to brands that are all marketing and no substance.
The emphasis on things like narrative, novelty, local connections, and experience highlights how people are demanding more from their brands than just a product or a value proposition. In the future this shift in emphasis will accelerate, as people turn to companies to help facilitate meaning in their lives and search for companies that have values they can proudly be connected to, whether as consumers, employees, investors, or partners. Three converging trends have brought us to this turning point today: consumption-based activism, the rise of social networks and micro-influencers, and the demand for authenticity.
§ Activism Companies are being dragged into the political fray through boycotts and counter-boycotts that train public attention and opinion on the actions and beliefs of companies. When crises arise, many get caught flat-footed and unprepared, a result of trying to stay quiet and out of the limelight. However, people are making it clear that the era of corporate neutrality is ending; they want to know what companies stand for and support. Data shows that people today—especially millennials—believe that their consumption choices are one of the key ways that they can make an impact on the world. When every buying choice is a statement, it is not surprising that people want to make sure they are making statements they can agree with.
§ Social networks The rise of social networking and micro-influencers has also shifted interactions. Able to speak directly with virtually anyone, companies now have greater opportunities to engender deeper customer loyalty than ever before. This also brings potential pitfalls though. The speed at which information, visual and visceral—think United Airlines—can be disseminated means that at any given moment, some big revelation or embarrassing mistake can go viral, damaging the brand as well as company morale.
§ Authenticity Finally, in recent years people have increasingly demanded authenticity. Our Global MONITOR data shows that over 70 percent of people surveyed appreciate it when companies make clear what they stand for and stay true to their values. They want to trade marketing-speak and public relations for candor, transparency, and consistency. While there is opportunity here, the danger is that both consumers and employees are now much more willing (and able) to punish those who are less than sincere—think of the trouble Uber and Thinx have gotten into recently because of the disconnect between their images and their practices.
It is important to look beyond these three trends though, and to look toward the bigger coming changes that have the potential to radically alter the business environment. Among the ones we are exploring: the changing nature of work and employment, algorithms and deep learning, and the coming of fluid and complex identities. How these deep shifts play out will influence exactly what roles brands might play in the future. However, it seems clear that no matter what, brands and companies will increasingly be judged on not just how they communicate their values, but how well they live them throughout every aspect of their business.
If companies want to build brands that resonate with people in the long term, they need to have a future-forward vision—one that leans into the changes on the horizon. Two major opportunities exist where old concepts can be redefined in order to have success with new audiences: purpose and diversity.
A future of purpose and diversity
Purpose must permeate as a guiding principle throughout an organization. Purpose-driven marketing will give way to values-driven culture. Having a set of core values that all stakeholders—from consumers to employees to shareholders—can recognize and see in action will be a prerequisite for success. Just as today, these values need not be political in nature; in fact, preaching or parading values around will likely be poorly received.
While the purpose bandwagon has been crowded in recent years, much of the focus has been on grand purposes that can be promoted. This is a ploy that people are increasingly rejecting. Instead, companies must be thoughtful about what values they truly wish to stand behind—these need not be socially focused—and then stand behind them throughout all they do. The emphasis will shift to how companies operate, rather than what they say. Those that do this most successfully will build real brand-equity advantages that will allow them to be more competitive in all aspects of their business.
Diversity needs to evolve beyond demographics to reflect the real diversity within groups. The importance of having diverse workforces will increase, especially as changing demographics in many countries, and more globalized customer bases, demand that companies be more conscious and representative. The way that diversity is defined though, should change—from being about having representation from different populations to having representation within different populations. Recognizing that there is a wide array of perspectives, beliefs, and backgrounds in every group will be key; checking off boxes, for so many an end point today, will be just the beginning tomorrow.
As we have often seen—Pepsi’s very public misstep being just one of the most recent examples—attempts to speak in culturally relevant ways, if poorly executed, can do more harm than good. The price paid for being insensitive or offensive will increase, and the punishment that stakeholders mete out will be more severe. Truly diversifying the stakeholder base, from employees to partners to shareholders, is necessary in order to embed diverse opinions and viewpoints into every decision, strategy, and tactic. The companies that do this will be best positioned to not only avoid stumbles, but to build broad-based, long-term brand equity.
Brands are at a turning point, facing a future in which an expanded audience of diverse stakeholders expects companies to live their values consistently. Those that lead in reimagining how to embody purpose and embed diversity throughout an organization—looking in just as much as broadcasting out—will build the brands that are best positioned for success and they will shape the very role that brands will play in the future.