With Purpose

By
By Delia Paunescu: Assistant Editor

 
View a pdf of With Purpose


With the landscape of business changing rapidly, companies today need more than just traditional products or marketing communications to reach customers. A growing number of businesses have begun incorporating charitable works more directly into their corporate message and, in fact, their business models. According to experts, many are seeing results both positive and profitable.

In sponsoring local charities, providing employees with volunteer time or even just recycling in-house, most optical establishments have long been involved in doing good and providing community service on some level. Increasingly, though, companies and business owners are working to build the message of social responsibility into the fiber of the organization. Businesses interested in upping both their community efforts and company profile can accomplish this with relative ease and, as such, provide unlimited attention to their cause.

The term generally used to describe this new business phenomenon is “social purpose.” “A social purpose business is a for-profit business venture created to promote social change through profitable enterprise,” Stephanie Lowell writes in The Harvard Business School Guide to Careers in the Nonprofit Sector. These businesses not only aim to generate a profit, but have the added goal of directly impacting a social need while doing so—what Lowell calls “a double bottom line.”

“While it might be said that the purpose of business is to create economic value, what we’ve proposed is that it is intertwined with societal benefit,” David Zapol, director at global social impact consulting firm FSG, based in Boston, told Vision Monday. “Any company that is creating value has an opportunity to look for that overlap between business and the social needs that it is addressing.” He cited in an article titled “Creating Shared Value” written by the founders of FSG and published in the Harvard Business Review in January 2011, which stated that the capitalist system is under siege and “businesses are caught in the vicious circle of diminished public trust and outdated approach to value creation.” Zapol added, “The economic downturn has been a big part of the shift. Business as usual isn’t enough anymore. Is pure profit motivation enough to ensure a sound economy? As part of society, companies that embrace their role in addressing social problems are able to identify new product and market opportunities. In this context, consumers increasingly demand that companies play a part in their local and global communities.”

It seems that consumers agree. Findings from the public relations firm Edelman Business + Social Purpose’s 2010 “goodpurpose” study show that 69 percent of consumers globally believe corporations are in a uniquely powerful position to make a positive impact on good causes. That number jumps to 80 percent in the U.S. Similarly, nearly two-thirds of global respondents (64 percent) believe it is no longer enough for corporations to give money, but rather they must integrate good causes into their everyday business.

Global business chair Carol Cone, at the New York City-based Edelman firm, told Vision Monday that all companies today must have a component of a social issue knitted within their operations. “There’s a lot of choice in the marketplace and a lot of social challenges that aren’t being addressed by the government. Businesses are finding they can have more humanity by tying themselves with human values,” she said. Over the past years, goodpurpose data showed that 86 percent of respondents felt companies should place an equal emphasis on social interests as well as business ventures. Referencing information from the forthcoming 2012 survey, Cone added that the trend is continuing to get stronger due to the transparency required of companies by today’s consumer.

 
The challenge for companies today is to reinvent and rebuild their industries in a way that does good in the world, be it going carbon neutral or redesigning your supply chain to ensure sustainability is factored into every step. Doing good is no longer just in the domain of the elite who can afford more expensive products. Today, companies can save money and find their innovative edge by asking the question and pursuing the idea of Making Good.” —Dev Aujla, founder of MakingGood.org

Though some business experts implicate the economy, the history of causal business practices didn’t develop with the latest recession. Years ago, corporate social responsibility (CSR) started out as a transactional relationship between a brand and a nonprofit, Scott Beaudoin, SVP, deputy consumer practice director and North America director of cause marketing/CSR for public relations firm MSLGROUP in New York City, told Vision Monday. “Back in the ‘80s, supporting the cause was about developing that emotional connection to drive sales. Business now realizes that there is shared value in societal organization and causes that are relevant to their consumers. Corporate social responsibility came into light because society started turning to companies that were being good corporate citizens,” he said, adding that purpose and profit are no longer mutually exclusive. “All stakeholders expect businesses to be in business to make a profit but they should be doing it in a purposeful way.”

 
As the idea of social purpose marketing is catching on with corporations, consumers are responding to the trend and sometimes are even ahead of it. In the most recent Social Purpose Index from MSLGROUP, 96 percent of Americans say they can identify two to three causes that are important to them personally. Curiously, only 37 percent of Americans have actually purchased a product associated with a cause in the past year. The Index suggests that the gap between socially-conscious consumers and their actual cause-related purchase decisions can be explained through heightened skepticism, or “a result of many companies supporting causes that don’t necessarily make sense for their business or their brands.” MSLGROUP’s survey goes on to cite that 74 percent of Americans agree that there is often too much of a disconnect between the causes companies support and the brands and products they sell. Nearly as many respondents (67 percent) feel that companies only support causes to sell products.

Beaudoin explained: “Through the internet and social media, people today are given unprecedented access into a company and brands realize they need to be transparent and authentic. Purpose is no longer a division, but the north star of the company. CEOs and CMOs are looking at purpose as an opportunity to help lead them into the new world. In a lot of sectors where trust has been stripped away, social purpose is elevating the company to move forward by having them ask ‘How do we become more responsible citizens? What is our vision for the future?’ and then using that as a rally cry both internally and externally.”

David Lubensky, founder of Bagatto, a San Francisco-based ethnographic research firm calls the trend “self-centered consciousness.” He believes consumers want companies to meet their personal needs and positively impact society. “While consumers continue to prioritize personal and practical concerns like health, safety, price and quality, they are also looking to make a difference in the world,” he said.

 
 
“Any company that is creating value has an opportunity to look for that overlap between business and the social needs that it is addressing.” —David Zapol, director at FSG

And according to the 2010 Cause Evolution Study from Cone’s PR agency, they are looking for those brands to tell them about these differences rather blatantly. The study found that 88 percent of Americans say it is acceptable for companies to involve a cause or issue in their marketing while 85 percent of consumers have a more positive image of a product or company when it supports a cause they care about. In fact, 90 percent of consumers want companies to tell them the ways they are supporting causes; most important to respondents is economic development (job creation, income generation and wealth accumulation) and education. Put another way, the study said “more than 278 million people in the U.S. want to know what a company is doing to benefit a cause.” For now, it looks like the trend is here to stay, but only when it’s the real thing.

Nonprofit blog Shop With Meaning ( shopwithmeaning.org) was founded by Rory Wehrlie to highlight purpose-driven brands for consumers on a daily basis. He told Vision Monday that being clear, concise and transparent is key in today’s economy. “If a company has a social mission that is honest at its core, then consumers will recognize and appreciate the efforts. Demonstrating a genuine commitment to making the world a better place is at the heart of how companies need to communicate their mission to customers,” he said.

Wehrlie insisted that consumers will immediately recognize a disingenuous message and cast it away as self-serving. On the other hand, he said, “when a company genuinely supports a social cause, consumers rally behind the company and are more likely to support it, including sharing a company’s products and story to friends on social media.”

 
“Have the recipients of your good work tell the stories of what you’re doing. Then try to measure the outcomes. How many people have you touched? How much have you donated to research? What are the outcomes of that research? Employees, as well as consumers, want to know the impact of what you’re doing. Not telling them is leaving you open for criticisms.” —Carol Cone, global practice chair, Edelman Business + Social Purpose


Opposing the one-way message proliferation about a product in the past, Beaudoin of MSLGROUP reiterates that social media is today’s most important means of communication between companies and their customers. “As brands develop their opportunities to engage through digital tools, they want an authentic way to do that. In the past, they focused on traditional advertising. But engagement today is driven by a much more emotional conversation that isn’t focused on product benefits. It needs to be about human truths that are relevant to consumers.” He added, “In order to create one-to-one relationships with consumers, we must be able to identify a tension, an issue or a passion point that our consumers are going to engage in.”

According to Shop with Meaning’s Wehrlie, brands that associate intimately with a social cause can expect to see higher brand recall and increased purchase intent versus those that don’t incorporate a cause-related message. He noted that while charitable components often cap financial donations or only run for a limited time, true social purpose companies’ support of the cause increases along with sales. “There is no limit on growth since the company itself is built with the intent of making the world a better place,” he said.

Cone added, “You don’t have to be a social purpose company at the core. There are very few who can make that work. But what is important is finding an issue that makes sense and remaining focused. If you try to do too much, it won’t mean anything.” She added, “Consumers are giving companies license to communicate, they want to know what a company is doing. Make sure you remember that social engagement is a journey and talk about the successes as well as the challenges.”

dpaunescu@jobson.com