When brands pursue sustainable behaviours, everyone wins, says Harish Bhat, explaining why customers are drawn to purpose-led brands
Last year, Croma, the electronics retail chain of the Tata group, announced a new initiative. It began encouraging consumers to bring back their old, unusable mobile phones or laptops, and deposit them in bins kept in the stores. Croma committed to ensuring that these old electronics goods are then recycled in the best and safest possible manner, to minimise toxic waste. The bins began filling up very fast, much quicker than expected.
Not only did the first phase of this programme receive an excellent response, the management discovered, very interestingly, that this programme also increased consumers’ preference for buying from Croma. When consumers realised that Croma was doing something good and purposeful for the environment by helping clean up waste, they also preferred to shop there. Here was a unique win-win-win situation for consumers, for the environment, and for Croma.
This story powerfully illustrates an important lesson I had separately learnt. In 2015, I was a member of the global advisory council of a large consumer research study titled ‘Insights 2020’. This study was led by the market research firm Kantar Millward Brown, and the objective was to understand how companies and brands could drive customer-centric growth. What did we find?
We found that for outperforming companies the world over, traditional value drivers — such as basic product quality parameters, packaging or reach of sales and distribution — were of course important, because consumers like you and me want to buy products that provide us the required quality and functional value. But these basic parameters no longer provide brands with competitive advantage, because multiple competitors now have the capability to provide these same quality levels to consumers. What really led to outperformance and business growth were a few critical drivers of customer centricity. And the first of these drivers was being purpose-led.
The Insights 2020 study found that when companies or brands were clearly linked to a purpose, 80% of them outperformed the market. Whereas for companies or brands which were not clearly linked to a purpose, only 32% of them managed to perform better than the market. This is a startling, but very compelling result.
Think of brand Tata, whose strong purpose, embedded in its commitment to the community, has remained unchanged since its foundation 149 years ago. Think of Amul, which has had a clear purpose-led mission ever since its birth, committed to the betterment of dairy farmers and cooperatives. These are brands which have outperformed their competitors and won the hearts of their consumers, because their sense of purpose is so clear and well known.
This led me to think: why do consumers prefer brands with a purpose, and brands which promote sustainable behaviour? I think there are four key reasons for this — connect, conserve, commit and clean up.
Many consumers wish to connect with a larger purpose through the brands that they use. They are not content with just the functional features of the product or service they buy, but they would like to feel they are an integral part of a larger, positive, uplifting mission through the brands that they use.
A very good example of this is Tata Tea. In addition to providing consumers an excellent cup of tea, Tata Tea also invented the civic awareness platform ‘Jaago Re’, which has dealt with civic issues such as corruption, gender equality and pre-activism. Jaago Re has helped middle-class customers across India connect with a larger purpose which they feel strongly about. And over the years, this has also helped Tata Tea establish itself as the favourite tea of Indian consumers.
A large number of consumers also have a strong preference for brands that help them conserve resources in their own personal lives. The resources they conserve could be water, energy, food, or medical resources. This helps them personally, and it also helps conserve the resources of our planet. An example from within the Tata group is the wonderful success of Tata Salt Lite, the low-sodium salt from Tata Chemicals. Over 30% of all urban Indian adults suffer from high blood pressure, an ailment whose treatment requires significant medical resources. Tata Salt Lite helps you conserve your health because it enables you to enjoy tasty food while simultaneously keeping your sodium levels well under control, thus helping prevent high blood pressure.
A third reason why consumers prefer brands with a sustainability led mission is because it helps them personally commit to a cause that they consider important to their own lives. This happens when the brand’s mission is aligned to the very same cause that is so important to the consumer.
Think of Nike and how it promotes the sustainable cause of fitness. You wear a Nike shoe and you develop an athletic mindset, the desire and drive to ‘just do it’. The brand stands proudly for this cause, and it helps consumers commit to fitness when they use Nike products.
The final reason why consumers prefer brands with strong sustainability agendas arises from our awareness of the ecological damage that businesses and brands can cause to our planet. People today are aware that many types of plastic and other materials are non-biodegradable and will harm the planet. They know that some effluents can pollute. And people do not like this ecological damage. Therefore, they prefer to buy into brands which can clean up the mess that they create, or at least minimise the mess.
The Croma story with which I began this article is an excellent example of helping consumers clean up. If you have a Croma store in your town, you may wish to use these bins too!
Are there any other reasons why you like brands that have a sense of purpose? Do write in at firstname.lastname@example.org, I would be delighted to hear from you.