Decoding brand purpose


Published in WARC Admap, June 2018

What is it that caused a local Swedish peer-to-peer application, Swish, to be perceived as more purposeful and innovative than Google in just a couple of years? Why is having committed employees correlated with people’s belief that a company will have a clear role and be popular in the future? Why is it not enough to perceive sustainability as purposeful? And why is it important to create progress with purpose?

In this article, we will discuss these and many more questions as we decode why purpose is important and what it is that makes a brand purposeful.


Why is purpose important?

Purpose drives preference, which in turn drives business

Brand Purpose is the glue that keeps it all together – your customer target group, employees, societal stakeholders and the creation of new business. It defines the role your brand plays in improving society and people’s lives. It is the sense of direction that makes your employees passionate about what they do and what causes your target customers to love and connect with your brand.

At Lynxeye, we have been conducting research on the subject of purpose for several years. What we have found is that brands that are perceived as purposeful also enjoy a higher level of brand preference. In other words, people prefer brands they see as purposeful.

They also believe, and rightly so, that they have a better chance of being successful in the future. In earlier studies, we have found that preference in turn is correlated with brand share. This connection between perceived purpose, preference and business makes perfect sense when we look at top-performing brands in the marketplace. Companies such as Google or Tesla all have a clear brand purpose. In the specific case of Google it is to “organize the world’s information and make it universally accessible and useful”, while Tesla’s purpose is to “accelerate the world’s transition to sustainable energy”.


What makes a brand purposeful?

Every year, we conduct our Purposeful Brands study. The study measures consumers’ perception of brands and how purposeful they are. What we have found is that purposeful brands have the following in common:


  1. The brand is trusted

People see trusted brands as being honest and reliable, and having values they believe in. So, why is it important to have trust?

Trust has always been a central challenge to human collaboration on a large scale. Traditionally, governments and institutions have been the answer. What we have seen in the last couple of years however is an increasing distrust in larger institutions. People no longer want to follow the elite. They have lost faith in the system as it works today, and increasingly put their faith in their peers.

In this new political climate, many people believe that companies have a part to play in tackling the problems society faces. Whereas before we demanded good products, we now demand good practices. As governments cannot take on all the challenges alone, companies increasingly become the champions of progress in today’s transparent and connected society.

Today, people reward companies that have a strong purpose. Tomorrow, it will be a pre-requisite for even having a relationship with consumers. But to achieve this, brands need to establish trust.

To become a trusted brand, companies need to be honest and true to their values and the purpose they set out for themselves. Otherwise, they become merely empty words. For some, it is about having a person that embodies the qualities and the idea that you are trying to convey. Look at IKEA for example. It is the most trusted corporate brand in Sweden. Ingvar Kamprad embodied the brand he represented and thereby reinforced honesty in his company’s values. The same probably goes for Tesla and Elon Musk.


  1. The brand is responsible

At the heart of every purposeful brand is the positive impact it has on people’s lives and the world around them. Instead of focusing on direct stakeholders alone, the brand makes decisions with respect to a better society through environmental, ethical or social responsibilities.

The sustainability perspectives are profound aspects. However, purpose can go beyond sustainability. All companies that challenge, innovate and create with a clear vision of the good they will do can be purposeful.

Purpose is the essence that gives the company its soul, engages its co-workers and make its customers love the brand. And it is in this very intersection that a great purpose is formed, where it combines the values, beliefs and needs of its target consumers, its employees and owners as well as society. It is all about understanding people’s frustrations within their field and setting out to solve their problems and those of the world.

Purpose should be at the core of what the company does. It can include planting trees or donating a small share of its profits to charity, but it cannot be just that. It needs to be part of the business and its future growth. A good purpose makes employees want to go to work in the morning. It is the company’s guiding star, and guides every decision to that end. Volvo Cars is an example of such a purposeful brand from the study, with their purpose “to provide safe, sustainable and convenient mobility, making a positive contribution to society”.


  1. The brand is innovative

To be a truly purposeful brand, good intentions are not enough. To be a driver of change, a brand needs to be innovative. An innovative brand is perceived as one of the thought-leaders in its industry, at the cutting edge with a refreshing new approach. People see that the brand delivers solutions to real problems in people’s everyday lives, and thereby adds value and becomes meaningful to them.

We often say that purposeful brands are leaders of a movement for change. Not only do they strive to have a positive impact on the world, but they also establish themselves as the leaders of the change they are trying to bring about.

Truly purposeful brands do not follow what everyone else is doing, they strive to be accelerators of change in themselves. They act as they preach by falling in love with the problem they are trying to solve, not their current solution. They then continue to lead by being at the forefront of new solutions, technology and partnerships to that problem.

Looking at the digital brands that are perceived as innovative, we see some obvious cases such as Google, Spotify and Netflix. But more interestingly, a local peer-to-peer application established by six of the largest banks in Sweden in 2013, Swish, tops the list of being innovative. In just a couple of years they have established a brand that scores higher on innovation than Google. Why is that? It is because they deliver a solution to a real problem or frustration in people’s everyday lives, namely easy peer-to-peer payments, for example to split a bill. This shows that brands that deliver solutions to real problems in people’s everyday lives can quickly become meaningful for consumers.


  1. The brand is visionary

In previous chapters, we have learned that purposeful brands are perceived as existing to achieve a positive impact in the world, continuously striving to lead the movement for change while always staying true to their cause, guiding their every decision.

Being visionary is another important aspect of a purposeful brand.

A visionary brand has a higher purpose and wants to accomplish something in the future. This is clear from the goals they strive to achieve with their existence, and this makes it easier for people to understand and buy into their cause.

A visionary brand paints a picture of the reality it is trying to achieve that inspires its stakeholders whether they be investors, employees, customers or society in general.

Fortune 500 company Autoliv is an example of a visionary brand from the study. At the forefront of automotive safety technology, Autoliv’s vision of Saving More Lives provides inspiration for its employees and associates. Its vision paints a picture of how it is striving to prevent serious accidents and injuries, but also how it continuously focuses on what is important – consistency and quality for its customers, confidence and security for its employees, stability and growth for its shareholders, as well as being sustainable and earning trust within its communities.


  1. The brand is future-proof

We live in times of change. From Lynxeye’s Disruptions of Tomorrow study, we learned that the future has never been harder to predict. Markets are being re-shaped by new challenger’s innovations and digital platform brands who consolidate their customer relationship across traditional industries. As a result, many large companies find themselves pushed out of consideration, or even into a new position in the value chain. [Potential link to previous article, “Getting from being Squeezed in the Middle to Future Relevance and Growth”] Brands that are perceived as future-proof on the other hand are bold enough to embrace and create the change. People believe that they will have a clear role and be popular in the future.

Interestingly, people’s belief in the fact that a company will have a clear role and be popular in the future is correlated to having committed employees. Probably, this is linked to the need for agility as well as integrity that we see in today’s marketplace. Future-proof brands need to have the agility to constantly innovate in a changing market, especially in this new era of digital opportunity. But they need more than agility to stand for something beyond their latest product or service, something that makes their brand less easily interchangeable for old and new competitors. They need to have integrity. Integrity in what they stand for, and most importantly why they exist in the first place. To create and live through an engaging purpose provides companies with the integrity they need in decision-making in a complex market landscape.

This acts as a guiding star to which ventures make sense or not and how easily you can move into them from the point of view of the customer.

With committed employees, companies ensure that every decision is guided by their purpose. The internal passion to solve a real problem and create a better world will help companies to maintain integrity and their brand beyond their latest solution, while constantly seeking for better ways to solve it.


Summary: 5 things to keep in mind when formulating a purpose

Brand Purpose is the glue that keeps it all together – your customer target group, employees, societal stakeholders and new business. It is about having a positive impact on people’s lives and on the world around them. Purpose gives companies a sense of direction in an increasingly changing marketplace and is correlated to preference, which in turn is linked to business success.

When formulating a purpose, there are 5 things companies should keep in mind:

  1. Stay true to what you will deliver and the values you live by. Build your purpose on a shared set of values with your target customers, employees and owners.


  1. Responsibility. Set a purpose that makes your core business strive for a positive impact in the world, whether it be environmental, ethical or social while aiming for sustainability and progression.


  1. Innovation. Choose a space where your brand has the authority to be a leader of a movement. Then continue to lead by being at the forefront of new solutions, technology and partnerships.


  1. Vision. Be clear about the end-state you set out to create. Make it easier for people to understand and buy into your cause.


  1. Future-proof. Understand market change, and how your role can remain important in the future. Set a direction that engages your employees and hire people that are committed to your cause.