Social marketing and sharing have become a key driven of business success.
Many, however, don’t appreciate how much this shift in our communications infrastructure and approach has not just changed how we market our businesses but the type of businesses that succeed.
Purpose is becoming an increasingly important driver of consumer behavior and business success, in large part because purposeful businesses are better adapted to this new era.
The evidence is all around us for anyone paying attention.
Just in the past few months we have seen The Business Roundtable, an association based in Washington, D.C. whose members are chief executive officers of major U.S. companies, declared that the purpose of a corporation is not just to serve shareholders (their official position since 1997), but “to create value for all our stakeholders.”
Unilever has announced that “Purpose underpins our business.” They are busy “embedding it into every part of the company.” And this isn’t just about a feel-good story. Unilever’s latest figures show that it is their purposeful brands that are driving their growth. In 2018 their 28 Sustainable Living Brands – which they define as “those taking action to support positive change for people and the planet” – grew 69% faster than the rest of the business and delivered 75% of their overall growth.
Big companies have also continued to pursue “B Corp Certification” - a third-party assessment of your ethics and impacts as a company – including the recently-certified Intrepid Travel, Katmandu and Danone.
It’s easy to understand why these businesses are proactively embedding purpose into their business model. In a survey conducted by market research company Core Communications, 71% of consumers agreed they “would be more likely to purchase from a company that supports a cause they care about.” A recent survey from the consulting firm Deloitte shows that 72% of employed Americans say they would prefer to work for a company that supports causes when choosing between two jobs that offer the same location, pay and other benefits. For millennials, these numbers are even stronger. In another survey, 93% of millennial workers said that they expected businesses to have a social commitment; a mere 7% agreed that the only job of business is to make a profit.
In other words, the 'purpose economy' is already here. Right now, it is unevenly distributed and poorly understood, as the future often is. But in the coming years the purpose economy will redefine how we conduct business and derive meaning in our lives.
If you are a company leader and want to avoid newer, more socially-minded startups superseding you, you need to be paying attention to this trend. And if you are an entrepreneur who intends to put those old companies out of business, you also need to understand how purpose is re-shaping the business environment.
Each of you has an incredible opportunity to be an early-adopted of this wave, rather than swept away by it.
I believe we are at a similar moment for the purpose economy as we were with the Internet economy 20 years ago. Most don’t yet realise the impact to come. Those who do are already deriving significant tactical advantages which will soon become huge strategic advantages. And then they will emerge into the new business-as-usual.
While this can seem like a story about evolving cultural mores, it’s really a story about evolving communications technology.
The last ten years has seen a huge shift in the way we market products.
Where once marketing was all about interruption – find the right audience and paying to interrupt them while they’re doing something else (watching TV, at the movies, reading a magazine, shopping, etc) – today the most effective marketing is the art of inspiring people to share your story for you.
Sharing is fundamentally how communications and marketing works today. You don’t want to simply interrupt your community; you want to inspire them to share your story for you. And in this new environment social businesses have an intrinsic, almost unfair, advantage.
Social media is the greatest tool for sharing that has ever existed, but that's not much good if your story isn't worth sharing. Social enterprises make products that are inherently more worth sharing than regular products, because doing so communicates more. In sharing the fact that you have purchased from a social enterprise, you are sharing your values and beliefs. In so doing you are also likely inspiring others to join you in supporting that enterprise, fueling their growth.
Fast-growing businesses are succeeding by mobilising passionate communities around them by offering a product that is not only high quality, but which stands for something. When products stand for something, they activate a wider set of emotions, and they inspire greater sharing.
As Blake Mycoskie, founder of TOMS Shoes says, “people buy stories, not products.” Blake discovered that his customers would sell his product for him, not because it was the most stylish or lowest cost but because it resonated with their values and gave them the opportunity to share those values.
Here’s how Blake describes getting the first boutique to stock TOMS in his book, Start Something That Matters: “I went in and told her [the buyer] the TOMS story. Every month this woman saw, and judged, more shoes that you could imagine. More shoes than American Rag [the shop] could ever possibly stock. But from the beginning, she realised that TOMS was more than just a shoe, it was a story. And the buyer loved the story as much as the shoe, and knew she could sell both of them.”
Consumer participation in spreading their message is the marketing Jiu Jitsu social enterprises are using to successfully launch and grow. Instead of using brute force to spread your marketing message; you leverage and focus the energy of others to create your impact.
Technology is the enabling environment that is bringing the purpose economy into being.
It is the toolset used by smaller social enterprises as they out-innovate and out-compete established businesses. First these new technologies allow us to transmit and share our values in a new way. Then our newfound interconnectedness changes our values.
Consumers, empowered by technology, are pulling back the veil on destructive company practices and supporting businesses that are a force for good. Whereas being an ethical consumer was once a laborious chore new tools are making it easier and easier.
In today’s world, if you’re not extraordinary in some way, if you don’t have a story that engages and inspires, you will be ignored.
As the marketing guru Seth Godin said in his book Purple Cow: Transform Your Business by Being Remarkable, “In a crowded marketplace, fitting in is failing. In a busy marketplace, not standing out is the same as being invisible.”
When you have a purpose beyond profit you become extraordinary, you stand out, and your message gets shared.
And if you don’t?
You’re likely to be left behind.