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Davis Brand Brief: April 2014

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April celebrates Autism Awareness Month, Earth Day, Denim Day and One Day Without Shoes, to name a few. In this spirit, this month’s Davis Brand Brief explores brands that care about communities, consumers and causes, and looks at how caring can ultimately drive a brand’s bottom line. Want to weigh in on the conversation? Share your thoughts with us on Twitter. #brandsthatcare

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STRATEGIC 

Purpose Drives Strategy

Remember the day when having – or even simply promoting – a recycling program was a feather in a company’s social responsibility cap? Today, CSR means something entirely different. The 2013 Cone Communications/Echo Global CSR Study states that one in three global consumers believe businesses should change the way they operate to align with greater social and environmental needs, and nine out of 10 want companies to go beyond the minimum standards required by law to operate responsibly and address social and environmental issues. It’s no wonder some of today’s most successful brands are platforms for purpose.

How “purpose” is defined and executed in corporate boardrooms and consumer minds, however, varies. In this time of shifting notions and definitions, companies and brands are working to be as socially relevant as possible. Take consumer goods giant, Proctor & Gamble for example. It recognizes the importance of defining purpose to inform strategy while simultaneously applying it to brands, messages, employees and consumers. Rival Unilever applies similar thinking, considering strategic and creative implications alike and “Crafting Brands for Life.”

At the same time, with trust and transparency as key elements of brand success, industry-defining decisions based on purpose-driven brand strategies are front and center. Take Chick-fil-A committing to antibiotic-free chicken and CVS banning tobacco sales in their stores. Each major move illustrates the alignment of commitment to consumers with their core values, and both are a clever combination of corporate leadership and consumer activism.

The strategic implication of purpose goes beyond marketing plans and budgets to hiring practices. Potential employees now include a company’s social stance as a leading factor in choosing where to apply. In much the same way as consumers demand that brands participate socially, future business leaders view purpose as more than just a “nice to have.” Yet another reason why Google receives over one million job applications each year.

Caring is a brand strategy that happens both off- and online. In the same vein as the Internet of Everything, the Internet of Caring Things is yet one more way consumers can interact directly with brands that care – quite literally – about our safety, physical and mental health and family wellness.

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ECONOMIC

Purpose Drives Profits

Today, successful brands must care about both their bottom line and the issues facing their communities and the world. Some say the triple bottom line – people, planet and profits – is moving from fad to standard. This shift can be seen in the emergence of Certified B Corps and Benefit Corporations. These relatively new business entities are required to use business to generate social and environmental advantages. Already, more than 950 companies have become certified B Corps across 60 different industries. As the millennial workforce grows, we may witness these ‘companies with a conscience’ leading, not just participating in, the conversation.

At end of the day, purpose drives profits. In today’s purpose-driven economy, the imperative is to have corporations engage in economic recovery and success while also investing in their communities. Proof positive are successful initiatives such as A Billion + Change and organizations like Net Impact that motivate and drive change from the inside out and the outside in. Companies like Salesforce have built their business model on the notion that integration of time, talent and treasure has a greater impact on local communities.

Companies such as Whole Foods, Beautycounter and Patagonia generate profits while trying to make the world a better place.  Each is a great example of the triple bottom line. Understandably, however, these companies feel the pressure of fulfilling a purpose while at the same time making money.

It makes sense that what remains to be seen is whether brands that do good also do well over the long term. There are many theories that exist, but the verdict is still out. While there are many businesses that are very successful while leading with commitment to the community, whether it is the chicken or the egg is the economic model that has yet to be proven.

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CULTURAL

Purpose Drives Purchasing

In last year’s Consumers Who Care Report released by Nielsen, half of all respondents said they would be willing to reward companies that give back to society by paying more for their goods and services. There is such a pull these days for consumers to make good decisions about where they shop and what they buy based on the brand’s commitments and reputation. In fact, in some cases, shopping responsibly has become a substitute for charitable commitments.

Collaborative initiatives like the RED Campaign, trend-setting brands like Livestrong (despite its current challenges and scars) and startup brands like StandUp all engage the consumer marketplace to fund social change, and more corporate brands are following suit.

Nike devoted an entire new brand to support its strong commitment to equality in sports, naming their wildly popular #BETRUE brand the seed funder for the LGBT Sports Coalition. Thanks to this effort, Nike donated $200,000 in profits to the coalition, enabling this group of like-minded organizations to collaboratively address bullying and bias at all levels of sports.

TOMS “one for one” business model has made a significant impact both on consumer fashion and those in need, donating shoes, prescription glasses, and now clean water to communities and countries around the world. In addition to their well-known blue and white branded merchandise, TOMS also launched the TOMS Marketplace late last year, lifting up the work of over 30 different socially conscious companies that model TOMS thinking.

Starbucks is one of the strongest examples of a consumer brand that has earned consumer loyalty based on its principles. The Starbucks brand is built on the culture of its home community (Seattle) – one of sustainable, compassionate and respectful values. These ingrained principles determine the way the company treats its customers, employees and community partners.

Good has built a media brand around the notion that a culture of caring has a place in the conversation, developing “creative solutions for living well + doing good.” Its annual Good 100 was sponsored by the Gap this year, highlighting their commitment to telling the stories of their own philanthropic initiatives and utilizing its consumer platform to amplify Good’s messages: #letsdomore

Honey Maid also recently amplified cultural sentiment with their lauded concept of “wholesome.” As brands today make bigger and bolder moves based on social issues, consumers echo their sentiments, engaging with brands as badges.

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CREATIVE

Purpose Drives Purchasing

As we explore the notion of brands that care, the importance of how brands tell stories visually and creatively is key. A global standout is Thai Life Insurance which utilizes a purely social message to illustrate a campaign that believes in good and highlights a commitment to the real stories of real people. Domestically, Honey Maid literally turned the stories and hate mail it received in response to their “This Is Wholesome” campaign into artwork and a responsive commercial that sent waves through social media.

One brand that builds success around the notion of creating with purpose is Social Imprints. Not only does it create premiums, graphics and merchandise for successful brands, but it also has its own social mission that tells a great story.

Lifting up stories of social issues is what Upworthy exists to do. Recently, however, they steered away from the traditional advertising and revenue model, developing an ad platform with Unilever that directs readers to issues that Unilever and Upworthy are passionate about. This is reminiscent of the content partnership that Chipotle has with the Huffington Post around healthy and sustainable eating, leveraging its corporate commitment to “food with integrity.”

When a brand tells its story of caring through inspired retail design, consumers are drawn into the message while shopping. Eileen Fisher has taken this to a new level with its store on Fifth Avenue, encouraging shoppers to learn about the company and participate in its commitments to community while buying something fabulous. It’s true: caring can be very chic.

As brands increasingly leverage their commitments to the community to tell brand stories, there is growing skepticism among the public that they are being socially responsible and supportive because it’s trendy, or because it sounds and looks good. This all boils down to a matter of trust, and is a critical issue for brands to understand and explore. While a few business leaders are examining the importance of this, others should also think about how they engage at all levels to bring their brand messages to a more trusting place.


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