Align your Brand Purpose with your Customers’ Purpose
Doing things on Purpose
Purpose is not a new concept. The Oxford dictionary defines Purpose as ‘the reason for which something is done or created.’ Your brand’s purpose should be reflected in your corporate culture as well as in your outbound marketing communications. It makes sense for so many reasons – most of all, if done well, it will drive your bottom line!
But how do you really get a grip on the way customers view your Purpose? The question is worth investigating because if you invest in understanding why customers do what they do, your business can tap into that which is important to them - and embed their Purpose into your overall customer marketing program.
A coming out party for Purpose is happening now
We’d like to believe that all successful businesses have a responsibility to society in their DNA. The good news is that a 2019 Fortune 500 CEO study showed that only 7 percent of CEO’s believe their companies should “mainly focus on making profits and not be distracted by social goals.” Since the coronavirus, the emphasis on social awareness, environmental action, and other causes has spiked even further. The time is now!
A McKinsey report stated that “Purpose can generate top line growth (or serve as an insurance policy against revenue slippage) by creating more loyal customers, fostering trust, and preserving your customer base. At a time when 47 percent of consumers disappointed with a brand’s stance on a social issue stop buying its products—and 17 percent will never return.
Harvard Business Review (HBR) released an updated research paper that constructed measurement between financial performance and Purpose. In the study Corporate Purpose and Financial Performance, it was established that companies with high Purpose outperform the market by 5%-7% per year, grow faster and have higher profitability. This is indeed a factor for the sceptics to consider! Ignore these trends at your peril as consumers today are not prone to let you know when they feel they are not being heard - particularly Millennials and the growing cohort of tech-savvy Gen Z who are entering adulthood.
Customers care about Purpose
Consumers feel a keen sense of loyalty toward companies that prioritize and communicate their Purpose, and their buying decisions are influenced as they identify alignment. For example, 79 percent from this survey said that supporting companies that have similar values is a way for them to show the world they care.
Today, more than three-quarters (76 percent) of consumers believe it is no longer acceptable for companies to just make money; they expect them to positively impact society, as well. And although the majority believe companies should address issues that impact – or are impacted by – the business directly, such as the environment or human rights, the scope of a responsible business extends even further than this.
Rather than a brand or loyalty program choosing just a few charities that they think are important, we believe that the model needs to be turned on its head, putting customer preference for their favorite causes before your own. Offering choice in reward options is important. How about letting the customer decide what THEIR Purpose is – whether this be to use their cashback to take a much-needed holiday or by simply supporting their local kindergarten. Now there’s a case of personalisation 101!
After all, it’s the customer who has earned those rewards, so why not let them choose how they wish to be rewarded or support the cause that is closest to their hearts – whether local, national, or international or relating to health, children, the elderly or animals or whatever it is that touches their heart...
Turning Redemption into Retention
The financial value of unredeemed reward points is massive. The Wise Marketer estimates that the level of unredeemed liability for bank card programs in the US alone is more than $80 billion as of 2020. The global total is much higher and continues to grow each year. Providing multiple paths to redemption means that not only are customers happier, but brands also benefit through greater capability to manage their deferred loyalty program liability and protect their bottom line.
For most marketers, reward redemption is viewed as the “second cousin” to member acquisition or earning activity. A reward is simply an enticement for the customer to make repeated purchases, and then the brand must follow through with its promise when the customer completes a redemption activity. Redemption is not, however, the “reward” at the end of a series of actions. It is actually the prime mover of a loyalty program. It is redemption, not earning, that is the engine driving repeat engagement and strengthening the relationship between customers and brands. The experience and satisfaction of getting a reward is what really motivates your customers
. This is where true engagement is now heading…
Embedding Purpose into your Loyalty Program
In 2023, it is well recognised that ‘cash is king’, so providing your customers with the flexibility to redeem rewards via cashback is key to lifting engagement, retention, and growth. By allowing customers to support the Causes that they are passionate about takes engagement to the next level. And in a marketing world increasingly fragmented through the myriad of messages delivered through multiple social media channels, getting closer to your customer’s Purpose is an increasingly important objective.
Creating sustainable purchase habits and boosting overall brand engagement and loyalty is where we should be focusing. Coupled with a carefully calibrated communications plan as part of your overall loyalty strategy, opening options that encourage more frequent redemption can properly refocus your marketing program on the retention of customers – and then towards customer acquisition once you’ve truly aligned your brand Purpose with your customer’s Purpose.
Ivan Schwartz is CEO, Points4Purpose firstname.lastname@example.org
Click this link to join us for the Points4Purpose US launch on 1st June 2023 in New York, NY