Research shows that by adopting a compelling purpose for their brand, companies can afford to set higher prices.
A survey of one thousand Brazilian consumers concluded that there are three groups of brands. The first group consists of those that tend to spend heavily on advertising but have a purely commercial relationship with their consumers. The second group comprises brands that manage to build loyalty and offer clear benefits to customers. And the third group is that which, in addition to serving the consumer well, creates a genuine relationship with them, usually by adopting a cause. Companies belonging to the third group are more successful in convincing customers to pay more for their products.
According to Ana Couto, CEO of Ana Couto Branding, the company that conducted the survey – which included consultations with consumers and interviews with marketing experts – the responses demonstrated that customers are attentive to the messages from brands. And they know how to differentiate genuine actions from mere rhetoric.
According to the research, telecommunications companies fell into the commercial relationship category, where the competition for customers is mainly based on price. Established consumer brands were classified in the second group – where, in addition to sales, there is success in customer loyalty. The third and most coveted column mainly includes brands from the technology and beauty sectors.
To become a purpose-driven brand, the research considers that a company necessarily needs to fulfill the functions of the first two categories – offering a product that the consumer needs and forming a good relationship with them. However, when touching on this additional sphere, Ana Couto explains that the brand begins to transcend the rational aspects that guide a purchase. The expert says that, among young people, the "cause" aspect gains importance. Among consumers aged 18 to 24, 68% are willing to switch from a traditional brand to one with a cause.
According to Ana, choosing a purpose is important because it helps brands ensure their longevity. She points out that today's leading brand can become irrelevant tomorrow. "Of the companies on Forbes' list of the biggest brands in 1955, only 12% are still in the market," she says.
When thinking about their own brand, one of the questions a company must answer is: what consumer (and global) problem does my business solve? According to Ana, the emergence of global giants like Uber and Airbnb – which shook up the urban transportation and accommodation markets, respectively – allowed them to identify unused assets and make them available to consumers.
Among Brazilian companies, the best examples of purpose-driven brands are in the beauty sector. Although Natura continues to be a benchmark with its sustainability mission, the survey showed that the connections O Boticário and Avon have established with their consumers, by addressing beauty, sustainability, and female empowerment, are also relevant. "Consumers want a dialogue with the brand, but they no longer expect the company to be charitable, to save the world," explains the executive. To find a purpose, a brand simply needs to establish a genuine dialogue on a topic relevant to its customer base.
By Fernando Scheller – O Estado de São Paulo
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(*) The TIP is a study conducted by Ana Couto Branding in partnership with Sophia's Workshop. To read in full, Click here.[:]
