Why a Standardized Scoring System Is Necessary to Evaluate Brand Purpose

Of the many buzzwords and phrases that have infiltrated the world of marketing, “brand purpose,” if not leading the pack, is most certainly in the top five. There are plenty of brands that make a compelling case, but understanding a brand’s standing in the world and the impact it has on humanity remains mostly vague. Some companies like Chobani, Patagonia, Ikea and REI, for example, are often cited as having a clear purpose. For most companies, however, the push to brand purpose is more nuanced and harder to quantify. But could a more standardized, scientific and widely adopted scoring method be the key to unlocking a brand’s purpose? [article_summary section="1"] During Adweek’s 2019 Brandweek in Palm Springs, Jim Stengel, president and CEO of the Jim Stengel Company consultancy, presented a compelling argument that it makes sense to put some science around brand purpose. While the idea of data around brand purpose sounds good (and perhaps obvious), Stengel shared that at a CMO-only session during the event, marketers graded where the industry may stand on purpose. Finding purpose was rated a B, while activating and measurement were thought to be a C and F, respectively. “We’ve done a pretty good job as an industry trying to find our purpose, and then we’re doing ok on bringing it to life,” said Stengel, who served as global marketing officer at P&G from 2001 to 2008. [article_summary section="2"] Yet, based on research findings in the Harvard Business Review in October, the stakes are increasingly high, and the idea of purpose is a surprising driver of growth. The research, which started eight years ago, focused on companies with average compound annual growth rates of 30% of more in the previous five years. According to the article, discussions with C-suite executives found that purpose played two critical, strategic roles: redefining the playing field and reshaping the value proposition to consumers. At play was the fact that higher-growing companies didn’t feel they needed to limit themselves to simply chasing share. They opened the scope to find opportunities to connect with stakeholders in many ways. Additionally, in the face of contracting margins and commodification, changing the value proposition through innovation, new products or businesses seemed to be helpful, though it is not a quick, transactional fix and takes time to build. The long game, according to Stengel, a longtime advocate of connecting purpose with business results, is what’s critical to consider. And, due to advances in tech, it may be the right time to home in on what the data can reveal. [kickout id="1"] [article_summary section="3"] “It’s early, but people are looking at [brand purpose] from lots of different angles,” Stengel said, noting that this is where a great deal of data can be useful. “We want to look at hard data, behavioral data and financial results, and how consumers see purpose coming to life. We didn’t have the advanced analytics [seven or eight years ago, when Stengel wrote a book on brand purpose]. Our capability to understand things is so much better now.” Indeed, according to results from an early pilot program, Stengel noted that purpose is "universally important to building brands." Additionally, multicultural, female, high-earning (over $100,000 in household income) and millennials are audiences that overindex related to equity and impact among purpose-led brands. Moreover, in the study, brands with strong purpose and equity have higher return on capital (by almost 3%) and equity (more than 21%), valuation (7x higher on PE multiples) and, perhaps more importantly, total shareholder return (by more than 4%). Yet, one cautionary tale is that of whether or not brand purpose can actually be connected to results. Stengel noted that it’s still early to connect purpose and causality with financial results, though he pointed to Paul Polman’s tenure as CEO of Unilever as one bright spot. “His tenure there was [strong in] shareholder value,” Stengel said. “But he was a tireless advocate of purpose within the entire organization and supply chain. If this wasn’t working, they wouldn’t be doing it.” Many possible answers to the question of purpose [article_summary section="4"] For his part, Thomas Kolster, a Danish marketing consultant known as “Mr. Goodvertising” and focused on purpose, believes a metric can work but that it’s incumbent to look at what purpose versus transformative means. “Transformative brands look at the customer journey asking ‘who can I help people become?’ while purposeful companies as questions like ‘why do I exist beyond profit?’” Kolster said, adding that purpose is notoriously hard to measure, except at the campaign level. While stories of brand purpose continue to emerge, there is still some confusion as to what it really means—Stengel noted that to many people, brand purpose consists of philanthropy, cause marketing, social good and corporate social responsibility. Without some kind of standardization or measurement, some brands continue to poke in the dark, but some are trying. On a consumer level, financial services firm Aspiration has an app called AIM (Aspiration Impact Measurement), that creates a sustainability score and matches customers with values. Still, it is somewhat limited and measures the businesses on vague “people” and “planet” metrics. For companies, B Corp certification, which has been around since 2007, provides a framework and is a more in-depth assessment of where companies are either succeeding or falling short. Yet, it’s still not widely known, used or standardized. [kickout id="2"] “In the future, we need to have an agreement on what the definition of brand purpose is and what it entails,” said Russ Stoddard, founder and president of Oliver Russell, a social impact branding agency based in Boise, Idaho. “Certification should be done by an independent body, it should be unified and standardized and measure a company’s social and environmental impact—its brand purpose deliverables—based on quantifiable actions.” While more than 2,500 companies are B Corp-certified, the fact that it’s done largely through self-reporting and has limited verification is challenging. “[B Corp certification] has been noodled over and improved over the years and is highly-based on behaviors, actions and real-world policies,” said Stoddard, whose agency is B Corp-certified. “But it has room for improvement, for sure.” Perhaps ironically, recognition in the form of awards could be one answer to keep bringing the stories of responsible companies forward, according to Kim Sheehan, director of the Master’s program in Advertising and Brand Responsibility at the University of Oregon. For their part, this year’s cohort developed and refined checklists that home in more specifically on authenticity, courage and commitment. From there, students nominated companies they felt best represented the spirit of purpose. Some of the brands include oft-cited ones like REI, Dove and Nike, but also include the likes of Everlane and Thinkx. “I think, in some ways, an award is better than a metric because the former is sexy while the latter is not,” Sheehan said. “Any metric needs to be broad enough to assess a wide range of strategies and tactics and would probably get diluted.” “Right now, there’s a ton of smoke and mirrors, and chest-thumping, especially in the advertising industry–both by the agencies and the clients they represent,” Stoddard said. “I believe measurement of metrics that truly matter, when certified by valid third parties and reported on transparently and publicly, will get us most of the way there [in understanding brand purpose]. From here, it’s up to citizens, workers, and investors to hold companies accountable for living up to their stated brand purpose through actions rather than words.”

Brand Purpose

Why a Standardized Scoring System Is Necessary to Evaluate Brand Purpose

A more scientific method may provide more clarity

Doug Zanger

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Doug Zanger