Purpose Marketing: The New Sales Strategy

The 80/20 rule essentially means that 80% of the results come from 20% of the causes. This rule, also known as the Pareto Principle, has been commonly applied to business strategies to attract and retain customer loyalty. In business, the Pareto Principle is often communicated as 80% of your sales come from 20% of your customers, reflecting an importance on loyalty when it comes to analyzing elements that drive revenue. However, signs are showing that this rule is less applicable to customer buying patterns in 2024 and that brand loyalty is becoming a thing of the past.

Entrepreneur Steven Van Belleghem provides some valuable insights. In his blog titled, “Why Customer Loyalty is Declining and What Companies Can Do About It,” he suggests that increased digitization has created a disconnect between what customers expect from companies and what companies are actually offering to customers. Because of this disconnect, customers are focusing more on price rather than brand loyalty, which has the effect of turning brands and companies into mere commodities. He suggests that ad campaigns and marketing strategies alone will not solve this problem. Rather, companies need to have a clear understanding of the value they offer and a clear way to translate that value to their customers. 

This trend has only been exacerbated by online marketplaces like Amazon and Temu. On these sites, the brand is often much harder to locate on a product description than the price, and this has influenced customer buying decisions to become more price focused. If, upon arrival, a product has been found to be of inferior quality, Amazon’s return policy is quite convenient and automated in a way that allows for smooth refund processing. For most customers, what was once considered an “inconvenience” to shop around for the best price has become more convenient than ever before. Technology is rapidly replacing emotional loyalty when it comes to product purchases, and because of this, brand marketing strategies are not connecting with customers in any significant way. 

However, this assessment is largely apparent in established legacy brands. Many smaller entrepreneurial players have entered the marketplace with vastly different strategies, making lots of revenue with products that are priced on the higher end when compared to similar products. The issue with companies losing brand loyalty has less to do with customers becoming fixated on price and more to do with the fact that said companies have not communicated what makes their brand valuable. If a brand’s values and “purpose” does not align with that of the customer, then that brand cannot expect to do business with that customer. This type of marketing is the new sales strategy: “purpose” marketing.

Purpose-driven marketing is a strategy built around authentic values and fostering connections with their customers, whose core stances are in a similar alignment. These values could be founded in some kind of social activism or political stance, but it doesn’t have to be. The basic concept of purpose-driven marketing is to remove the idea of it being a strategy altogether, because in order for it to work, customers have to see these ideals embodied in all areas of the business. They have to feel that the values are what your business is about, and that those values can’t be compromised by excess profits.

This approach is the one that MGG Digital Consulting aims to take from the beginning. In our consultation calls, our aim is to understand not just what your goals are as a company, but why these are your goals. We want to understand the valuable purpose you bring to the table so we can work with you to craft the digital marketing strategy that best fits your brand. That could be through creating a strong focus on Ad Words to target the right customers most likely to buy from you, and it could also be crafting strong, emotionally resonant social media posts that will get picked up by the algorithms to put in front of the right users whose values align with yours. Our solutions are built around understanding how the entire digital ecosystem works, and purpose marketing mirrors that by getting brands to understand how their values must be reflected throughout the ecosystem of their company. Take a look at all our services. (here)  

There are a number of companies that have excelled at purpose marketing. The most commonly recognized example is Patagonia. This company has implemented strong initiatives aimed at reducing its environmental impact. Utilizing predominantly recycled fabrics to create durable, premium products that will either last a lifetime or go through their reuse and repair program, Patagonia is actively combating the emerging fast-fashion trends. Additionally, the company actively engages in research collaborations to address the pervasive impact of microplastics in the environment. Another company that excels at this strategy is Minnetonka. This footwear brand collaborates with Native American businesses and workers to ensure that their products are built within the culture and communities in which they originated. The high quality craftsmanship speaks for itself, but the company is also openly transparent about what materials they use and how they acquire them. The list of companies that have communicated their “purpose” is growing, from companies like Tentree‘s focus on an environmentally sustainable clothing supply chain to Balzac’s commitment to partnering with coffee roasters who have low greenhouse gas emissions. These companies have found success with consistent sales growth without having to cut corners to lower their prices.

The trick with purpose marketing is authenticity. There have been multiple instances where companies have been called out for “woke-washing.” This term was coined by marketing strategist Mark Schaefer referring to companies that tap into social issues by producing ad campaigns around culturally relevant issues but have no traceable alignment with said issues. Schaefer accuses these companies of highjacking “purpose” driven marketing strategies, writing in his June 2019 blog that “as companies appropriate legitimate social causes to sell toilet paper and televisions, the reputation of all purpose-led marketing efforts suffers.” Older marketing strategies are founded on casting as wide a net as possible to attract as many customers as possible. The new marketing strategies are more precise. These are narrow focused, targeted strategies that provide value to a specific type of customer that the company understands and respects. 

To build the high-impact credibility that allows purpose-driven marketing to work, it is important to reflect on two key points of context.

What Is Your Company’s Story?

As we have talked about in a previous blog post (here), storytelling can help build the approach that creates an emotional connection with your potential customers. Where do you come from? What made you passionate about your product or service? What insights do you have that will help you stand out from your competitors? Most importantly, why do you feel your company is the best at providing the value your customers are looking for? 

In order to build an empathetic relationship with your customers, they need to understand your core beliefs and your company’s passions and strengths. All of this can be communicated through powerful stories and powerful mission statements.

What Problem Are You Solving?

Most business gurus will advise some variation of this question to help people starting out in building a company. In this case, though, the answer is very important. Your evaluation of the gravity of a problem or issue should resonate with the emotions of your customers as well as instilling confidence in them for your understanding of these pain points. The first leads you get should be the customers that experience this problem the most. To get them to trust you, they must feel like you are an expert in how the issue starts, how it continues, and what can be done to mitigate it from getting worse. 

Providing answers to unresolved questions, meeting unmet needs, or fulfilling desires are integral to instilling customer confidence in your business. Another area of concern is understanding the market-based solution you are offering. Would people be willing to pay for this solution? If so, how can you sustainably and reliably provide it every time? Explaining your commitment with direction, goals, and guided principles is a crucial step, one that then has to be met with sufficient follow through and action.

Who Are You Selling To?

Knowing the demographics of who would buy your product is paramount. One way of understanding this is creating an “avatar” of your perfect customer. The psyche of your target customer base should be one who can relate to your story and who would benefit from the solution you are offering. There could be other aspects too, but the important takeaway is that customers are more inclined to support brands that align with their beliefs. In order to successfully provide “purpose,” your business has to tailor strategies and product offerings to resonate with these values.

Take, for instance, Generation Z, a cohort known for its strong emphasis on social consciousness and ethical considerations. For businesses targeting this demographic, a profound understanding of their values, aspirations, and priorities is essential. Unlike preceding generations, Gen Z consumers prioritize authenticity, sustainability, and social responsibility in their purchasing decisions. They are more inclined to support brands that align with their ethical beliefs and actively contribute to social or environmental causes. However, if they have no connection to a brand, they are also most likely to shop based on price. Without an authentic and transparent approach that they can relate to, marketing ads seem to have little effect on their purchasing decisions. 

As the landscape of customer loyalty evolves, shifting consumer behaviours are significantly altering the degrees to which traditional marketing strategies find success. Purpose-driven marketing is an important strategy, but it revolves around creating and adhering to foundational principles to which your company will be held accountable. It has already proven to be a success, as companies have emerged as a beacon of authenticity, forging deep connections with consumers by aligning values with social or environmental causes. Key considerations include the power of storytelling to convey ethos, the articulation of the problems addressed, and a clear understanding of who would make a purchase. In navigating this landscape, the pursuit of sustained loyalty demands an unwavering commitment to authenticity, empathy, and purpose-driven engagement, underpinned by a relentless dedication to delivering value and fostering meaningful connections.