New research reveals that purpose is a key factor in driving a company’s corporate reputation. The 2018 Purpose Premium Index* from Porter Novelli/Cone finds that purpose actually drives 13% of a company’s overall corporate reputation.
In fact, 96% of a company’s reputation is gained by 3 factors: quality (65%), vision (18%) and purpose (13%). Each with a different degree of importance to customers. This research really reinforces how purpose and reputation are intrinsically linked. When one increases so does the other, and vice versa.
But, what is company purpose?
What’s not surprising is that it is quality that makes up the biggest portion of overall reputation. Let’s face it, products and services are bought to meet needs and so they must function properly, be safe, reliable and give customers value for money. Without these basic components, customers won’t invest their time, money or loyalty.
Vision is all about creativity, innovation and competitiveness as part of the experience. This extends far beyond mere function into admiration and aspiration, for example brands including Apple.
So, purpose is really about what brands say and do to foster greater loyalty and create deep connections with customers.
Let’s look at this in more detail.
The research finds that companies with a strong reputation have strong purpose scores and that the scores move together (up or down) for nearly 9 out of 10 companies (88%) that are ranked in the study. 4 of the top 10 leading companies in the US are named on both the purpose and reputation research lists. They are Amazon, UPS, Colgate-Palmolive and Alphabet.
What purpose attributes matter most to brand reputation?
The study also examines what purpose ‘attributes’ are most important to reputation. It finds that people prioritise companies that are responsible (86%), caring (85%), advocates for issues (81%), protect the environment (79%) and give back to important causes (73%).
All of this highlights that companies must ensure that they have responsible business practices. And demonstrate that they care about the communities in which they operate by supporting social, humanitarian and environmental issues.
Purpose in this sense, is about paying more than lip service to a set of values, a mission statement or corporate social responsibility plan. True purpose is all of this, embedded within a company, brand, its people and reflected in the experience that customers see and feel.
Customers think highly of purpose-driven companies and they’re more willing to buy from them and support them:
- 1 in 3 people are more likely to try a product or service from a purpose-driven company.
- 50% are more likely to switch brands from one they typically buy from.
- 50% are more likely to support a company if it plans to move into their local community.
- Customers are nearly twice as likely to read social media posts and read/skim their annual report.
- Customers are more than twice as likely to read/skim a sustainability report.
Interestingly, certain industries are “loved” or “loathed” based on the nature of their products or services, with the financial services industry, for example, falling into the bottom half of both the study’s reputation and purpose lists.
*Online survey with a sample of 6,000 Americans (2,929 men, 3,071 women, aged 18+) July 2018. Data is weighted in aggregate by age, region, income, gender and ethnicity to be nationally representative.