Consumers more likely to buy from brands with a strong purpose, says Zeno study

The study says that Indian consumers, 60% of those surveyed, rated making “products and services that reflect the needs of people today” as the top element of a purposeful brand

The 2020 Zeno Strength of Purpose Study, commissioned by Zeno Group is a global study, analyzing the business value of brands having a well understood purpose, has revealed a strong business benefit as consumers are four to six times more likely to buy from, trust, champion, and defend companies with a strong purpose.

The integrated communications agency surveyed more than 8,000 individuals across eight markets (United States, Canada, United Kingdom, France, China, India, Singapore and Malaysia). As part of the study, consumers rated their perceived strength of purpose of more than 75 brands. Zeno then performed a correlation and regression analysis to understand the relationship between consumers’ perceptions of a brand’s purpose and their attitudes and intended behavior toward them.

The report found that when a brand is supposed to have a strong purpose, consumers were:

• Four times more likely to purchase from the brand (45% of consumers surveyed in India are inclined towards buying such brands)
• Six times more likely to defend that brand in a challenging moment (95% of surveyed Indian consumers were likely to continue to support brands in the event that they were to make a misstep or receive public criticism)
• Four and a half times more likely to recommend (champion) the brand to friends and family (one in every two consumers surveyed in India agreed they would champion such a brand)
• Four times more likely to trust the brand

Globally, consumers in India, Malaysia and Singapore were most likely to buy from a brand with a strong purpose. France and the UK emerged as the countries most likely to trust, champion and defend a brand with a strong purpose.

The survey also found that the benefits of a strong purpose held across regions and generations, with an overwhelming 98% of Indian consumers surveyed, as against the global 82%, saying they took action to support a company or brand when they believed in its purpose, sharing positive opinions of that brand with others, encouraging others to support or buy it, or starting to buy from the brand themselves.

Rekha Rao, Managing Director, Zeno Group India, said, “India has a long and strong tradition of companies and brands acting with purpose beyond profit. Today, we can back that up with clear proof that purpose and profit are closely related. Every company needs to ask itself not just what’s the ROI of a commitment to purpose, but also what are the risks and costs from not taking it seriously, or relying purely on philanthropy.”

 In India, consumers, 60% of those surveyed, rated making “products and services that reflect the needs of people today” as the top element of a purposeful brand. In North America and Europe, respondents ranked “fair treatment of employees” as the number one element of a purposeful brand.

The Purpose Paradox

Meanwhile, while 94% of global consumers stated they want companies they engage with to have a strong purpose, only 37% believe companies today have a clear and strong purpose. Moreover, 87% of Indian consumers surveyed, as against 83% globally, said companies should only earn a profit if they have a positive impact, implying consumers have developed an expectation that brands and companies should see themselves as having higher callings than earning money and rewarding shareholders.

“By evaluating over 75 global companies, this is truly the first study of its kind directly linking the strength of a brand’s purpose to reputation and business benefits. The data proves that consumers expect companies to have a more meaningful reason for being and are making decisions about what to buy and where to work with an eye toward supporting those that share their values,” said Alison DaSilva, Managing Director, Purpose & Impact, Zeno Group.

She added, “Yet, companies are leaving equity and opportunity on the table as the majority of consumers do not believe companies today have a clear and strong purpose. It has never been more important for companies to not only articulate their Purpose, but to consistently demonstrate that purpose in how they operate, support issues and engage with all stakeholders.”

Younger Generations: Valuing Purpose

While respondents across generations recognized the strength and importance of purpose, younger generations were most likely to champion on behalf of brands with a strong purpose. Findings included:

• 91% of Gen Z and 90% of millennial respondents saying they would act in support of a purposeful brand- at least 10% points higher than other generations surveyed.
• 87% of Gen Z and 84% of millennials saying it’s a CEO, founder, or owner’s responsibility to drive a brand’s purpose- 6% to 3% points higher than all respondents.
• 70% of Gen Z and millennials saying they believe a brand should have a purpose they personally believe- 22% points higher than boomers and matures.

Across all survey questions, Gen Z led all generations in their positive affirmation of a brand’s purpose.

Therese Caruso, Managing Director, Global Strategy and Planning, Zeno Group, said, “When it comes to Gen Z – teens and 20-somethings – the stakes for brands couldn’t be higher, as many of these young people are in fact their own brands. They expect brands to live their purpose with action and to responsibly and consistently wield their economic and social power for good,” She believes that Gen Z’s number one ambition is to build a better world through the strength of collective action. Those brands that do not put authentic and actionable purpose at their core risk losing one of the most influential youth generations on the planet.

Also read-  94% purchasing power of cities available for brands