In June, I joined 2,000 international brand and business leaders in San Diego for the 2015 Sustainable Brands conference, sub-headed “How now?” My mission was to find out how businesses are responding to the changing social norms around the globe.
Let’s start with a scary fact (for marketers at least). Recent research by Havas Media suggests that 73% of brands could disappear without anyone caring, 55% of people have boycotted a brand in the last 12 months and only 20% of worldwide brands are seen to have a positive impact. The pressure is on.
So, what do consumers want?
More and more, they demand business models with integrity (ie brands that don´t merely strive for the greatest profit) and brands that stand for something. Businesses are adapting and embracing the idea of having a greater purpose, as this may well be the most effective way to survive in today´s more socially-aware world.
We have seen a few first attempts – from lukewarm marketing campaigns to fully integrated business models – but it seems that the best way go about this is still to be found.
“How Now?” is therefore a timely question. Here are a few lessons that stuck with me from the week.
The purpose must come from the top
What do Brazil´s top beauty brand (Natura), America´s second-fastest growing restaurant chain (Chipotle) and the world´s third-bestselling car (Toyota Prius) have in common? They are all successfully merging social responsibility with profitability. That´s according to Freya Williams, consultant and author of “Green Giants”. Williams studied nine businesses which shattered the myth that acting in a socially-responsible way and building a billion-dollar company are mutually exclusive.
She identified that the core driver for success with these businesses is a leader who is fuelled by the deep conviction that their business should focus on purpose beyond profit.
It might sound paradoxical, but these companies have proven to be more profitable in the long run. Chipotle, Tesla, Whole Foods, Nike, Ikea, Natura and Unilever are some of the brands that have transformed themselves in recent years and have showed that it is possible to act responsibly and still be highly profitable.
When mission leads, profit follows.
Design from trust
How is this new mindset shaping traditional business models, and, even more importantly, the relationships between customers, employees and the competition?
“Design from Trust” is the new credo, according to Jerry Michalski, founder of REX and evangelist of the Relationship Economy. He argues the path to any real connection is trust, openness and ultimately, vulnerability, referring to Brene Brown´s TED Talk, The Power of Vulnerability.
“Trust is cheaper than control, more effective, transformative, regenerative, social. Trust allows us to come together.”
Real innovation is fostered in an environment of inherent trust. This is most obvious in the emergence of the sharing economy: everything from crowdfunding platforms like Kickstarter to online marketplaces such as eBay or Airbnb are all reliant on mutual trust. Michalski feels all of this is moving us towards his vision of a relationship economy.
A brave example shared at the conference was Patagonia´s Footprint Chronicles. The brand published their entire supply chain, not only revealing it to their customers, but even encouraging their competition to follow suit.
Transparency: from zero to hero?
If trust and vulnerability are the way forward, then transparency is fundamental. And some leading brands are already embracing it. Chobani, the innovative yoghurt company that grew from nothing to a turnover of $5 billion in just five years, invites people on ´virtual field trips´ through their factory and farms.
Image: Sujean Lee, senior vice president of corporate Affairs, Chobani (centre).
However, transparency is not always easy, as the well-known “Our food, your questions” campaign by McDonalds has showed. Jill Manata, VP of Global Public Affairs at McDonalds, reported that the task of gathering 42,000 questions from the public was well worth it, as the social media response campaign increased positive perceptions of McDonalds by 12%. But, she was also careful to state that there were a lot of critics, and warned that sharing in this way might not be right for every brand. “It can be daunting,” she said. Ultimately, “if you´re not resonating with your audience, there´s only so much that transparency will get you.”
Storytelling: from eco-friendly to ego-friendly
`Why should people give a sh**?` is another way to put it – a question Hank Campher from Edelman posed to open his panel on storytelling. Despite the shift in social consciousness, people still care first about themselves, then their immediate environemtn, and only after that, the world in general.
That is why, “You don´t necessarily want to lead the conversation with your sustainability message. In fact, if you want to reach mainstream consumers, it is probably a bad idea,” he states.
Guilt doesn´t sell. Being a better company is only half the story. Be relevant. Keep it simple. And fun.
The rainforest needs you by the Rainbow Alliance is my favourite example of how to tell a story that is relevant to the consumer, in an entertaining and seriously funny way.
When Michael Dickstein from Heineken opened his presentation with “Selling more by telling people to drink less”, more than one eyebrow was raised in the audience. Heineken´s take on purpose is to show their younger audience how to ´Drink Less. Dance More´. The new brand approach promotes moderate drinking – a pretty bold statement for a brewer – especially as it is a theme that is equally relevant to their consumers, as it is to the entire industry.
Being up front about problems in our society that may even be caused by your category might not feel comfortable, but it seems like that´s exactly what people demand of brands today: being straight up and open to participation in discussing solutions.
Image: Michael Dickstein, director global sustainable development at Heineken
Be honest. Be open. Embrace the challenge.
After four full days of being inspired by eclectic brand leaders in San Diego, I have no doubt that brands can embrace purpose, if they are only genuine about it.
No, this is not the “next big thing”. It is clear that ‘green washing’ your company’s image creates more harm than value and a bolt-on brand purpose brought to life through a half-hearted campaign is not credible. Meeting the consumer at eye level means there is no need to keep up the shiny façade: open the doors, embrace transparency and yes, be vulnerable.
Sustainable Brands 2015 showed me clearly that this transformation demands more than a simple shift in marketing budgets or a rewording of your organisation´s corporate social responsibility summary. It is a business challenge that urges managers to re-think the entire model of how and why we do business in the first place.
Judit is a digital strategist in the advertising and communication industry. Her consultancy, Y brand Ltd, specializes in creating value by connecting brands with purpose.