5 Ways a Corporate Purpose Creates Massive Value for Your Business
5 Minute Read
In 2021, Patagonia announced that they would donate 100% of their Black Friday sales to environmental initiatives in a "fundraiser for the earth." They projected sales on that day would reach $2 million. To their surprise, sales rocketed to a record-breaking $10 million. Why?
As a company, Patagonia has a stated purpose to "make the best product, cause no unnecessary harm, and use business to protect nature."
Their corporate purpose resonated so strongly with their audience that they beat their sales expectations five times over.
That's the undeniable power of a corporate purpose. And that's why your business needs to define its purpose, too.
Why does your company exist?
Your business may already have a mission statement and a vision statement, but these define what your business is going to do. Your purpose is your why.
Your company's purpose is the core reason for its existence. The most successful companies in the world find a way to tie their "why" to an important value or social goal.
In fact, just 7 percent of Fortune 500 CEOs say that their companies should "mainly focus on making profits and not be distracted by social goals."
Every company, no matter how big or small, can reap five huge benefits from defining their purpose.
1. Purpose attracts more customers.
Today more than ever, consumers are spending their money with brands that have a compelling reason to exist. According to a global study by Zeno, customers are 4 to 6 times more likely to buy from a company that has a strong purpose.
Patagonia is a good example of this. They encourage repairing products instead of buying new, they actively support environmental causes, and they pledge 1% of sales to the preservation and restoration of the natural environment. The massive success of their Black Friday sales worked precisely because of the power of their purpose.
2. Purpose turns customers into raving fans.
Everything your organization does sends a message about what you stand for in the marketplace.
If you can connect with your audience on an emotional level and show that you share their values, you can transform customers into champions of your brand.
Customers are more likely to develop an attachment to a brand when it's associated with a strong purpose. In fact, they are:
4X more likely to trust the brand
4.5X more likely to recommend the brand to friends and family
6X more likely to protect the brand in times of crisis
All of these factors also lead to a higher likelihood to make a purchase, and also to repurchase in the future.
3. Purpose gives you an edge over the competition.
Your corporate purpose can give you a tremendous advantage in the marketplace, but only if you are clear about your messaging.
We've helped numerous small and mid-size enterprises create value by defining their corporate purpose. One of the biggest mistakes we've seen companies make is keeping that purpose internal, and failing to communicate it to their customers.
For example, one of our clients provides impeccable customer service. The majority of their customers are repeat customers. The company gets fantastic reviews that consistently rave about the amazing service they provide.
The problem was that none of their marketing messages ever mentioned customer service.
Even though high-quality service was one of their core values, and their biggest competitive advantage, they weren't talking about it.
We helped them articulate their purpose, which redefined their marketing strategy and had a direct impact on bringing in more business.
Any company that doesn't communicate their purpose to their audience could be missing a tremendous opportunity.
4. Purpose attracts (and keeps) exceptional talent.
Your employees aren't really driven by the desire to make more money for your company. But what happens when they have a strong purpose that gives their work real meaning?
A purpose gives your team members a reason to get charged up every day and come in to work ready to make a difference.
It improves morale and creates better engagement, which translates into better service to your customers, more innovative thinking, and greater productivity.
The corporate purpose of one of our clients is to make the spaces where we live and work into happier places. It's a simple idea, but also tremendously powerful, because it gives employees an ideal that they can rally around.
Suddenly, the work is not just about selling products anymore. It's about helping people create great spaces in their lives.
According to Mercer, thriving employees are three times more likely to work for a company with a strong sense of purpose.
In other words, if your company stands for something bigger, you're 300% more likely to get greater engagement from your existing workforce and attract high-performing new talent to your company.
5. Purpose drives better business decisions.
The success of your business is a direct result of the decisions you make. Whether it's a hiring decision, a strategy decision, an operational decision, or any other course change for your business, your corporate purpose can make those decisions smarter.
Every time you come to an inflection point about your business that affects your customers or your employees, a corporate purpose helps ensure that everything you do is consistent with what you believe and why your company exists.
Your purpose statement helps guide that decision-making process. It builds up your brand and makes it stronger when everything that you do ties back to your same core purpose.
3 steps to define your corporate purpose:
Figuring out the core purpose that defines your business isn't easy. But it is crucial to success in today's highly competitive and values-oriented marketplace.
To define a purpose that resonates for your business, ask these three questions:
1. Why do we believe our products or services make the world a better place?
2. How are we working together to make each customer's life better?
3. What are the core values that we share as a company that build a community around us?
Your purpose needs to be written down and communicated it to your audience at every opportunity. If you're not sure where to start, complete these sentences:
We believe that....
We aspire to...
We work hard to...
We love to...
Let's work together to...
Your corporate purpose matters more than you think.
A corporate purpose is more than just an idea. It tells your customers and your team the deeper reason why your business exists.
A purpose that resonates with your audience can grow your business like nothing else. It draws in more customers, turns them into raving fans, and gives you an advantage over the competition.
It also energizes your workforce, inspires higher performance, and attracts top new talent.
Every company needs to define its purpose, because it focuses your business and put you on a path to future success.
