The Importance of Brand Purpose in Customer Loyalty

As consumers, we have more product and service options than ever before. In other words, more chances and more reasons to not buy yours.

Disruptor brands (ex: Netflix, Airbnb), challenger brands (ex: Away, Gymshark) and a slew of microbrands now chip away at the established, and the internet gives us access to more information from more sources than we’ve ever had.

This access has given consumers the ability to be more aware about what they’re buying and thus supporting - the opportunity to be informed not only about the product or service, but about the brand and company itself.

The ability to easily access this kind of information means that we’re living in an increasingly transparent world. Because of this, companies are having to be more conscious not just about what they make or provide, but how they impact society.

Consumers now care about what brands stand for - and it impacts loyalty.

Research published in the Harvard Business Review showed that 64% of consumers who have a relationship with a brand cite “shared values” as the main reason.

And according to a report by DoSomething Strategic, 77% of consumers say that they at least sometimes purchase products or services from a brand solely because they believe in the brand’s values/reputation and they want to support them.

2 out of 5 young people make purchases based on this regularly.

We can see this consumer mindset reflected in review sites like Yelp as well, where to provide more insight about how environmentally conscious a business is, users are asked questions like “Does this business use plastic bags?” when checking in.

So what should brands do?

Brands need to understand their purpose, authentically live it, and communicate it.

Nike’s campaign of getting women to “Dream Crazier” or Ben & Jerry’s calling the US Congress out to treat convictions of marijuana possession by minorities more fairly gives us a glimpse of these brands being about more than simply selling more of their products.

Starbucks has a Starbucks Stories page dedicated to telling stories of people in their community as well as taking action such as helping employees receive college degrees.

Forgiveness is a choice. 25 years after the genocide in Rwanda, two women once divided by war, find common ground and friendship through their shared livelihood of coffee.

All of this gets dismissed as inauthentic, however, if it’s just for an ad spot or if the company itself doesn’t treat its employees fairly. Today’s consumers find out.

Digital natives like Generation-Z in particular are good at sniffing out inauthenticity. As explained by American Gen-Z activist and National Youth Poet Laureate Amanda Gorman, “Gen-Z is very good at catching (those types of) false inserts of activism into that type of sphere.”

A brand’s purpose lies in the overlap between the company’s strengths, the collective passion of its people, and the world’s needs.

Brands with a higher sense of purpose reap business benefits too, as Kantar Consulting recently found out. Their research showed that those types of brands saw a 175% growth in the past 12 years versus a median growth rate of 86%.

That’s more than double.