Utility, NOT Purpose, Will Drive Brand Success in 2013

In the past few years, there has been much talk about purpose-driven branding, some of which was made popular by former Procter & Gamble chief marketing officer Jim Stengel in his book Grow.  The purpose-driven trend is still very much alive, adopted by many and utilized as a marketing strategy to show consumers that brands are more than engines of profit. Purpose-driven brands, at their core, serve a purpose to do greater good in the world.

Purpose Begets Business Performance
Since leaving Procter & Gamble, Stengel and Millward Brown have spent much of their time identifying and analyzing the 50 fastest-growing brands from 2000 to 2010 in terms of value and consumer preference. Research shows that people more quickly associated the 50 brands with their ideals — or purpose — than they did others. These 50 brands outperformed the Standard & Poor’s 500 by 400 percent over the decade.

One closely-related approach is the Firms of Endearment — documented in a 2007 book of the same name. The authors examine “stakeholder relationship management” and study 30 companies they deem driven by purpose rather than an all-consuming devotion to quarterly earnings.

In the authors’ view, these businesses built value for shareholders by not obsessing about them. The companies included Honda, Trader Joe’s, The Container Store, Southwest Airlines, Wegmans, Commerce Bank, Best Buy, BMW, CarMax and eBay. Lo and behold, over a period of 10 years, the Firms of Endearment wildly outperformed the rest of the corporate universe.

Why Brand Utility?
While purpose-driven marketing has certainly proven to be effective, it won’t be enough in today’s world of the empowered consumer. A purpose must do more to provide value to consumers. Brands must pay it forward, collaborate and deliver brand utility to consumers.

“Utility-driven brands are not recognized for what they do for the world, but instead what they enable consumers to do to make the world a better place.”

Utility-driven branding puts the focus back on the consumer. If I am providing utility to my consumer, I am providing for others and, in essence, paying it forward. There are several examples showing how technology can facilitate utility-driven branding.

Mobile Apps: Consumers ignore most of the apps on their smartphones. In fact,  68 percent of smartphone owners open no more than five apps every week. Of the hundreds of thousands of apps out there, only the ones providing true utility are used. As proof, I’ll note that some of the most popular apps of all time are Shazam, Google Earth, The Weather Channel, Skype, Pandora and Facebook.

Social Platforms: Consider the rise of Pinterest. Pinterest created a meritocracy of what’s visually appealing. It’s allowing brands to market themselves to consumers while they are in Pinterest’s utility-driven mindset. Better Homes and Gardens’ (BHG) presence on Pinterest shows us the power of utility. BHG has:

  • 96 pin boards, where images can be posted, including “Lovely Laundry Rooms,” “Smart Storage Solutions” and “We Love Baking;”
  • 47,854 people who follow all of the brand’s boards;
  • 350,000 who follow individual boards;
  • 126,953 followers of BHG’s Laundry Room board.

BHG is providing value to its consumers by giving them more utilitarian ideas around baking, laundry and storage. And it’s in a method that promotes sharing and drives traffic and purchase. Nice!

Brands Must Sustain to be Utility Driven
Initiatives such as Coca-Cola’s Live Positively are communicating a utility to consumers. The 120-year-old brand has always done a nice job of giving back to its communities and is now providing a true utility to consumers by rewarding them for recycling. The key to becoming a utility-driven brand is to make the effort sustaining. Brands should not simply launch a “one-off” microsite that fuels PR and marketing campaigns and, as a result, becomes temporary.

Utility-driven brands engage in ongoing efforts that are about providing the masses a way to use a brand’s knowledge, its leverage or its tools. Purpose-driven brands can evolve to utility-driven if they focus on scalable ideas that provide an inherent value to the consumer.

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Jim Price
Jim Price President & CEO