Exclusive: Brands' lack of purpose endangers consumer relationships, Edelman reports

Other than making money, what does your brand stand for?

That’s the question consumers are increasingly asking about the brands behind the products they buy. And according to a new study from communications marketing firm Edelman, companies are failing — spectacularly — to provide adequate answers.

Brands have long relied on claims of effectiveness, value or exclusivity to attract loyal customers. But the modern consumer is looking for more than just tamper-proof bottles and affordable jeans, the study said. They want relationships with brands that reflect their values and create positive change in the world. A narrow focus on the classic purchase funnel from Marketing 101 is blinding brands to greater possibilities, when they could be engaging with fans and followers in ways that can enhance both their reputations and their bottom lines.

Edelman’s 2016 Earned Brand Study asked 13,000 consumers in 13 different countries to rate their relationships with brands across 18 market categories. On average, brands worldwide scored only 38 out of a possible 100 points. Of the seven metrics measured, companies scored lowest on listening openly, telling memorable stories and acting with purpose.

"We’re talking about a brand having to do something as opposed to just say something," said Richard Edelman, president and CEO of Edelman. "It’s moving away from image as the driver to action as the driver." Customers want brands "to act, to be activist, to somehow take on the big issues of the time."

Consumers want to feel that companies care about them and the issues that are important to them. They’re asking questions like "Are they listening to me? Are they giving me stories that are from peers?" Edelman said. "Do they have a purpose at the core? Do they source properly?" It’s no longer just a perk customers can get from socially responsible companies — they’re expecting it from everyone. Sixty-two percent of respondents said they wouldn’t buy a product if the brand failed to meet societal obligations.

But when companies have the right answers, consumers reward them. "Beyond being willing to buy, it’s being willing to advocate and defend the brand if it’s in trouble," Edelman said, as well as creating content and recommending the brand to peers. He cited REI’s "Opt Outside" initiative, which closed all 143 of the outdoor equipment retailers stores on Black Friday last year, giving employees a paid day off and encouraging customers to spend the day outside. That resulted in 1.4 million online customer interactions.

CVS took an even bigger risk when the pharmacy chain became the first in the US to ban cigarettes, forgoing $2 billion in sales. "And yet, it gave them permission to change their name to CVS Health afterwards and create a whole new category of health services and vaccines," Edelman said. "Those are big, bold ideas." (Both REI and CVS are Edelman clients, as is Dove.)

That kind of buy-in from consumers is what the study refers to as "committed" relationship. Committed consumers interact with a brand on social media and want to try new products and services when they’re introduced, welcoming overtures from the brand itself. "Today, the more effective brands know about the importance of responding, and that’s changed a lot of the dialogue that consumers have with brands," said Michelle Hutton, COO of Edelman Europe.

Those committed consumers will also happily share personal data with the brand, and they’re willing to offer the benefit of the doubt if something does go wrong and the brand suffers a crisis. "Consumers are willing to go much farther and deeper into a relationship with their favorite brands than has probably been the case before," said Tonia Ries, SVP and executive director of Edelman Square, which produces the firm's reports.

The study did find that not all products are created equal. Categories like automobiles, luxury goods and social media scored much more highly on the Relationship Index than products like over-the-counter medications, utilities or household goods. That makes sense — people are naturally more emotionally invested in expensive or publically-facing purchases like fashion or travel, Reis said.

But that does offer an opportunity for brands in less highly-regarded categories to distinguish themselves. "There’s more social currency in my car or my luxury goods or my fashion choices than there is in my choice of soap," Reis said, "which is one of the reasons why the Dove Real Beauty campaign is so brilliant."

And like Real Beauty, the best campaigns let consumers view the purchase as something more than just a selfish transaction that only benefits one person. "It’s about a community," Edelman said, "moving from purchase model, which is very much about ‘me,’ to the new territory, which is about ‘we.’ It’s about doing things together with the brand.

"Now, it has to be what the brand does with me, not just for me."