Impact Marketing and Competitive Social Transformation are key for companies that want to endure.
Impact is the new socioeconomic ecosystem paradigm: people are looking for impact-driven solutions, organizations claim to generate high impact through their strategies and activities, investments seek impact, and public policies are designed to create an impact on society. Marketing is also moving in this direction, but what is impact marketing?
The transformation that’s coming isn’t digital: it’s social.
The pandemic has driven a significant transformation that continues to gain momentum: social transformation. The trend toward greater concern for the major social and environmental challenges facing our planet has been on the rise for some time. This new reality calls for an urgent transformation within organizations, one that runs even deeper than digital transformation itself.
Concern for social and environmental issues is no longer the sole domain of consumers, organizations, or governments—it has also become a concern for capital. We need only recall the famous Financial Times cover “Capitalism. Time for a Reset,” or the recent letter sent by Larry Fink, chairman of the world’s largest investment fund, BlackRock, to the CEOs of its portfolio companies: there will be no investment unless ESG (Environmental, Social, and Governance) criteria are met—the 3 key factors in measuring sustainability and social impact within companies.
Social transformation is also urgent, global, and necessary to steer us away from the reckless course of climate emergency and the social divide. It’s an opportunity for citizens, but also for businesses and territories. For example, New Zealand no longer uses GDP as a measure of prosperity, considering it outdated. Instead, it uses a new index, the “Wellbeing of Citizens,” which also shapes how the national budget is drawn up. This tool measures social variables such as general and child poverty, domestic violence, mental health, cultural identity, the environment, and more.
Social transformation is a tremendous opportunity for companies and brands.
Social transformation is a tremendous opportunity for companies and brands. 77% of major Spanish companies already take environmental and social impact into account when choosing suppliers. And most companies say they are aware of and working to meet the UN’s Sustainable Development Goals under the 2030 Agenda. However, now is the time to seriously begin a competitive social transformation within companies that makes economic results compatible with measurable social impact.
From this new perspective, a company unable to offer innovative solutions to challenges such as the climate crisis, an aging population, or inequality, will become increasingly less competitive.
Traditional strategies, where social goals run separately from business goals, are becoming a thing of the past. Failing to incorporate the social or environmental dimension into business strategy and innovation processes (and not just at the departmental level—CSR), creates unquestionable risks from a medium- and long-term competitiveness perspective.
Social transformation drives organizations and brands with purpose.
Social transformation is driving organizations and brands to operate guided by a purpose that goes beyond mere economic sustainability to include social and environmental sustainability.
Purpose—the reason for being beyond economic profit, as defined by Simon Sinek—works. And with it comes the growing relevance of the impact organizations have on society as agents of change. Dozens of studies confirm this: brands with purpose are the ones that grow the most, forge the most lasting bonds with their target audiences, become more relevant, attract more talent, are weathering the pandemic more successfully, and are the ones that will survive in this era of conscious capitalism where we’re about to witness the “reset” of the traditional economic system.
Purpose-driven companies build a business that fuels growth through hyper-relevance while meeting customer needs. According to Accenture, COVID-19 accelerated the adoption and integration of purpose within companies, and “those that fail to do so will be forced to rebuild their brands, values, and reputation from scratch. Or worse, they will simply disappear.”
Corporate purpose attracts talent and unlocks employee potential. It inspires new products, services, and business lines, and fosters innovative collaborations.
Brand Purpose means real, sustained actions that affect the business both internally and externally, while making a positive impact on society. According to Paul Polman, former CEO of Unilever, whose 28 purpose-driven brands grew 69% faster than those without one: “Companies with purpose create value through values.”
Impact marketing ACTIVATES, DEVELOPS, and COMMUNICATES brand purpose.
In this context, impact marketing emerges to activate, develop, and communicate brand purpose. Impact marketing connects the brand with its target audience through shared values and experiences, creating a difference from the competition that’s impossible to replicate.
Impact marketing is ethical, committed, and unique marketing, where what matters most is the trust and relationship built between the brand and the consumer through the activation of brand purpose and the development of positive social impact initiatives that demonstrate brands’ sensitivity to the world’s challenges, such as sustainability and social commitment.
Although 76% of marketing managers believe their brand already has a defined purpose, only 10% consider that purpose to be genuine and to include a firm commitment to society. A genuine brand purpose is activated both inside and outside the company. Internally, by aligning it with the corporate culture, and externally, through impact marketing in the form of long-term actions, partnerships, projects, and initiatives that have a clear positive impact on people and the environment.
Brands with an activated purpose don’t just talk about it—they act on it. They move from “storytelling” to “storydoing”. That’s why they must be authentic, because communication comes afterward and is based on what they actually do. Supporting a cause through communication alone, disconnected from the brand’s equity and business, is not impact marketing and can even be perceived as “greenwashing.”
Marketing is changing rapidly, and yesterday’s recipes for success no longer work. Havas’s latest Meaningful Brands 2021 report once again highlights that nothing would happen if 3 out of every 4 brands disappeared today. Therefore, the greatest danger for brands is irrelevance, while managing the trust of a new, more demanding, responsible, conscious, sustainable, and socially committed customer has become the greatest challenge.
The Havas report also points to a lack of consumer trust in brands. To earn that trust, companies must be willing to be loyal, transparent, authentic, and committed. According to the global Morning Consult study, 44% of consumers want to know whether a company adheres to ethical behavior before placing their trust in it. And tolerance for “washing” is shrinking: brand trust plummets when companies lie about supposedly charitable efforts (-70%), display a lack of ethics (-66%), or show irresponsible behavior toward the environment (-65%).
Impact marketing, therefore, is ethical marketing that pursues relevance, builds trust, and highlights the value of brand purpose. Impact marketing speaks to the impact a brand aims to have on people’s lives and the world they live in. And it doesn’t apply only to communication, but also to projects, initiatives, and partnerships.
It’s clear that the ultimate goal of brands is to be relevant and earn their consumers’ trust. And this can only be achieved by being meaningful in customers’ lives on every level: functional, personal, and collective. Tomorrow, then, will belong to organizations and brands that practice positive impact marketing, and to companies that go beyond business and economic goals.
