Consumers today want firms to have a higher, more noble goal than simply selling goods and services.
The period in which a company’s primary responsibility was to its shareholders appears to be over. It’s no longer enough to simply be a beer company that makes fantastic beer that people enjoy and hence makes a lot of money. Good brands are now being questioned about whether they have a higher purpose that justifies their existence.
The purpose pushers are proof
The normalization of the triple bottom line concept, which pushes for outcomes that benefit the corporation, its customers, and now society, exemplifies this. It’s a concept that wasn’t even conceived 20 years ago.
It makes sense when you consider how brands currently use social media to engage, communicate, and converse directly with their audiences. Most CMOs find it difficult to avoid becoming swept up in the fast-paced, unavoidable social, political, and environmental landscape that encompasses social justice, human rights, women’s rights, climate change, immigration, mental health, equality of opportunity, and poverty eradication.
There will always be a tiny, outspoken number of people who are so moved by a cause or purpose that their purchasing decisions are influenced. However, in focus groups and questionnaires, a much larger percentage (maybe even the majority) claims that purpose influences their purchasing decisions. It’s not that these folks aren’t sincere; most of us would joyfully declare our support for environmental, gender equality, and a variety of other social concerns. It’s only that our idealized selves are taking the surveys while our real selves are doing the buying.
It’s all in your head.
So, what’s the deal with the inconsistencies? Behavioral science research has repeatedly revealed that what people say they want and how they really behave often have nothing in common.
Temporal discounting refers to the idea that we reduce the value of something the further it is in the future: the fuzzier and further away something is (for example, a comfortable retirement), the less value we assign to it, and the more likely we are to exchange it for something that brings us happiness or value in the here and now (a brand-new top-of-the-line smart TV).
In reality, we continuously make decisions that cause ‘us of today’ to raise two outstretched middle fingers in the direction of ‘us of tomorrow.’ Future us wants to leave a planet worth inhabiting for the next generation, but that’s no match for ‘today us,’ who wants to go to Europe for a vacation, fill our wardrobe with seasonal quick fashion, and pick up the kids from school in a gas-guzzling SUV.
This is because our prefrontal cortex, which sits just behind our brow and spends its days concocting logical, rational stories that firmly explain who we are and what we do to the rest of the world, lies just behind our brow. While our prefrontal cortex may say it seeks significance, the section of our brain that makes all of our decisions seeks immediate gratification. This is because our reptile brain is geared for instant gratification.
We are risk-averse as humans, especially when it comes to long-term gains. Resources have been limited and difficult to come by since the beginning of time. Because day-to-day survival was all-consuming, the future didn’t exist. As a result, we would naturally prioritize the now above the future.
As a result, temporal discounting is to blame for nearly every bad short-term decision you’ve ever made, as it encourages impulsivity and smaller, sooner rewards over larger, later ones. Most of us know how it feels to sit on the couch and eat a bucket of ice cream, knowing that we’ll entrust our future selves to work off the calories in the gym tomorrow, or at the very least, eat a salad for lunch to compensate.
Perfecting the art of status communication
Successful, purpose-led brands have the dedication to a higher-order social purpose; it’s the very immediate, short-term benefit they deliver in the form of status signaling.
In the end, millions of successful brands give customers short-term benefits, such as status signaling, without promoting a larger mission or purpose. So, while good corporate citizenship is admirable, keep in mind that short-term gratification is the spoonful of sugar that dilutes the long-term benefits.