Why Brand Purpose Is No Longer Optional in the Age of AI 

Several brands have, in recent years, centered on a singular brand purpose as a raison d’être.  Examples of such purpose-centric organizations include Ben & Jerry’s, Patagonia, Tom’s Shoes, Bombas Socks, and Dove. For these brands, purpose becomes a vital force that binds them to their customers.

Why is brand purpose important? How will its role change in the age of AI?

Understanding Brand Purpose 

Brand purpose can be understood at two levels. Sometimes, brand purpose can be linked to a product-centric mission, or “jobs-to-be-done.” For instance, Tide could define its brand purpose as being the best cleaning brand on the market. Alternatively, brands could also embrace a social purpose as a focal goal. Patagonia is an example that has staked out its purpose as sustainable clothing.

Contrary to what some may expect, I anticipate brand purpose will continue to grow in importance, even in a hyper-digital, AI-powered age. There are good reasons for this hypothesis. Consumers from both Gen Y and Gen Z are more likely to purchase a brand if they associate it with an authentic purpose and core values they align with. Research indicates that this percentage can be as high as 66%, and these consumers prefer purpose-driven, sustainable brands with a corporate mission that transcends profit motive. As Gen-X and Baby Boomers give way to these newer cohorts, the impact and importance of brand purpose will only increase.

Brand Purpose and Company Culture 

Beyond its selling power, brand purpose can also serve as a unifying mission for everyone within the organization, help clarify a brand’s positioning in the marketplace, and provide guidelines for a brand regarding its expansion opportunities.

Investments in employee welfare or community-building has been shown to drive consumers’ preferences for brands. As noted in one survey, 28% of consumers indicated that the way a company treats its employees is critical in brand decision-making. Twenty percent of participants indicated that a company’s treatment of the environment is a vital factor, and nineteen percent indicated that a company’s support for its community is critical. Findings in another study showed that consumers were four to six times more likely to purchase from and champion purpose-driven companies.

Research indicates that brand purpose can lead to higher employee satisfaction. When employees feel that a brand’s values align with their own, they tend to be more engaged and confident in the organization.

Brand Purpose and Financial Implications 

Brand purpose has been shown to benefit shareholder value. As noted in a report by PwC, funds driven by environmental, social, and governance data are expected to outnumber ‘conventional’ funds by 2025. However, some forms of brand purpose could result in lowering a firm’s profits. This is especially true if investments in social causes signal to investors that firms are deviating from their stated mission, causing investors to lower their valuation. On the other hand, these arguments suggest that investments in brand purpose—particularly those that match a firm’s mission, products, and customers—when correctly deployed, can contribute to higher shareholder value.

Identifying Your Brand Purpose 

What are some critical steps in identifying your purpose as a brand or an organization?

Identifying a purpose can reside at the intersection of three key factors: what you (as a brand or organization) excel at, what the world needs (or what your customers care about), and what you are passionate about. One you have identified your purpose, it is important to both articulate and communicate it throughout the organization. Finally, implementing purpose is a process of bringing a purpose lens to every conversation, project, problem or decision within the organization.

Brand Purpose in Age of AI 

Brand purpose is likely to become an even more important strategic imperative for brands that are navigating a hyper-digital world. Because there are many digital channels and platforms that allow for brand meanings to be co-created with customer input, it is easy for a brand to lose its identity in a sea of social media conversations and content. Malicious actors can engage in brandjacking to control a brand’s narrative, and scammers and hackers can gain control of messaging surrounding a brand and cause significant harm. In these instances, a brand’s purpose can help provide guidance to clarify a brand’s meaning and messaging in the marketplace.

AI tools can be very helpful to a brand in helping to identify its purpose. Generative AI tools can assist in designing a mission or purpose statement, enabling organizations to articulate their values, goals, and strategic direction more clearly and creatively. AI can be used to assess what customers (current or potential) think or feel about the products and brands within the competitive space. Further, AI can offer tools for tracking a brand’s sentiment by processing large datasets of customer reviews and social media posts. AI tools such as Brandwatch, Infegy, and Hootsuite Insights can leverage AI to help measure emergent cultural conversations surrounding a given product category, gauge consumers’ emotional tone, and assess competitors’ brand positions. Overall, ensuring that your brand has a clear and compelling purpose statement, is critical in a hyper-digital world.

Written by Vanitha Swaminathan.