The issue of brand values vs. ROI comes up all the time in our conversations with brands and agencies. Most agree that aligning with people on their values is extremely important to brands’ businesses. And more and more consumer research backs them up.
It seems that a significant majority of people prefer brands with values that align with their own — as high as 82% in one study. (See links below.) Increasingly, they expect companies to walk the walk when it comes to things like social and environmental responsibility.
Some of these studies also show that aligning on brand values isn’t just a consumer preference; it actually drives purchase behavior as well.
Do the right thing, or show me the money?
Despite this data, many brands still worry that acting authentically and being true to their values could undermine their ROI. Consequently, they often view marketing decisions as either/or choices between “do the right thing” and “show me the money!”
That could be a false dichotomy that prevents them from seeing the bigger picture — i.e., aligning with people on values and driving purchases are completely compatible outcomes in this day and age of real-time marketing.
More and more, acting authentically drives ROI, just as acting inauthentically damages it.
We can see this playing out now with Elon Musk and his biggest brand
Musk is one of those conspicuous founders and corporate leaders whose personalities are nearly inseparable from their brands. We’ve seen prime examples of this throughout history. Ford. Disney. Jobs. Gates.
Musk’s vision for Tesla established a brand’s values that millions of buyers have bought into. Tesla’s mission statement is “to accelerate the world’s transition to sustainable energy.” And its core values include “doing the best, taking risks, respect, constant learning, and environmental consciousness.”
But it seems that Musk’s recent actions and statements may be damaging the Tesla brand financially because people see them as inconsistent with the values they aligned with when they purchased or leased a car, or even invested in the company’s stock.
It’s getting harder for brands to separate values from financials
The headline and opening sentence from this recent opinion article in Fast Company exemplifies the disconnect:
“Tesla owners didn’t buy a car: We bought a set of beliefs Elon is trashing”
“To think a Tesla is just a car is to not understand the power of a strong brand and how quickly that loyalty is wiped out with consistently contrary behavior.”
The author describes not only her own personal embarrassment in getting behind the wheel of her 2020 Model Y now, but also how she dumped her Tesla stock in the summer “knowing the Twitter acquisition would be a total distraction and debacle for Musk and Tesla shares. The stock is down more than 50% since early August.”
She also cites this CNET article that alleges numbers of people either canceling Tesla orders or not renewing leases because of Musk’s behavior around his recent acquisition of Twitter.
Another fresh article from Insider spotlights other Tesla customers who confirm these sentiments. The story also cites a brand expert from Columbia Business School, who suggests auto brands are hurt more by controversy than other brands because “…a car is a long-term purchase that represents its owner to the outside world wherever they go.” Plus, the high ticket price may make people think more about whether their views are aligned with the brand’s.
Brand authenticity and consistency affect consumer behavior
While other factors are also probably contributing to these financial issues, the obvious lesson is this: brands acting inconsistently with the values that their consumers align on can negatively affect purchasing behavior.
It’s also as likely that brands acting consistently with their values can positively affect such behavior. More and more data point to this growing reality. For example, the IBM Institute for Business Value Consumers want it all report states:
“Purpose-driven consumers, who choose products and brands based on how well they align to their values, now represent the largest segment (44%) of consumers.”
So, if purchase behavior and purpose are proving to be more and more compatible, could ROI become one measure of how aligned a brand’s values are with its customers? Leave a comment and let us know what you think.
Here is a sample of consumer research articles citing brand values and purpose:
- New research shows consumers more interested in brands’ values than ever
- Consumers want it all
- Purpose-Led Brands Can Reshape the Consumer Goods Industry if They Can Scale
- Havas’ Meaningful Brands Report 2021 Finds We Are Entering The Age Of Cynicism
- Authentically inclusive marketing
- For Gen-Z, Consistent Values Drive Buying Behavior
- Porter Novelli’s 2021 Purpose Perception Study
- More People Shop According To Brand Values
- Consumers seek out brands that respond to their core values
- Razorfish Study Finds 82% of Consumers Make Purchase Decisions with Purpose in Mind
- Why Brand Purpose is your Business Value
- Consumers Purchase Based on Brand Values — But That’s Not All