Brand Purpose – the new strategic imperative
by Aurélia Bettati, Eytan Koren
Issue 2, 2016
Brand purpose as the new backbone in the digital age

Digitalization is a game changer when it comes to brand, introducing new threats and opportunities that destroy or create brand value through accelerated product lifecycles, new styles of customer engagement, ongoing commoditization of products and changing employee/ employer relationships. The Brand Purpose, the “reason-to-exist” of the company, gives a unique backbone that drives strategy, product offering, and customer experience and creates customer engagement and loyalty. Should companies rethink their Brand Purpose in the digital age?

Top executives recognize intuitively how important brand is for the business. Global brand leaders – such as Nike, Apple, L’Oréal or Danone – have developed strategies which are actively led by their brand: on-brand projects are supported, off-brand activities are dropped. Brand acts as a holistic guide for the entire company, a promise to customers, employees, shareholders, suppliers and others. This has been the case for years or even decades.
However, digitalization is a game-changer. The continuing progress of digitalization has led to radically new relationships between a company’s stakeholders, especially its customers, and its brand. Companies face new threats and opportunities that destroy or create brand value through accelerated product lifecycles, new styles of customer engagement, ongoing commoditization of products and changing employee/employer relationships. A good example is the intense competition in European telecoms markets, with customers now able to compare offers and networks from a technical perspective, and with high-tech companies having become more attractive than traditional players such as telecom operators1 . How should companies respond to these new threats and opportunities? Is it enough to create superior products and customer experience which communicate and reinforce the brand? Based on recent work with a number of global major brands, in this article we make the case that in today’s environment companies need to go much further and instead focus on Brand Purpose – having a clear, strong and compelling “Reason-to-Exist”. Without this enduring backbone, we believe that companies are increasingly vulnerable to sudden, sometimes even terminal, brand damage.