Profit for purpose

Author of Conscious Marketing, Carolyn Tate, chats with Business State about why businesses are uniquely placed to bring about positive change and what it means for your marketing.

                                

Carolyn Tate says businesses need to break their addiction to profit.

That’s not to say profit is bad or unimportant, but Tate’s philosophy for business and marketing says profit is an ingredient in a higher purpose. Her book relates to the Conscious Capitalism movement, which originated in the US, but has since spread around the globe. As one of its leading proponents in the US, John Mackey (Whole Foods Market), told Forbes in 2013, “Conscious capitalism puts higher purpose and creating value for the community stakeholder at the core of every business decision rather than being added on later as a program to thwart criticism or help manage a business’ reputation.”

We’re not talking religion here, but rather about the role of business in solving the problems of the world or a local community. Business is uniquely placed to bring about positive change, and Bank of Melbourne has always been aware of this.

“Bank of Melbourne is positioning itself very much around the local economy and local business because, the fact is, small businesses are the backbone of Australia,” says Tate. “By 2040 or 2050 half of the workforce is going to be self-employed or working in a small business. A lot of the media attention is focused on big companies, but the reality is that it’s the small enterprises that are going to be the future.”

Supporting environmental and social issues has long been a ‘nice to have’ part of a business, to be leveraged through its marketing communications, while profit is the primary concern.

But Tate’s latest book, Conscious Marketing, posits the argument that things are, and should be, changing fast.

“We should all be ‘profit for purpose’ organisations. Profit is a one-dimensional, singular financial measure of success. For me, measures of success range from staff retention to social impact. They’re more effective than profit, but our economic system is set up to measure short-term profit, so that’s what everyone runs toward.”


Conscious Marketing contends that the marketing industry is broken. “Consumers are tired of interruption, push, mass media and the manipulation of marketing and advertising generally,” she writes. “They want to deal with honest, ethical companies that have heart and purpose and that care about serving all their stakeholders instead of their pockets.”

Tate, an experienced marketer who broke away from the corporate world long ago, explains why marketing is a vital area to drive this kind of change in business.

It’s the portal into a business, she tells Business State. “Marketing is key to people becoming aware of a business and then digging deeper to find out if they actually want to buy from it.”

People are getting smarter about how they buy, and the tools for researching businesses have never been more available. It’s vital that businesses live and breathe the brand messages they’re communicating to the world.

Marketing can determine what values are important to an audience, and can communicate what’s important to the business. At its core, however, the business must walk the walk as well, or it will quickly be found out. The idea that marketing and business are intertwined, and that business has a higher role to play in the world, requires a shift in mindset on behalf of business leaders.

Tate has a dramatic prediction for businesses that don’t see the light. “Companies that aren’t embracing a higher purpose beyond making a profit are not going to survive over the next 10 years… they’ll die,” she says.

Environmental sustainability is not the only purposeful agenda that businesses can rally around – Tate’s philosophy extends more broadly than that, including social issues such as equality, poverty and overconsumption.

“We’re seeing failing governments, institutions, churches… It’s going to be up to the business world to change things,” she says.

Online peer-to-peer marketplace Etsy is one example of a business aligning itself to a purpose. It’s also a certified ‘B Corporation’, a non-profit business that must maintain performance in social and environmental criteria. “Etsy’s an amazing example of a conscious company that is helping women. Around 90 percent of its suppliers are women,” says Tate.

Crumpler, the bag company and a Melbourne success story, is one brand you won’t see doing price-driven marketing. “People just understand that their products all are going to last forever, and if they don’t, they have a repair policy,” notes Tate. “They encourage you to repair their products if anything’s broken. There’s a lifetime warranty because their bags are expensive. When I dropped mine in, they gave me a replacement bag to use while it was being repaired.

“To me, that’s all about value.”

When a company’s value proposition stops being centred on price, marketing becomes easier.

Tate’s message to business is clear, and so is what that means for your marketing. “When your marketing messages are about purpose, value, being transparent and authentic – and that comes from the leaders – you can start to spend less on mass, interruption marketing and more on attraction. And that means through word of mouth and recommendations.”


How can Victorian businesses become more conscious?

Practise fair trade at every level.
Icebreaker is a producer of woollen outdoor gear that from its earliest days insisted on paying sheep farmers a forward price for their wool. In eight years, Icebreaker has grown 600 percent.

Align with charity organisations.
Intrepid Travel began by supporting local charities and now apportions a percentage of each year’s profits, mainly to Asian charities. The company has grown significantly over the last decade and now has an annual turnover of more than $130 million.

Look after your staff. Well-known experiential gift company RedBalloon employs an employee experience manager, the presence of which has helped the firm score a remarkable Hewitt engagement score of 97 percent.