In today’s polarised climate, it’s not uncommon to see companies wading into deep political waters. Sometimes, it’s the company as a whole taking a stand and making a formal statement; at other times, it’s remarks from an individual within the leadership team. The intervention may take the form of a marketing campaign, a piece of PR, or just a casual comment, and can range from subtle nods to overt endorsements or rejections of specific policies or ideologies.
Why is this happening, and why is it increasing? In one report quoted in The Hill, ‘the most trusted institutions to which people now look are their employers. ‘In other words, it’s often companies that people – employees and customers alike – look to for a stance on an issue. But there’s a lot at stake: reputational damage, boycotts, loss of customer trust, and company morale are all factors to consider if it goes wrong. On the other hand, when a company comments on a political or social issue effectively, it can enhance brand loyalty, resonate with value-driven consumers, and differentiate itself in a crowded market.
My view is that it can be as dangerous to say something as it can be to stay quiet. So, what should businesses do when it comes to the political and social discourse? As I’ll show in this article, the only way to create an effective strategy is to ensure that whether you speak up or stay quiet, your action aligns with your company’s values.
When it works, it really works
When companies successfully align their brand with social or political values, it can resonate profoundly with their customer base, enhancing brand loyalty and fostering a sense of community and shared ideals. This positive reception can translate into increased consumer support and can be particularly impactful for businesses that operate in industries where social responsibility is highly valued.
The first step here is understanding your audience. Today’s consumers are increasingly looking for more than just a product or service – they seek a brand that reflects their values and beliefs. This is especially true among younger demographics, who often favour companies with clear stances on social and environmental issues. The same goes for younger employees. In one report, over 60% of millennial workers said they preferred companies that take a stand on social issues, while half said they would leave a job if it didn’t align with their values.
I believe any move into the political or social arena must start with an authentic and honest look at your company’s values and beliefs. Not what you wish it held, but what it actually holds and how the public perceives it.
A notable example of a company successfully doing this is Nike’s 2018 campaign featuring Colin Kaepernick. Kaepernick, a former NFL quarterback, had gained national attention for kneeling during the national anthem to protest racial injustice and police brutality in the US. By choosing Kaepernick as the face of their campaign, Nike made a bold statement in support of his activism, aligning the brand with the values of equality, courage, and social justice. Despite the initial backlash, including calls for boycotts and some customers destroying Nike products, the campaign ultimately proved to be a success. Nike saw a 31% increase in sales following the campaign’s launch, and the move was praised for its boldness and authenticity in standing by Kaepernick’s cause.
When it all goes wrong
Let’s now look at that same issue from another angle. Consider the league itself – the NFL – which found itself unprepared as Kaepernick’s kneeling protests unfolded. Lacking a clear response or standpoint, the league let then-President Trump dominate the discourse, which made the NFL appear directionless. In moving slowly and not speaking up, the NFL found that silence can also be damaging.
So, misjudging your audience’s expectations can lead to alienation and backlash. When Budweiser attempted to show support for the transgender community last year, the campaign backfired. Critics accused Budweiser of exploiting a sensitive social issue for commercial gain, while supporters of the transgender community questioned the authenticity of the brand’s commitment. The campaign did measurable damage, with falling sales of Bud Light (24%) and Budweiser (9%) in the weeks following the debacle. Interestingly, competitor Modelo Especial saw their sales rise during that period.
Another giant, Starbucks, made a mistake with its 2015 ‘Race Together’ initiative. Intending to encourage conversations about race among customers and staff, the initiative was a disaster. Critics argued that it placed an unfair burden on employees, who were not trained to navigate such potentially sensitive and complex discussions. In addition, customers and commentators decried the campaign as tone-deaf and superficial.
The Budweiser and Starbucks cases highlight the challenges of addressing complex political and social issues in a way that resonates authentically with the public. The effects can last longer than the immediate bump or blip in sales. Back in 2017, YouGov found that 21% of consumers boycotted a brand after a scandal, and of those who boycotted, 61% never returned to the brand again.
What does your audience expect?
So, where do we go from here? If you’re feeling the pressure, you’re not alone. It’s coming from all sides, including internally, with employees driving companies to take a political stance. The Harvard Business Review notes that with the current 24/7 news cycle plus the effects of social media, it’s becoming ever more difficult for companies to remain on the fence, because what your company says does influence consumer choice. A 2021 report by Deloitte noted that while quality and price are still at the top of purchasing criteria, over half of the people surveyed said they were more loyal to brands that address social inequities.
Your strategy will also depend on whether you’re a small business or a large corporation. Smaller companies are often closely tied to their communities and might find it easier to navigate these waters if their stances align closely with their customer base. In contrast, with their broader, more diverse customer bases, large corporations might find it more challenging to take a stance without alienating significant segments of their audience.
I maintain that you must avoid token gestures or superficial engagements at all costs. Any political stance taken by a company needs to be authentic and consistent with its brand values, otherwise consumers will see through it, potentially leading to accusations of bandwagoning or virtue signalling. Genuine commitment to a cause, demonstrated through consistent actions and corporate policies, is more likely to be received positively.
Companies must also consider the long-term implications of their political stances. Once a position is taken, it can be challenging to backtrack without further reputational damage. Additionally, the political landscape can change rapidly, and today’s popular cause might become tomorrow’s contentious issue.
Conclusion
The decision for a company to engage in political debates is a complex one, fraught with potential risks and rewards. It requires a nuanced understanding of the company’s customer base, a clear alignment with the company’s values, and a thoughtful assessment of the long-term implications of taking a stand. While silence can be interpreted as complacency or indifference, ill-considered engagement can lead to significant fallout. Ultimately, each company must carefully weigh these factors and decide whether the potential benefits outweigh the risks.