Newgate’s Dan Billings explores the perils of business adopting particular positions in the light of current political or religious controversy
With popular sentiment as politically polarized as ever, brands need to plan their messages carefully and consider the political implications of their business decisions. Even the most mundane of tasks such as supplier arrangements may be fair-game for highly-motivated political activists.
Case in point, Nordstrom’s commercially sound move to quietly drop Ivanka Trump’s clothing and jewelry line, which immediately saw the American retailer become Trump and surrogates’ target du jour.
Starbucks found itself the target of a boycott movement after CEO Howard Schultz vowed to hire 10,000 refugees in the wake of Donald Trump’s executive order banning arrivals from seven majority-Muslim nations. It’s unclear exactly how many adherents ultimately boycotted Starbucks as a result, but it was enough to garner plenty of news and analysis on the boycott’s impact.
Ironically, these two developments at big American brands look to have (at worst) had a negligible impact on sales or (at best) solidified a positive association for the brand with a supportive customer segment. But these positive outcomes mask the risk both organisations took when they gambled on a political statement, intentionally or unintentionally.
Effective positioning and message delivery
They both highlight the need for well thought through communications and, more than ever, effective positioning and message delivery. Businesses need to go back to the drawing board to reconsider their corporate messages and plan their responses to issues they foresee creeping up on the political agenda that could impact their business.
In the past, Newgate would near universally advise clients to avoid taking a political stance or view on a major issue. Why alienate potential customers, investors or suppliers over issues completely separate to commercial concerns?
The problem is that not taking a political stand is becoming in itself a liability, as customers these days are increasingly using their purses to exercise political views. The #Grabyourwallet campaign started by San Francisco digital marketer Shannon Coulter has made headlines across the US and overseas, even with a website that is merely a public read-only Google spreadsheet. Retailers are desperately engaging with Ms. Coulter to have themselves removed from the site.
And it’s not just a Western issue
And it’s not just a Western issue. In June 2016, L’Oreal canceled a planned promotional concert with Denise Ho in an apparent response to the Cantopop star’s outspoken support for Hong Kong independence from mainland China. The backlash was swift from local shoppers – L’Oreal was forced to close its Lancôme brand stores in Hong Kong, and the company is even considering selling The Body Shop partly in response to struggling Hong Kong sales.
Brexit is perhaps the most dramatic example of a political issue with overwhelming commercial consequences for global financial services firms desperate to retain single market access to Europe. Who could advise them otherwise than to mount a vocal campaign in defense of their political position?
Stakeholders need to be mapped out and prioritized. Customers, investors, employees, suppliers and regulators will at some point want to know the company’s position on a given topic. Where should we comment? What will we say? Where can decline?
The waters become a bit more treacherous as businesses comment on individual politicians and political developments that wade into social issues. Our guiding principle is generally to leave the political bickering to the professional politicians, but these days that is easier said than done. Some of the biggest political issues on the agenda are not merely tangential to business – they fundamentally affect a company’s very license to operate.
An old parable tells dinner party guests to avoid politics and religion at the table. And for good reason – few topics are as emotionally charged, and arguments over values and beliefs typically leave at least one guest furious, dejected or filled with contempt (or some combination thereof). But these days, most dinner parties will inevitably turn to the unprecedented challenges facing governments around the world. And corporations are not spared from the political conversation happening around the world on social media and in the real world.
The answers to these questions won’t please everybody, but that’s no excuse to bury heads in the sand. With thoughtful preparation, companies can prepare themselves to carefully navigate the political future both to embolden their supporters and minimize backlash.
Dan Billings an Associate Partner at Newgate Communications Hong Kong