Companies like Walmart and SoulCycle are facing more boycotts than ever in the Trump era, but many are still clueless in how to respond
- Company boycotts are becoming more prevalent in our highly-politicized culture.
- Companies like Walmart and SoulCycle have faced boycotts.
- Companies can no longer ignore their customers when it comes to boycotts and hope it blows over. They must act definitively to address customer concerns.
- Michael Gordon is a long-time Democratic strategist and the principal for the strategic communications firm, Group Gordon.
- Visit Business Insider's homepage for more stories.
Boycotts seem to be a dime a dozen in our culture. With the gale-force influence of social media as the wind in their sails, boycotts spur a media blitz that quickly subsides in our whiplash-inducing news cycle. Then, media and public attention shift to the next big scandal.But the ubiquity of boycotts does not diminish their seriousness. They remain a powerful form of consumer advocacy that tests the values and standards businesses purport to represent.Advertisement
This means that businesses need to not only prepare to ride out a boycott but also respond swiftly with definitive actions that address consumers' concerns.
Consumers are expecting more from companies politically
Today, 64% of consumers think it's important that the companies whose products and services they purchase have values aligned with their own. Moreover, 44% of Americans would stop doing business with a company they disagreed with politically.As brands increasingly become embedded into our everyday lives, consumers are right to use a boycott as a warning flare to brands that they have some explaining to do if they expect to be intimately associated with a person's self-identity. Brands that don't heed that warning can face serious consequences.
Too often when faced with a boycott, corporate America opts to ride out the outrage, taking advantage of our tightened news cycle and the short attention spans it fosters.Only about 25% of brands publicly respond to boycotts. From a bottom-line perspective, there is some merit to this strategy: boycotts today rarely have an immediate economic impact on brands. However, in a climate in which consumers increasingly look to brands for moral and social leadership, being called out for failing to do the "right" thing can leave a nasty scar on a brand's reputation long after the initial wound has healed, given this reality brands should be armed with a three-part strategy to respond to political snafus.
Doing nothing is not an acceptable responseBrands need to treat a call for a boycott as a call to action: an opportunity to make clear where their social and political values lie and how they are acting according to those values now and in the future.Advertisement
If it's clear that what consumers are upset about goes against the brand identity, fix it. As a cautionary tale, consider SoulCycle. The brand was put on notice by consumers after revelations of investor Stephen Ross's fundraising for Trump.
While the fitness chain's attendance numbers fell in the days after the boycott, worse for the brand is the betrayal of its adherents. Though the brand issued a statement about the situation, SoulCycle missed an opportunity to back up its words with action. Now, it faces a long climb to regain its previous status-a potentially unreachable target as long as the not-so-"passive" association with Ross continues.
Consumers want real corrective actionForward-thinking brands understand the long-term benefit of demonstrating values and make the strategic decision to take a stand even when it means alienating some customers in the short term. In these cases, a boycott can actually help a brand prove its bona fides on an issue by not backing down from the pressure.Advertisement
For example, Dick's Sporting Goods and Walmart both took immediate action on gun control after mass shootings that horrified the nation. Though some consumers boycotted, the companies' quick action, meaningful policy changes, and advocacy for gun control measures were ultimately received positively by consumers.
While Dick's saw a 2% decline in sales in the months following the announcement, today its stock is up more than 13%, and sales have since rebounded with the biggest quarterly increase since 2016. Now, almost 150 companies aren't waiting for calls from consumers to urge Congress to pass gun control measures.As opposed to SoulCycle, Dick's took action in the face of a politically challenging issue and it came out the better for it. More companies should take heed and to take a stand.Advertisement
Consumers don't forget, and neither should companiesBoycotts inevitably lose steam, but they can continue to haunt brands long into the future. The damage inflicted can have lingering effects on a brand's reputation, as we saw with Uber's struggles since a viral #DeleteUber campaign in January 2017.
The brand was criticized for breaking a taxi strike during protests at New York City's John F. Kennedy International Airport over President Trump's immigration policy, and a series of additional missteps throughout the year regularly brought the movement back to the fore and cemented Uber as Silicon Valley's bad guy.The company's recent IPO filing detailed not only the hundreds of thousands of customers lost to the boycott but also how the movement "adversely affected" the brand's reputation and "fueled distrust" among consumers. Now, almost three years and $500 million in marketing spending later, the brand is still struggling to rebuild consumer trust.Advertisement
The modern boycott plays an important role in our current social and political climate. While it may not dramatically hurt the bottom line in the short term, a boycott is still a lever for consumers to exert pressure on brands.Businesses that think they've gotten off easy because sales or users didn't plummet drastically after a boycott are fooling themselves and risking long-term damage to their brands. The smartest companies will look beyond the immediate horizon. To thrive, and also to just survive, in the current political climate, companies must respond to boycotts and other political pressures with clear action and a commitment to show consumers them what the brand really stands for.Advertisement
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