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COMPANIES FACE BOYCOTT THREATS AMID NEW VOTING LAWS

How Big Brands Address Social and Political Issues

This week, a few of the world’s largest companies are being pressured to express their opposition to a new voting law in Georgia.

Known as SB 202, Gov. Brian Kemp signed this 96-page bill into law in an effort to streamline elections at the local level while also ensuring integrity behind absentee ballots following concerns of widespread voter fraud in the 2020 election. SB 202 requires an identification number to apply for an absentee ballot, cuts off absentee ballot applications 11 days before an election begins, limits the number of absentee ballot drop boxes, and makes it illegal for political campaigners to try and influence voters by handing out food or water as they stand in line.

While the bill passed with ease by Georgia state legislators, left-leaning activists are furious. 

Now in Texas, Senate Bill 7 is on the table to prohibit efforts such as drive-thru voting and to place limitations on mail-in voting. While progressive activists point to this with alarm that it suppresses voters, state legislators like Senator Bryan Hughes indicate that SB 7 “standardizes and clarifies” voting rules to ensure “every Texan has a fair and equal opportunity to vote, regardless of where they live in the state.” 

“Overall, this bill is designed to address areas throughout the process where bad actors can take advantage, so Texans can feel confident that their elections are fair, honest and open,” Hughes said.

As a digital agency, we are not in the business of public policy and we don’t intend to hash out or litigate the details of these new laws. We’ll simply emphasize that the voting laws have been met with controversy and now some of America’s largest brands are being pressured by activists to take a position on the issue. Some of those companies include Delta Airlines, Coca-Cola, Aflac, and The Home Depot, all of which are now facing boycott threats.

Back Office Political and Social Conversations

Companies have to navigate a fine line when responding to controversial political and social issues. There is always a risk of taking the wrong position and for some, it’s a nightmare come true when social media is raging with demands for a boycott of your products or services. 

Company CEOs, CMOs, or Vice Presidents of Communications are tasked with coming up with a suitable public response. In most cases, the goal is to mitigate any threats of actual or perceived loss. In extremely rare cases, companies like Nike find a way to leverage a social issue to exploit the market for massive growth. 

The truth is that in 2021 brands are penalized for saying the wrong thing, but they are also penalized for saying nothing at all. 

Inside HR departments, there is always pressure to not alienate the viewpoints of employees or expose the company to avoidable legal risks. Among the marketing teams, degradation to conversion rates or falling sales numbers spark a series of white-boarding sessions to brainstorm new messaging that may send that growth chart up and to the right. The reality is that sometimes there is no win and none of us are Nike. 

The Rise of Politics and Business

There was a time when businesses stayed out of politics, for the most part, donating equal sums to both Democrats and Republicans more so as a gesture of support for our democratic process than as an endorsement of policies. 

Starting in the 1980s, the “corporate social responsibility” movement brought attention to the sourcing and fulfillment of products, pushing for ethical trade and commerce. Corporate social responsibility is a management concept that companies follow to integrate social and/or environmental issues into their business operations. Often this includes a dedicated business effort concerned with promoting philanthropy, environmental conversation, diversity and fair labor practices, and charitable giving or volunteerism. 

For most of the 1980s and 1990s, however, the public focus was on how businesses did things to fulfill their core value proposition and improve their communities, less so than their explicit endorsement of political policy positions.

Influence of 24 Hour News and Social Media

There was once a time when CNN actually reported the news. 

In fact, CNN’s 24-hour coverage of United States foreign policy late into the Cold War transformed how the public was informed of world and domestic events. News coverage kept an hourly focus on politically divisive and polarizing topics. 

There was also a time when Facebook was for keeping in touch with friends and family.

The introduction of the first recognizable social media site in 1997, a platform called “Six Degrees,” and the glory days of MySpace seem so far from where we are today. 

Today, 69% of all adults in the US are on Facebook and the social platform serves the daily news needs for more than half of all Americans. 

Compounded by the sharing and commenting that takes place among daily active users, the frequency of politically charged discussions happens by the second.

Blame It On Social Media Marketing

With the market now conditioned for a high frequency of incoming updates, brands turn to social media platforms to stay relevant and connected. But even well-intended social media marketing teams face unexpected backlash. 

For example, immediately following the election, Gap, Inc. released a social post that intended to show solidarity with both Democrats and Republicans with their “unity hoodie” Tweet. 

Social media was intended to build loyalty and boost sales for businesses. Thankfully, it is still very capable of doing that. Unfortunately, it has also clouded the lines of “church and state,” and “business and politics” in such a way that presents business leaders with increasingly impossible, sometimes unfair situations to navigate.

Boycotts Don’t Really Hurt Big Brands

All too often we hear advocates from the Left and the Right demanding the boycott of a big brand. 

Activists want to use commerce and weaponize consumers to hurt their opposition. That is exactly what is going on in Georgia right now, and we may also see it come to Texas and other states in the near future. 

But this is nothing for companies to pay too much attention to. All sides are guilty of calling for boycotts and they are often short-lived and counterproductive.

In fact, some companies even see revenue growth amid the usual hysteria that might exist on MSNBC, CNN, and social media. 

Goya Foods is a great example of this. In July of 2020, Goya CEO Robert Unanue praised former President Trump at a White House event, sparking backlash from Democrats such as Rep. Alexandria Ocasio-Cortez. As social media was set ablaze with demands to #BoycottGoya the company enjoyed $92 million of free publicity and Mr. Unanue went so far as to call AOC his “employee of the month” for their spike in product sales. 

Most of the time, such as in the case of former President Trump’s call for a Goodyear boycott, these situations are short-lived. Why? Because we have a 24-hour news cycle and social media.

It doesn’t take long for a newer, juicier topic to start trending on social media.

Companies That Do Not Want To Be Political

Companies that do not take a position expose themselves to some degree of risk.

They may be victim to the internet trolls that live on Twitter, the keyboard of a journalist, or the demands of an activist. The truth is that the larger your company is, the less concern you should have about any long-term impact. 

By not taking a position, leadership may be viewed as having flexible values or none at all. 

The Goodyear boycott may be viewed as an example of this and there was no significant or long-term impact to the company’s financial performance.

 

 

 

 

So if your business strives to be excellent at whatever your product or service is, if you choose to stay out of politics, just keep delivering great customer service, quality, and do so at a reasonable price. Do that and studies show that you will be fine to the extent that your employees are well-taken care of.

Companies That Take a Side But Are Not Authentic

Companies that take a side but do not practice what they preach face degradation to their credibility.  

The NBA is an example of this. On one hand, the NBA painted “Black Lives Matter” on their court and ran campaigns centered on social justice. On the other hand, the NBA continues to do business with China despite rampant human rights atrocities, child exploitation, and a state-sanctioned genocide against Uighur Muslims. There are so many bad things to point to, but the truth is that following government-mandated shutdowns, fans are eager to return to normalcy and want to attend and view games.

Nike is another enterprise that has made some exceedingly terrible decisions, yet the company is more valuable than ever. Today, the social justice warriors that run Nike preach of their commitment to fighting “against discrimination in communities worldwide” but the fact is that since the 1970s, the company has been accused of relying on sweatshops and slave-labor to produce their products in China and other developing nations.

While there is a sad trend in how corporate greed drives hypocrisy, Nike’s value rose by over $26 billion following its brand partnership with Colin Kaepernick. 

Why Do Big Brands Mostly Suck At This?

Big brands seem to frequently take policy positions but they easily fail the authenticity test. 

Unlike small companies, enterprises employ hundreds or thousands of people with diverse backgrounds and viewpoints. When something that is unjust is being mandated or discussed in a meeting, big companies should expect that a whistleblower will share this type of information with the public. We saw that with Goodyear and we also saw that with racist diversity training that was being imposed by Coca-Cola in February. 

In addition to the natural diversity of thought that exists in larger groups of people, big brand leadership also has to report to shareholders and bankers during quarterly earnings calls. They face a great deal of scrutiny to drive monthly financial performance and make decisions based on that pressure. Sometimes business decisions are made in the best interest of performance metrics, excluding the goals of social initiatives.

Given the size and nature of these businesses, it is completely unrealistic to expect an entire employee base to share the same values and opinions as those who live an alternate reality in upper management.

The truth is that a big brand has a much more difficult time hiring around shared values and/or political and social inclinations. 

Does Advocacy Change Consumer’s Minds About You?

So the question then is: “does political advocacy have the power to change consumer’s minds, employer hiring abilities, and influence the long-term success of most businesses?”

Recent history would say “yes and no.” 

The truth is that corporate advocacy is much less impactful than you might think. 

Data shows that Millennials and Gen-Zs will prefer to do business with companies that share similar social and political positions but when it comes down to it, people will almost always purchase whichever product is most convenient, available, and well-priced. 

How We Do It

In our office, the only approach is one that focuses on two words: Mutual Respect.

The best course of action for any business is one that respects the diverse viewpoints of its employees and customers.

We believe in allowing our colleagues the freedom, respect, and trust to work as individuals, as citizens, toward creating a social and political impact on our society. As a business, we strive to deliver outstanding online experiences that help our clients achieve specific business goals… Like 99.9% of the businesses out there, we are far from being a public policy thinktank and won’t pretend to act like we read every line of every piece of new legislation. We hope our legislators do, but we know they also do not in some cases.

During election cycles, we know that as a business, our role is simply to sit back and facilitate a democratic process. This means giving our team a half-day of Paid Time Off to make a thoughtful, unhurried voting decision.

Management does not impose or indoctrinate beliefs about who the team should or should not vote for. Leave that to the campaigns and thinktanks!

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Author: S. Adam Rizzieri
Co-founder & Chief Marketing Officer // Agency Partner Interactive