CORPORATE ACTIVISM IN THE TRUMP ERA

Back in 2013 the Supreme Court was set to determine the constitutionality of the Defense of Marriage Act. At the time I was leading a creative team for Sapient in Los Angeles. Our logo was orange but we decided to switch it to a rainbow color to show our support for the LGBT community. It was not a trivial decision. Like most companies we wondered if our political activism would negatively impact the bottom line. We were fully aware that those outside of our California bubble may strongly disagree with us and we had the potential of alienating existing or future clients. Luckily we found courage from organizations that had much more to lose than we did.

Starbucks at the time also took a stance against DOMA and when a shareholder complained to Howard Schultz, the CEO of Starbucks, that their position on DOMA might be impacting Starbucks stock price, Schulz made it clear that not every decision is an economic decision. He stated that:

The lens in which we are making that decision is through the lens of our people. We employ over 200,000 people in this company, and we want to embrace diversity. Of all kinds.

Fast forward to 2017, as the Founder of Bedlam I continue to embrace the notion that there are issues that are worth fighting for and that companies have a role in shaping those policies. For example, when Donald Trump tried limiting travel from predominately Muslim countries (the so-called “Muslim Ban”), we made it a point to let everyone know on social media that Bedlam was against the ban. Bedlam even donated to the ACLU to help directly fight that policy.  And we weren’t alone. Tech giants such as Apple, Facebook, Microsoft, and Google all came out against the ban. In fact, 126 companies filed legal documents that object to President Trump’s Muslim ban.

POLITICS AND YOUR BRAND

With a Trump administration in place, companies have been more apt to make their political leanings known. And overwhelmingly they have taken stand against his policies or rhetoric. If you watched the Super Bowl you saw ads like Airbnb’s “We Accept”:

The Academy awards also brought us an onslaught of political ads including Hyatt’s “For a World of Understanding”.

Between these two ratings Juggernauts, it was hard to find a commercial that didn’t have a political (and liberal) undertone. In fact, with so many companies looking to score political points, it’s even been mocked by SNL:

There are definitely some obvious winners of the anti Trump movement. Stephen Colbert is now the late night king by making politics the centerpiece of his show. Saturday Night Live is seeing it’s best ratings in years. Rachel Maddow, Jake Tapper, Bill Maher, Tucker Carlson, Trevor Noah, and Samantha Bee have also benefited with a ratings bump since Trump took office. Even the “Fake News” New York times saw it’s subscriptions double in 2016.

And who outside of the construction world had heard of 84 Lumber before they received nearly 11 million views for this epic and poignant Super Bowl ad?

But before you reserve your own seat on the political activism bandwagon, there are cautionary tales. For example, in defiance of Trumps ban on Refugees, Starbucks once again took a stand and promised to hire 10,000 refugees over the next five years. Conservative groups angrily reacted and threatened boycotts because Starbucks was, in their minds, putting the needs of foreign refugees ahead of veterans. While this is not true as Starbucks already hired 8,800 military veterans as part of their initiative to hire 10,000 veterans by 2018, Starbucks lost control of the narrative within a very vocal group in society. It’s not yet clear how this might impact their financials, but according to the YouGov BrandIndex it has already taken a toll on it’s brand perception. Two days before Starbucks’ announcement, 30% of consumers said they’d consider buying from Starbucks the next time they were craving coffee, the highest proportion in nearly a year. Now, the percentage is down to 24%.

Target also has felt the wrath of organized boycotts when it implemented a policy that allowed transgender people to use bathroom that aligns with their identity. And since the bathroom policy was announced neither Target’s earnings or stock price has done very well. Some will certainly argue macro influences, namely the Amazon effect, for Target’s poor performance. But what’s not debatable is Target has felt enough of an impact that they’re going to spend $20 million to add single-stall bathrooms along with men’s and women’s restrooms in its stores, a move meant to accommodate shoppers who have expressed concern about the retailers’ bathroom policy.

KNOW YOUR TARGET AUDIENCE

Like him or not, Trump did receive 63 million votes and won the Presidential Election. His followers are passionate believers and with social media they can organize very quickly to retaliate with their pocket books.

But depending on your target audience, certain brands can be more brazen about their points of view than others. Take this Diesel commercial entitled “Make Love Not Walls”.

A clear rebuke on Trump’s plan to build a wall along the southern border, Diesel is banking on this message resonating with their target audience of the young and affluent. They are betting that those who were offended by this commercial were never going to be consumers of their product anyway.

In fact, demographics plays a huge part in why corporate America seems to have such a left leaning slant. As Eric Levitz of NY Magazine points out:

While [millennials] have disproportionately weak influence over the policies of their government, they enjoy disproportionately strong influence over the messaging of their brands. This is because city-dwelling millennials are more likely to try new products than your average elderly person in rural America — and the former’s brand loyalty is more coveted, since they are less likely to die soon.

In other words, for many brands the demographic that makes up the liberal voting block are also the demographic that is the most vital to their business and its future growth.

IN CONCLUSION

There are numerous factors that could weigh on your decision to join the political fray. The most important thing to keep in mind is even if you’ve decided that the political stand you’re about to take is going to reinforce your brand and play well with your target demographic, you may not be able to fully gauge the financial impact. In a highly polarized society, where technology has made it so easy for groups to organize petitions and boycotts, your political activism may not always have a net positive effect on your revenue. So don’t take a stand because you think you’ll get more customers or more money. Do it because you have a genuine belief and your moral compass won’t let you stay silent.