Being the Brand You Want to Be
Over the last few months, there has been virtually constant news about which brands are making public statements of values and whether that is a good idea. Lists of brands to either boycott or patronize have been drawn up for both supporters and opponents of President Trump. Some brands have taken an explicit stand around the travel ban, while others have been studiously neutral. Advertisements that the advertisers claim are non-political are routinely scrutinized for political messages.
At one level, every brand expresses values. By choosing a target market and a value proposition, brands choose to exclude some customers: a brewer automatically excludes potential customers who abstain from alcohol. As Michael Porter once said, “Strategy is not about making every customer happy.”
Expressing political, religious, cultural, or social values, however, feels like a step too far for many organizations. It may not tie to the core offering of the firm and why a customer buys it. Mass market brands want everyone to buy their product — e.g. Coca-Cola would like to be everyone’s favorite soda — and so there seems little upside to taking a risk relative to the potential loss.
On a sales basis, I’ll argue here that brands shouldn’t worry so much about the risk of taking a stand for three more global marketing reasons:
1. People don’t always follow through with actual behavior relative to their expressed values.
2. For every brand there is a limited segment that is open to switching.
3. For every piece of business lost due to expressing values, there may be one gained.
All of this means any sales loss is likely to be small in the long run — which in turn can actually be freeing for a brand. . .
What We Say ≠ What We Do
Psychology and marketing researchers have accumulated a huge amount of evidence that people’s expressed attitudes don’t always turn into behavior. This is as true for values-based consumption (e.g., green purchasing, attending to labor practices, politics) as anything else. We say we want to buy green, we say we don’t want to buy products from companies that abuse their workforce, we say we will boycott businesses that support or oppose President Trump, but we don’t always follow through on what we say.
Perhaps sadly, examples of immunity to controversy abound. VW brand sales have largely rebounded from the dieselgate scandal of 2015. Concerns about Amazon’s labor practices appear to have had no effect on its march to retail domination. Calls for boycotts of, among others, Kellogg’s, Budweiser, and Starbucks, appear to have had little impact so far. (Generally, it appears boycotts have more symbolic than economic impact.)
Why don’t we buy more according to our values? It’s not that we’re bad people, but that obstacles intervene between our values and our actions. Here are three common obstacles to ethical purchasing:
Ethical concerns must be balanced against other priorities. Consumers buy products for many reasons, notably the performance and cost of the products in question. People say they want to buy products that reflect their values, but they also need products that solve their problems at a reasonable price. Some customers prioritize values more highly, but others prioritize performance and price. If the best performing product is the “unethical” one, some consumers will hold their noses and buy anyway.
Buying ethically requires thought and planning. To purchase ethically means planning to do so. It can be hard to know where companies stand on issues, or how a company’s stance on one issue might be offset by its stance on a different issue. Researching the hundreds of products we might buy in a month is a highly effortful task.
It may be hard to switch to a more ethical product. First, ethical alternatives may not be readily available. If the only products available in local stores are “bad” ones, people may be unwilling or unable to make the effort to seek out ethical alternatives. Second, even if a customer has alternatives, switching costs can loom large. Think how hard it might be to change banks, for example: rearranging direct deposit, changing online payments, etc. Third, there may be image consequences to switching. Socially or publicly consumed products may be hard to walk away from. If you decide to stop watching the NFL because of the concussion risk to players, what do you tell the people you’ve been watching football with for years?
This is not to say that boycotts and political protests have no customer effect. There will always be a segment of customers truly committed to ethics and values above all other things, willing to research and plan to buy ethically, and willing to put extra effort into finding the most ethical products available. But that segment is probably not very large.
The Switching Segment is Limited
Compounding the first reason, the number of customers open to switching to or away from a brand may be small in general. Consider three generic customer segments: the advocates, the critics, and the indifferent.
Advocates love your brand. To them, there is no credible alternative to the solution that you provide. Critics are the opposite: they would never consider buying you. These two groups are unlikely to move, and may not even be able to contemplate changing their minds. We find it easy to hear and believe things that fit our existing views, and hard to hear and believe things that oppose our existing views. Advocates will be inclined to either ignore or dismiss any bad news about the brand they love, and critics will be immune to any good news brands provide.
Practically speaking, this means only customers who are relatively indifferent to your brand will be open to influence either way. That’s a segment, and can have monetary consequences — Budweiser would love to capture 1% more of the beer market every quarter — but it’s unlikely to be an existential threat.
Actions May Cause Reactions
Overall, brands that take a side may lose some business. If a brand is seen as “blue,” “red” customers either may cut back on purchases or stop purchasing it entirely. What this may in turn lead to, however, is increased purchasing from customers on the other side. Call it a sorting rather than a loss. “Blue” customers may increase their purchases of a brand they see as supporting their values. A company may even acquire new blue customers that it had not previously served. Customer engagement may change: there may be more word-of-mouth, pro and con. Think about all the conversation around Budweiser’s recent Super Bowl ad retelling its founders’ immigrant roots. If you believe the old saw that “no publicity is bad publicity,” Budweiser got a lot out of free exposure out of that ad. Even if you don’t believe it, passionate blue engagement may offset passionate red engagement. All of this likely further diminishes the overall sales effect of taking a values-driven stand. It may even lead to a more coherent customer base that is easier to serve.
Consider Other Stakeholders
Looking at overall sales is probably the wrong answer here. The logic of small risk here also implies small returns. In the end, choosing a side probably doesn’t risk much or gain much for a firm in terms of sales; sales impact isn’t the way to make this decision.
Consider, then, two important stakeholders. First, your employees. People like coming to work at a company that they think reflects their values. “Purpose” brands, where organizations have ideals beyond pure profit, are not going away. To the extent that your company expresses values that current and potential employees applaud, you will (a) find it easier to attract and retain talent, and (b) get more engagement out of the employees you have. The latter is particularly important for service businesses where employees are integral to delivering the benefit.
Second, think about the partner organizations you work with. We rarely go to market alone. What does a value stand mean for your supply chain? What does it mean to your alliance partners?
Both of these likely have larger effects on your organization than immediate customer reactions, pro or con, because they influence the ability of your organization to execute its mission. Employees and partners may also sort themselves more slowly: if you lose a “red” supplier, how long does it take to find a “blue” one?
Disagreeing Without Being Disagreeable
The old saying when I was growing up was, “if you can’t say something nice, don’t say anything.” That is the safe, mass-market brand answer, but I’m not sure it’s the right answer for our times. If we never talk, we never change. What I do think brands can do is express values without demonizing opposing views. Calling people stupid doesn’t make them smarter. Conversation and simple good deeds trump, if you will, confrontation. Don’t worry so much about whether good values are good business. Worry about whether good values are good values. Be red, be blue, or just maybe, try to be a brand for everyone.
Bruce Clark is an Associate Professor of Marketing at the D’Amore-McKim School of Business at Northeastern University. He researches, teaches, and consults on managerial decision-making, especially regarding competitive marketing strategy and measuring marketing performance. This article is an expanded and edited version of one that appeared on LinkedIn under the title “Red Brand, Blue Brand.” It has benefited from the comments of my colleagues, Koen Pauwels and Yakov Bart.