Consumers Demand a Stance on Social and Political Issues. Are You Ready to Speak Out?
The trend toward the Dollar Democracy
Consumer activism is nothing new. Americans have been calling for consumer-led direct action since before they were Americans. From the Boston Tea Party to the rejection of South African-made products during the Apartheid era, boycotts have long held an important place in American society.
Yet, arguably, never before has so much public pressure been placed on companies to take a stand alongside their customers. Thanks to social media, today’s conscientious consumers have an unprecedented voice, and companies that do not sit up and take action are doomed to suffer damage to their reputations—and their profits.
There has been a veritable laundry list of social justice movements in recent memory—from voting rights to human trafficking—but the one that takes center stage is the Black Lives Matter (BLM) movement against police brutality. With the unjustified deaths of victims like George Floyd and Breonna Taylor comes an hour of reckoning for corporations. Should they take a stand or strive for neutrality?
Increasingly, executives realize that sitting on the fence is no longer an option. Their customers demand change. So many companies such as Nike, Amazon, Google, and CitiGroup have issued advertisements or statements in support of either diversity in general or BLM in particular.
Yet, these public projections of values aligned with their conscientious consumers also expose a company to scrutiny. Brands must proactively evaluate whether their practices and social impact efforts live up to their purported values. Savvy consumers understand the difference between lip service and true institutional change, and they aren’t shy about voicing their displeasure whenever hypocrisy surfaces.
Consumers demand a stance on social and political issues
In America, society has become polarized to a degree unprecedented in the modern era. As consumers become far more politically and socially conscious, they are more likely to vote on issues with their dollars, believing it to be immoral to purchase products from a company that exhibits values opposed to their own.
In 2018, 81% of Americans believed that companies should take action against racial inequality. During 2020, that figure jumped to 85%. These consumers don’t hesitate to speak their minds, either. About 53% of consumers who aren’t happy with how a company responds to social issues will voice their complaints. Perhaps more telling, 47% will refuse to purchase that company’s products.
But should these statistics be surprising, given society’s frustration with the slow pace of governmental change? A worldwide survey by Edelman discovered that 53% of people believe that corporations are in a better position to improve society than government, and 54% believe that convincing brands to act is easier than compelling government-led changes.
Edelman refers to this phenomenon as “Brand Democracy,” noting that “Brands are now being pushed to go beyond their classic business interests to become advocates.”
This trend is fueling values-based marketing messaging, which is nearly as likely to convince consumers to purchase product-focused marketing messaging. In effect, products themselves become vehicles for positive change.
Even if consumers have previously purchased a company’s products, they are willing to discontinue their patronage for the sake of a boycott. One survey found that 35% of Generation X consumers and 33% of millennials fit this description. In fact, a full 53% of respondents claimed they would stop shopping at their favorite retailer if it took a misstep on social or political issues.
Yet, the term “Brand Democracy” is somewhat misleading, as it is the consumers who are the lynchpins of corporate efforts to effect change. Rather, this new “Dollar Democracy” demands that companies take a stand. Neutrality is no longer commercially viable. Edelman has found that 77% of consumers will cease purchasing a company’s products if that company fails to take a stand on social or political issues.
Marketing messaging is a primary method for communicating a brand’s values and stances, yet today’s consumer demands more than superficial statements. To thrive in the Dollar Democracy, it is the governance of a corporation that must influence positive brand perceptions that drive purchasing decisions.
It’s no secret that exorbitant salaries of C-suite executives have long been under public scrutiny, particularly when they are grossly out of sync with the average salaries of their workers. However, taking a pay cut is no longer enough to please conscientious consumers. Consumers demand that the overall values, beliefs, and, most importantly, executives' actions be aligned with positive social change.
As examples, consider Jamie Dimon of JPMorgan Chase, who took a knee with staff in solidarity with Colin Kaepernick—the former quarterback still blacklisted for taking a stance against police brutality. Or, consider Alexis Ohanian, the founder of Reddit, who took the dramatic action of resigning from the board to allow for Reddit’s first-ever Black director.
Real change requires fluency and investment
The main problem with companies taking a stance for or against any social or political issue is that too often, those stances are purely reactionary and superficial. Companies issue statements of solidarity, yet they fail to take the proactive measure of effecting institutional and structural changes. In essence, they trumpet diversity against an all-white backdrop.
Remember Amazon, Google, and CitiGroup, which all issued statements supporting diversity and/or BLM? Any reasonably Internet-savvy consumer can easily determine that CitiGroup and Google donated to politicians who earned “F” ratings from the National Association for the Advancement of Colored People. (NAACP’s annual Civil Rights Legislative Report Card rates politicians based on their track record of voting on civil rights issues.)
And Amazon? The company’s tweet against police brutality and in solidarity with BLM was quickly countered by a tweet from the American Civil Liberties Union, which called out the e-commerce giant’s hypocrisy for selling the face recognition technology that enables police abuse.
Corporate hypocrisy takes center stage when executives fail to first become fluent about an issue before taking a stance. It’s essential for every company to first integrate true equity into their internal operations and governance structure before taking a public position.
In contrast to corporate hypocrisy, corporate social responsibility is an asset that can pay dividends. Defined by its social accountability to the company, the public, and the brand’s stakeholders, corporate social responsibility is a business model that can drive social change and revenue.
The impact of transparency and accountability
Many companies have historically demonstrated a willingness to take morally objectionable actions in the never-ending quest for the almighty dollar. During the Great Depression, Henry Ford—then the richest man in the world—laid-off workers, complaining they weren’t working hard enough.
When attempts were made to unionize and improve working conditions, Ford ordered his security team to fire into the previously peaceful crowd. Four were killed. Workers—not Ford and his thugs—were arrested.
Yet, the word “profitability” need not be synonymous with “corporate greed.” During this hour of reckoning, consumers hold the power to coerce companies to live up to their potential to become a force for good. And as more companies take a stand, executives can realize their potential to become effective thought leaders and activists with the power to spur true social change.
For companies at what Engage for Good refers to as “the intersection of profit and purpose,” the time is ripe to take a stand, to self-scrutinize, and to work toward change. It’s a lesson that some companies learn the hard way.
When Colin Kaepernick first took a knee to protest police brutality, this hugely controversial move sparked calls to boycott NFL games. Yet, as early as 2018, Nike stepped up in support of Kaepernick, choosing him as the face for their ad campaign.
And in 2020, Nike issued a somber ad in support of protests against police brutality. It included a twist on their classic slogan, “Just do it.” The new ad read, “For Once, Don’t Do It.”
Nike has not been immune to blowback. Even as Nike saw sales surge after publicly supporting Kaepernick, critics pointed out that of the company’s 300-plus vice presidents, fewer than 10% were people of color. Criticism is a true vehicle of change, prompting Nike to step up its diversity measures.
As consumers demand greater transparency and corporate activism, executives have no choice but to adapt… or watch as their sales plummet.