Transgender Rights? Citizens United? Should Brands Get Political? Taking a stance is a calculated risk, but one you might have to take if you are to remain relevant.
By Jeffrey Hayzlett Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
The election cycle in the United States is always contentious and incredibly lengthy. It's a complicated, drawn-out process where friends are lost and foes are made. However, it's not just the candidates duking it out for the chance to call 1600 Pennsylvania Avenue home. Brands have joined in the fray, especially this 2016 cycle.
While brands supporting certain candidates (political parties or causes) isn't exactly new, American politics have become more brand-centric in unprecedented ways. But, is it good business to get political? Or should brands stay out of politics altogether? It depends whom you ask.
Lately, there has been a massive outcry nationally about what many perceive as discriminatory laws in a handful of states.Those laws have caused brands to publicly address their displeasure. Some have even taken the stance of pulling back their business dealings until these laws are changed or repealed altogether.
In North Carolina, companies like PayPal, Lionsgate and Braeburn Pharmaceuticals have publicly, and vocally, expressed their opposition to the state's HB-2 bill, which prohibits localities from allowing transgender people to use restrooms and locker rooms of the gender with which they identify.
PayPal cancelled its planned $3.6 million operations center, becoming the second and largest company to pull its business out of the state. And Lionsgate decided against shooting a TV pilot in the state, opting to shift locations to Vancouver. Retail giant Target, meanwhile, also joined the political fray by stating that it would allow employees and customers to choose the restrooms and fitting rooms that correspond to their gender identity.
These companies have faced backlash from groups like the American Family Association, whose online petition called for a boycott of Target. This wasn't unexpected, but the fact that the association took its fight online with the "#BoycottTarget" hashtag begged the question whether it was aware that the forums being used (presumably Facebook and Twitter) have in place LGBT and trans-friendly policies.
In the commercial sphere overall, the question is, how effective can this campaign be? Can it really affect Target's bottom line? Probably not a lot, but that doesn't mean that the association won't publicly voice its opposition to Target's policy.
Nor does it mean that these fights won't go on: This year, in more than 30 states, almost 200 bills have been proposed that would limit or deny discrimination protections for LGBT individuals. Five have been passed into law, three have been vetoed and 144 have been withdrawn or died in committee.
Related: Accommodating an Employee's Religion Just Got Even More Complicated
The response has been huge, and brands have been a part of it, very publicly expressing their feelings against these so-called "religious freedom" laws. These reactions include:
Indiana
- Angie's List cancelled a $40 million headquarter expansion.
- Salesforce offered its employees relocation packages to leave the state because of what the company considered to be discriminatory legislation.
- Eli Lilly made financial contributions to Freedom Indiana and Indiana Competes.
Mississippi
- Nissan, Toyota and Ingalls Shipbuilding issued statements voicing their opposition to the state's "religious freedom" bill.
- MGM Resorts is helping spearhead opposition to that state's law, claiming it will harm tourism to the Gulf region.
Georgia
- NFL threatened to take the Super Bowl elsewhere should Georgia pass any discriminatory laws.
- Coca-Cola lobbied Governor Nathan Deal, successfully, into vetoing the bill.
More and more high-profile brands are feeling emboldened to address social and political issues without much fear of damage. Can they take such a hit? Sure. Nothing is 100 percent backlash-proof.
But the truth remains that customers vote with their wallets, and many millennials (and Gen Z behind them) are paying close attention to how companies are reacting. In fact, they are opting to work for companies that share their values and aren't afraid to take a stand. Taking a stand gives companies the opportunity to remain relevant to their customers and employees. Not to mention that taking a stand has helped companies generate a great deal of goodwill with a majority of their consumers.
Ben & Jerry's is a good example. The ice cream kings have ingrained social justice into their brand with the principle, "If you care about something, you have to be willing to risk it all -- your reputation, your values, your business -- for the greater good." The company is hardly shy about supporting causes that can be considered "hot-button" issues, such as climate change, LGBT rights and reversing the controversial Citizens United U.S. Supreme Court decision on campaign donations. Ben & Jerry's cofounders were not even afraid to get arrested.
While this might have been a winning formula for Ben & Jerry's, many business leaders aren't quite ready to be led away in handcuffs while protesting a cause.
For the most part, corporate leaders aren't motivated by politics, but by business concerns. They've come to realize that while profits make their businesses run smoothly, so do employees. Employees are what runs the company day in and day out and; in return, companies will do whatever they can to protect these people and create inclusive, attractive (especially to younger workers) work environments.
Becoming socially and politically aware is one of the shifts we are seeing in today's business landscape, and the numbers don't lie.
In fact, companies that support their LGBT workers do better in the stock market, according to research by Credit Suisse. Other companies have noticed the purchasing power of this community, estimated to be as high as $885 billion in the United States alone, and have launched specialty practices as a result.
The days when brands were afraid to take a stand on issues seem to be behind us. Today, many are taking the leap of faith afforded to them by an evolving, and more diverse, populace. What used to be considered fringe is now mainstream; and as businesspeople, we have to remain on the cutting edge of issues -- both political and social.
Being on the "cutting edge" may not mean we agree with everything that's transpiring, but this isn't about agreement. It's about recognizing that the world is changing and that diversity (of any kind) is an issue that must not be relegated to the back of the room. Ignoring it won't make it go away, and if lending your support helps your bottom line, why not join the fray?
According to a study by Cone Communications/Ebiquity Global CSR Study, nine in ten consumers expect companies to do more than make a profit. Consumers expect companies to act responsibly to address social and environmental issues. Eighty-four percent of consumers globally actively seek out responsible products whenever possible.
But brand activism doesn't affect just traditional consumerism. In the current election, it's resonating with this year's unusually charged political climate. In a recent New York Times article, brands such as Apple, AT&T, Coca-Cola, Google and Wal-Mart were described as reassessing their usual GOP Convention sponsorships for this July's convocation in Cleveland.
Intimations of violence by protest groups were also described.
And once again, brands were -- and still are -- faced with a dilemma: Listen to the public outcry of their customers not to go ahead with sponsorships, or risk their customers' wrath and sponsor anyway?
My advice? Avoid the convention altogether. Generally speaking, brands should stay away from politics, but with this year's election, transgender issues and more, they should put themselves smack onto the front lines of political change. CEOs should take stands on issues. They should position their marketing in a way that benefits the greater good.
In the end, it's up to each brand to determine how to address any specific issue. What works for one brand may not work for another. But the bottom line is this: Regardless of the stance your company has on a specific issue, the effects will be alternately good, bad and ugly.
Once you as a company decide to engage, you'll be walking a high wire with a very real potential for tumbling down. Taking a stance can have big consequences for your brand, but it's a calculated risk you might have to end up taking if you are to remain relevant.
Related: Why Politics and Business Don't Mix
A brand reflects a company's promise, and a stance taken is a delivery of that promise.
