When Politics Divide, Brands Focus On Unity

Throughout modern history, CEO’s largely avoided politics. President Donald Trump's polarizing point of view on the violence in Charlottesville abruptly changed that. CEO’s aren't compensated to use their positions as a personal soapbox or a political pulpit. As chief executive of a public company, the CEO is the primary steward of a company's brand. Wall Street has shown us that when a company’s leader doesn’t act in accordance with their brand’s values, investors and customers defect. Past events reveal that many CEO’s feel they can’t risk associating with the President’s comments and unpopular points of view. As the controversy surrounding President Trump’s reaction to the Charlottesville tragedy escalated, many high-profile corporate chiefs turned their backs on him to protect their companies’ brands. Amid growing talk of consumer boycotts and shareholder uprisings, leaders of companies like Campbell’s Soup, 3M, Under Armor, Merck, Intel, and others pulled out of the President’s business councils to distance themselves from values that don’t align with their own. Additionally, many of these departing corporate leaders took an opportunity to separate their organizations’ brand agendas from the President’s politics by publicly denouncing his behavior and aligning their own brands with values of inclusion, diversity, and sustainability.

Companies like Discover Financial, Visa, Mastercard, and Cloudfare scrambled to protect themselves from the threat of potential damage stemming from business relationships with alt-right hate groups. For instance, Discover Card announced in August it ended merchant agreements with extremist organizations that incite violence. Within the same day, dozens of companies providing payment processing, hosting, and other services followed suit. Even online dating site OKCupid banned a known white supremacist from its community, explaining on Twitter that “…a place to find love is no place for hate.”

A brand is a conceptual construct that has enduring value. Some of that value extends beyond goodwill and recognition. A brand’s value can show up in the company’s balance sheet. Organizations can’t afford to screw up their brands by associating with people and causes that don’t match their customers’ core values. This is true not only of commercial brands, but non-profits as well. As of the close of business Friday, six well-known non-profit organizations, including The American Red Cross, The Salvation Army, and Susan G. Komen for the Cure announced they were pulling out of contracts to host high-profile fundraising events at President Trump’s luxurious Mar-a-Lago Resort.

In an official statement, the American Red Cross said it canceled its bookings because the President's property has “become a source of controversy and pain for many of our volunteers, employees and supporters.” On the subject of canceling their annual gala, The American Cancer Society explained, “Our values and commitment to diversity are critical as we work to address the impact of cancer in every community. It has become increasingly clear that the challenge to those values is outweighing other business considerations.” These sentiments underscore how delicate a brand’s relationship is with its customers and supporters.

Savvy brands understand they don’t just represent what the organizations behind them do; their brands unite their supporters around a shared set of values. They understand that their brands are made up of their purpose, their values, and their people, including their customers, employees, and even the other organizations with which they do business.

But in the same way that associations with a political issue can damage a brand, positive associations and open declarations of its values can accelerate a brand’s growth and customer loyalty. For example, before Charlottesville events, the Tiki Brand was relatively unknown. Most consumers knew Tiki torches as an accessory for backyard barbeques but didn’t necessarily associate the product with an overarching brand with its own set of beliefs and values. But when hundreds of people espousing white nationalist, neo-Nazi, and Klux Klux Klan ideology marched across the University of Virginia campus spewing racist taunts illuminated by Tiki torches, the brand was unintentionally bestowed with negative associations. In an effort to prevent damage to their brand via social media posts bearing the hashtag #TikiTorchNazis, Tiki turned immediately to social media to overtly disassociate its brand from these groups and their racist agendas.

Their swift, public denouncement of the protesters and their message earned them the recognition and adoration of tens of thousands of new fans and, conceivably, new customers. As a result, the Tiki brand is now top of mind for exponentially more people than it’s ever been.

The previously unknown 70-person Wisconsin company that makes Tiki torches received an unexpected boost and may forever be known as “one of the good guys.” With the rise of the activist consumer, it’s nearly impossible for brands to avoid the polarizing political issues of the moment. Expressions of anger or support of social and political issues through consumer activism, boycotts, and hashtag politicking are emblematic of the complex relationship between brands and their customers’ personal values. They are also a reminder that a brand’s true owners are its customers.

Since the beginning of the Trump presidency, it has seemed that brands are more inclined than ever to speak out on social and political issues. It’s as if corporate leaders recognize that we are so divided as a nation that consumers want to know if they are buying “red or blue.” While millions of consumers headed to social media this week to openly share their disdain for President Trump, very few brands mentioned the President by name. That’s because they understand, while it’s important for their brands to communicate that they value inclusion and diversity, it can be dangerous for them to play character politics.

Photo Courtesy of NYMag

The strongest brands in the world transcend their products and marketing campaigns to create enduring relationships with their customers. They elevate their customers’ self-concepts and make them heroes in their own life stories. They align with their customers’ values. They stand up for what they believe. Those companies tend to perform better financially in the long run by forging strong bonds with their customers through their purpose and shared values. When all is right with the world, brands enjoy the benefits of those bonds. But when brands find themselves on the wrong side of politics they risk alienating portions of their customer bases. The lesson in this for brands is that they need to proceed with caution when they take a position.