Companies bailing on Republicans but is it too late?

SUMMARY: Conventional wisdom historically has been for brands and companies to stay out of politics, at least as it relates to their public relations and marketing messaging, but over the past week, we’ve really seen a shift. Does it matter to consumers?

Trump has already lied repeatedly, praised white supremacists who marched on Charlottesville, and viciously attacked people and companies on Twitter even while giving them a huge tax cut. Still, the latest violence has turned people against the whole Republican party.

The corporate promises on political donations may also add up to much less than they seem. JPMorgan Chase, Citigroup, Facebook, and Microsoft have suspended all donations from their political action committees or PACs. But these blanket pledges come conveniently early in the next election cycle when few candidates are fundraising actively. They may not last.

Many companies now claim to be looking beyond pure profits to a larger social purpose. The next few months will put that to the test. The Democrats want to raise taxes and regulate more tightly, but they control Congress by the narrowest of margins. The CEO I met in 2018 was happy to take a tax cut even if it came with a side helping of praise for violent racists. How many of those making pious announcements today would make the same trade again?

According to Harvard Business Review “researchers surveyed 168 managers across industries, as well as advanced MBA students, to find out how business activism affects consumer perceptions. They found that people are less swayed by corporate advocacy than has been widely reported. When participants were told a company had conservative values, it was more negatively perceived, but when they were told a company had liberal values, their opinions of it remained neutral. They also found that women perceived organizations that are involved in political activity more negatively than men. Finally, they discovered that participants generally acknowledged that political advocacy is both a way for companies to connect with customers and promote their brand. Using advocacy to advertise to target audiences isn’t seen as manipulative pandering. Rather, it’s seen as common practice.”

Customers, especially millennials and Gen Z, are holding brands to a higher social standardthan before. People overwhelmingly prefer to buy from companies that share their beliefs and values, especially now, in the midst of a pandemic-induced recession when spending is limited. Brands appear eager to demonstrate care for their customers and employees, and given the massive wave of social unrest, it’s natural for them to want to appear as compassionate allies. Yet, people are sensitive to tone-deaf or empty statements, and there’s no shortage of blunt criticisms online.

Consumers are smart enough to understand that our political system is driven largely by money but they aren’t going to research every brand they buy to see who they are giving money to support. However, when the national media spotlights that a brand, like My Pillow, is standing by someone who has lied and incited violence that’s a different story.

Goya had a different response. Despite four weeks on the public stage, just $10 million of that free marketing was positive — and the brand received $47 million worth of negative publicity. Did it affect their sales? We really don’t know because they’re a private company, but store managers have said sales have defiantly slowed.

The real question with all this is, “should brands get political?”. My answer has been for major issues and clear wrongdoing “yes.” It’s becoming more of a brand equity issue, or many brands and consumers want socially responsible brands.

Companies bailing on Republicans but is it too late?

About richmeyer

Rich is a passionate marketer who is able to quickly understand what turns a prospect into a customer. He challenges the status quo and always asks "what can we do better"? He knows how to take analytics and turn them into opportunities and he is a great communicator.

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