64 Percent of Customers Expect Brands To Take Positions on Issues. What Are the Risks?
Society is increasingly politically polarized, and with that comes the increasing politicization of brands and their actions.
Edelman’s 2018 Earned Brand study reported that 64 percent of consumers say they’ve made decisions on whether to buy or boycott a brand because of its position on an issue. Just as it’s getting harder and harder for a brand to stand on the sidelines, it has also never been more important for brands, when they do engage, to get it right.
At Lippincott, we have always advocated to our clients that to navigate a changing world, they need a strong foundation built by their brand purpose. We are constantly looking for best practices, and that’s why at this year’s SXSW Interactive Festival we sat down with leaders from Lyft, Patagonia and Airbnb to discuss how they navigate these challenges. Here’s what we found.
Using Brand Purpose As a Guide
Companies don’t inherently have permission to comment on the issues of the day. Building that permission takes time and consistency. And it takes more than a corporate social responsibility program.
According to Corley Kenna, senior director of global communications and PR at Patagonia, the company’s reputation of challenging government is rooted in 40+ years of advocacy. But it is also rooted in the company’s sense of who and why.
The willingness of customers to give Patagonia permission to engage in these issues comes not only from its activism, but from its labor practices, its profit sharing, and the transparency of its manufacturing and value chain, which “seeks not only to do less harm, but to do more good.”
Ensure the Values Are Rooted in Business Strategy
To define a company’s purpose and position it to last, brands need to be clear about their values and commitments. While the purpose can be aspirational, it must also be rooted in your business strategy, true to who you are, and achievable through your products and people. It needs to have tangibility, guiding your hiring, rewards, innovation, and giving.
While Lyft doesn’t have 40+ years to draw from, Joy Howard, CMO of Lyft and former CMO of Patagonia, notes that the two companies have a lot of similarities that have set them up for success. “Both of the companies were founded on really strong visions by the founders, and the values and the vision of the founders of Lyft still really animate the entire company today and drive everything that we do.”
Does Virtue Marketing Work?
So is there a framework or set of guidelines for selecting which of these societal issues to comment on?
Patagonia, Lyft and others have realized that the safer spaces for comment are in the areas that relate to their core business models or workforces. As Ms. Kenna pointed out, for Patagonia “that was not immigration, the wall or health care”—it was to protect the wild spaces their company was founded to explore.
Are the principles of an effective, responsible, value-led business incongruent with the goal of increasing shareholder value? No.
As companies see the success of the outspoken Patagonias of the world, we have seen a rise in virtuous marketing campaigns. But these campaigns will quickly be seen as superficial marketing vehicles if companies fail to link their claims and motives to deeper cultural beliefs and actions.
Audiences leveraging all the media and social media tools of the day can be brutal and unforgiving—a lesson that household brands from Pepsi to Uber have learned the hard way.
Be Ready To Take On the Criticism
In taking up the political mantle, Airbnb addressed a world that is increasingly geographically and politically insular with the campaign “Belong anywhere,” a literal expression of its purpose.
And when that campaign was challenged by exposure of host discrimination, Airbnb doubled down by introducing a community compact. As Nancy King, director of guest marketing at Airbnb, puts it, “The only path really to developing an authentic brand is consistency over time. [Consumers] look for brands that aren’t opportunistically showing up here and there, but brands that have a pretty well-defined ethos and they deliver on that over the course of time.”
The Evolving Role of Company Leadership
In the traditional organizational structure, product, marketing and policy were in charge of their own domains. But society has broadened its definition of marketing beyond product features and price to include policy, as well as moral and cultural values. And with it, the roles of leadership within companies are changing and getting harder, demanding both an operational skill set and a softer, empathetic one.
At purpose-driven brands, those organizational swimming lanes are being blurred, if not erased. This is especially true in technology companies, such as Lyft and Airbnb, where the community defines the product experience through the lens of the companies’ policies and values. The decisions to weigh in on societal issues or not are coming from the top, and the impact of those decisions radiate across the company.
To address these challenges, CEOs and CMOs need to have a broader skill set and a bold and inventive new playbook. The role is as much about operational excellence as it is social engagement and community building, and the tactics are as much sociopolitical as they are marketing, striving to build movements versus moments.
The era of being purpose-led can come with challenges. The risks are high, but so too are the rewards. For many companies on the outside looking in, there is both fear, trepidation and engagement envy—and a big unanswered question about how it all impacts the bottom line.
Yet when an audience member asked our panelists if the principles of an effective, responsible, value-led business are ultimately incongruent with the goal of increasing shareholder value, the answer was swift and unanimous: “No.”