Over the last few weeks, I have been interested to see how consumers have caused businesses to take overt political positions on social issues even when doing so alienates other potential clients. Business leaders are finding this new environment challenging, to say the least.
But businesses cannot run from this fact, says Richard Levick, the founder of Levick, a public relations and crisis management firm. The Supreme Court has expanded corporations’ rights to exercise freedom of speech and businesses have taken advantage of that expansion. Levick believes that with the right of free speech comes accountability.
Businesses now have what Levick calls a “corporate personality” that goes beyond the brand. The corporate personality reflects how a business conducts itself in commerce, and it is something that consumers can and do evaluate.
Beth Johnson, founder of RP3 Agency, a creative advertising firm, agrees with this observation about accountability, although she isn’t sure that you have to go as far as imputing a personality to a business. CEOs should focus on the reality that their business “will always be associated with the company you keep.” And not just for controversial associations. She sees every association as potentially relevant, since any association can have meaning for a particular customer.
The most recent example of businesses being aware of the issues of association and accountability is what has happened since the Parkland tragedy. Some businesses have severed their associations with the National Rifle Association and weapons manufacturers, ending corporate affiliation or marketing arrangements. Other businesses with relationships with the NRA or weapons manufacturers did not end or modify the relationships. Whether a business changed its relationships or didn’t, its actions did not receive universal approval; some people are very displeased. But these businesses felt that they had to make a choice and were willing to alienate at least some potential customers.
Interestingly, some businesses didn’t just curtail marketing or co-branding arrangements; they actually limited the revenue they could receive from their operations. Certain retailers unilaterally determined to limit access to certain firearms. At least one retailer stopped purchasing a manufacturer’s popular outdoor products because a sister company is a weapons manufacturer. Again, a choice to please some consumers while alienating others.
In some instances, they are forced to take these actions by consumers. Levick believes that because people are now so politically engaged, a business should be proactive and assume that everything it does will eventually be known and reflected on by consumers through their own political prisms. Levick sees this as an opportunity to better connect with consumers and create more loyalty. He calls this process “mercantile activism.” Mercantile activism is not political action to make changes. It is taking a political position to reassure and attract consumers.
How will businesses choose which political positions to take? Levick suggests that business leaders will need to watch political conversations and balance the size of constituencies for various viewpoints. They will need to make strategic choices and balance the commercial benefit of embracing some, while turning off others.
Does this mean that business leaders should now be watching public opinion polls? Johnson doesn’t believe we are at that point yet. However, she does think that “CEOs need to understand that these days consumers feel that one of the ways they can make a difference is with their wallets.”
All of this creates a very challenging moment for businesses. For years they have been able to pursue regulatory policies and social policies in their self-interest without any real accountability to their customers. This would appear to no longer be the case, at least for highly charged social issues like gun ownership.
The question is how much more broadly this phenomenon will spread. Will the consumers’ use of their collective buying power affect businesses’ campaign contributions and lobbying? Will it lead them to pay attention to their customers’ interests as much as to their own? Will they start thinking of the two as parallel instead of as opposed to each other? Could Americans resolve their frustration with political gridlock by voting with their dollars and supporting businesses whose values they respect?
These are questions that are worth watching. Maybe the democracy we cherish will ultimately be saved by consumer spending.