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Is taking a stance right for your business?

Brands taking stances on sociopolitical issues is a relatively new trend that has been accelerating steadily in the last few months. Since Donald Trump took office, we’ve seen a few prime examples of corporations speaking out for or against political issues.

When President Trump signed an executive order in January that restricted travel from seven predominantly Muslim countries, the ride-hailing industry became a prime example of corporations’ responses to the current political climate. Uber temporarily canceled surge pricing at JFK International Airport in New York City after taxi drivers boycotted the executive order in protest. The move resulted in the #deleteuber hashtag and led to a pretty severe backlash.

Lyft, meanwhile, saw an attempt to differentiate itself from its primary competitor by announcing a $1 million donation to the American Civil Liberties Union. While Uber later set up a $3 million legal fund for immigrant drivers and asked President Trump to rescind the order, the damage had already been done. According to The Guardian, Lyft was the fourth-most-downloaded free app on the Apple App Store the following Monday, while Uber dropped to No. 13.

Brand politicization--which has proliferated in the tech industry, in particular, but has extended into the clothing industry with Nordstrom, the automobile industry with Cadillac, athletics and even the film industry--raises questions about how much is too much. At what point does a brand’s sociopolitical views begin to impact sales and its bottom line?

As is often the case, the answer depends on who your target audience is.

Forbes ran a great piece in 2015 examining corporations’ sociopolitical stances and its impact on the public’s perception of that brand. If your target audience contains demographics in the 18 to 25 and 26 to 35 age groups, expressing views on potentially controversial issues can be beneficial for your brand. According to Forbes, which used Qualmetrics (a private research software company) for the study, “when corporate stances are consistent with an individual’s own beliefs, those in the 18 to 25 and 26 to 35 age groups are most likely to demonstrate an increased intention to purchase from a company with a stance aligned to their own (8.1 percent and 21.1 percent respectively).”

Those numbers fall off drastically among audiences 56 years old and older, who are about 16 percent less likely to purchase from a company expressing political or social views.

A 2016 study from the Global Strategy Group goes into even greater detail. According to the GSG’s annual “Business and Politics” study, “81 percent of Americans believe that corporations should take action to address important issues facing society, [while] 88 percent believe corporations have the power to influence social change.” Those statistics become increasingly prominent in election years, when “Americans are especially receptive to corporations taking a stand on political issues that affect their business and are more inclined to say it’s important for companies to do so.”

Even more interestingly, the speed of response to breaking social or political news is equally important, according to the study: “Fully 62 percent of millennials think companies should respond to a current event within 72 hours.”

All of these statistics indicate, as does the GSG study, that brands taking stances on social or political issues is now an expectation rather than an anomaly. Consumers are more willing to engage with brands that speak out on current events, but only in ways that are authentic and true to the brand’s values. Taking a stance on an issue purely for the potential business benefit is a bad strategy, but if a particular issue aligns with your business objectives and company culture and values, know that many of your customers will respond positively to it.

We can help you strategize this decision the right way. Contact us at info@redfancommunications.com.

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