Should Companies Take Stands on Political Issues?
Image source: Wikipedia

Some experts say companies can promote their businesses, attract customers, and increase sales by taking a public stance on public issues. Researchers from Duke and Harvard say their research suggests that “CEO activism can sway public opinion – and also increase interest in buying the company’s products.” Research from Weber Shandwick reveals that millennials are significantly more likely to buy products from – as well as work for – companies if their CEOs take public stands on controversial issues that impact the company.

More than half of consumers say they buy or boycott brands based on the brand’s stance on a social or political issue, according to the 2017 Edelman Earned Brand report. Companies feel increasing pressure to take social or political stands. More than two-thirds of “belief-driven” buyers will not purchase products from a brand that remains silent on an issue they believe should be addressed.

Brands are not Politicians

Others warn that wading into social or political issues poses substantial risks. When they take sides, companies may alienate half of their potential customers. A political stand may please some of a company’s customers, but brands gain no benefit, warns J. Walker Smith, executive chairman of The Futures Co., part of the Kantar Group of WPP. Despite growing pressure from activist consumers, companies should think twice – even thrice — before jumping into politics, Smith writes in Marketing News. A political stance will not grow a brand or increase its stock value, but it can alienate consumers. Although public relations and marketing departments may believe they understand their audiences, predicting how large numbers of people will react to sensitive issues is extremely difficult.

Politicians routinely win by taking positions on issues, but brands are not politicians, Smith writes. Politicians seek to win elections. Brands seek to increase sales by winning new customers. They can’t afford to alienate a large percentage of their buyer base. Some think brands’ political stands can increase sales by strengthening loyalty of core audiences. However, loyalty does not increase a brand’s sales since loyal customers already regularly purchase its products. Instead, brands grow by gaining new customers.

“Brands prefer to build their franchises on common ground. Politicians would do well to emulate brands, rather than the other way around,” Smith says.

Avoid Controversial Issues

Other PR and marketing experts also urge companies to think long and hard before taking a stand on a political issue. Don’t take a position just for the sake of it. Examine the brand’s values, and analyze your customer base and other stakeholders.

Companies can avoid displeasing customers by supporting neutral, non-polarizing issues, advises Ricardo Casas of Fahrenheit Marketing, a Forbes Agency Council member. “I’ve seen companies commit serious PR blunders as they seek to align themselves with a segment of the community they serve, not realizing that they’re alienating the other, Cases says.

“Be transparent and honest with your core beliefs,” advises Kirk Deis of Treehouse 51, another Forbes Agency Council member. “If you can be true to yourself, haters will hate, but the fans will grow. Don’t let ‘pleasing everyone’ slow you down from sharing your brand with the world.”

Bottom Line: Should companies stake out public positions on political issues? The question is controversial in PR and marketing circles. While some say taking a stand can increase customer loyalty and boost brand value, others warn companies have little to gain and much to lose. All urge brands to carefully examine their values and deliberate their strategy cautiously and before proceeding. Rule of thumb: Take a stand only on public issues of real import to the company.

This article was originally published on the blog.

Sign-up for a free demo of the media monitoring & measurement dashboard.