In an article I wrote a few weeks ago I posited four imperatives that, I believe, are emerging from the pandemic.
One of those imperatives was experience which I then broke down into four dimensions: customer, employee, stakeholder and leader.
In three of the dimensions (customer, employee and stakeholder), I suggested that environmental and societal concerns were playing an increasingly important part in them.
Here’s some data cited in the recent KPMG Nunwood 2020 CEE research ‘Meet Your New Customer’ report that supports that idea:
- 90% of customers are willing to pay more for ethical retailers. Source: KPMG Me, My Life, My Wallet 2020
- 71% of customers say if they perceive that a brand is putting profit over people, they will lose trust in that brand forever. Source: Edelman Trust Index
- Over a third feel it is more important that the brand’s values match their own – 52% for ages 18-34 Source: KPMG Nunwood.
- 56% say the environmental and social practices of a company have an impact when choosing to buy from them. Source: KPMG Me, My Life, My Wallet 2020
The report goes on to suggest that many firms are now revisiting and redefining their purpose and practices in the context of their societal and environmental impact.
It then goes further and suggests that we are entering an “integrity economy”, where the ethics of an organization are becoming just as important as its products and services and a company’s environmental and social credentials are becoming an increasingly important factor in purchase decisions.
Now, when it comes to the environment, it is pretty clear that firms should be striving to achieve things like a sustainable and responsible use of resources, a significant reduction of or elimination of all waste and the overall achievement of a carbon-neutral state if not better.
However, on the social side, while we have seen many organizations strive for diversity, inclusion and equality, other data suggests that many customers are open to brands going further and are demanding that societal concerns also include political issues.
According to recent research from Adzooma, the costs and benefits of a brand becoming more political is complicated when you consider the impact of political statements or politically motivated actions on brand followers and reputation as well as the impact on a customers propensity to buy.
When it comes to followers if a brand makes a political statement Adzooma’s research shows that 27.5% of people say that they would be likely to follow that brand on social media compared to 42.2% saying they would be unlikely to follow the brand on social media.
Moreover, when it comes to reputation, 22.6% of people reported that if a brand made political statements, it would improve their opinion of the brand. In comparison, 37.1% of people said it would harm their perception of the brand.
Thus, making political statements could have a net negative impact on both a brand’s following and its reputation.
However, when we consider the impact of political statements on a customers propensity to buy, on the one hand, 63% of people said they are more likely to buy from a brand that speaks out about politics. In contrast, only 17.4% of people said that it would harm their purchasing decisions.
But, if a brand makes a political statement or takes a politically motivated stand on a particular issue and their customers disagree with them, then 67.5% of people state that they wouldn’t buy from them.
So, there’s the complication.
While becoming a more political brand could have a negative impact on both the brand’s social media following and overall reputation, it could also drive new customers and more sales. But, this will only happen if a brand’s customers agree with its stance.
Therein lies the risk behind becoming more of a political brand.
However, let’s consider the experience of other brands like Lush, Levi’s, Nike, Ben & Jerry’s, Jigsaw, Patagonia, Budweiser, Airbnb and Ryanair, for example, who have all taken political stands in the past and many of them continue to do. Their popularity may have taken a hit in some quarters but, overall, it doesn’t seem to have done them any economic harm, and they have, as a result, stood out among their customers and employees.
Therefore, before taking a political stand, brand and experience leaders need to ask themselves:
- What do they and their brand stand for?
- How well do they know both their customers and their employees and what matters to them?
- Finally, they should ask themselves whether their brand would benefit most from more followers and a better reputation, or would it be better served by customers that align with them and buy more from them?
Only then will they be equipped to gauge whether they should and how they can become a more political brand.
This post was originally published on Forbes.com.
Thanks to The Works Design Communications for the image.