America’s increasingly bitter sociopolitical divide is coming to the business community, with unknown consequences. We’ve been moving down this path for a while now, but the pace is accelerating and the breadth of the sociopolitical issues where businesses are taking—or being asked (or coerced) to take—sides is broadening. For businesses, it’s no longer a question of whether this is happening, but how to handle it and when.
Let’s look at a few recent examples:
The Wall Street Journal published a fascinating article this week called “Are Your Jeans Red or Blue,” which includes graphical data from the Simmons National Consumer Study, 2004-2018, via MRI-Simmons. The chart shows how some brands have become more identified with Democrats or Republicans. The article attributes this to “a combination of brands more often publicizing their social and political stances, and the larger geographical split in politics, which affects what consumers buy.” This isn’t just happening with media companies like CNN and Fox News; it’s happening with Levi’s and Wrangler, Volkswagen and GM, the NBA and NASCAR, and Starbucks and Chick-fil-A. As the article notes, in 2004, the percentage of Chick-fil-A customers who were Republicans or Democrats was roughly equal. In 2018, more were Republicans (41.8%) than Democrats (33.6%). If you’re in marketing, you need to read this WSJ article and the related research data.
But even conservative Chick-fil-A is not immune to sociopolitical pressure. This week, the company announced it would narrow it’s charitable giving to reduce allegations that it supports organizations that are against same sex marriage or anti-gay. So, charities like the Salvation Army and the Fellowship of Christian Athletes were cut from its donation list. (Ask what that means for the Salvation Army’s holiday kettles at a location near you. Will stores be encouraged to force them to go someplace else?)
Earlier, we’ve seen the decisions by Dick’s and Walmart to curtail their sale of guns and certain types of ammunition, and the decisions by the NCAA and large companies to boycott North Carolina for games and meetings based on that state’s ill-fated law about bathroom access.
Then there’s the example of Hong Kong and China, where the issue goes well beyond the NBA coach’s tweet that started the uproar from Beijing and the blowback from many Americans. Our leading tech companies thread this needle every day, from cancelling apps that China deems dangerous to censoring social media within China to pulling some services out of China entirely. (China gets the news, but Russia has its own firewall with similar issues.) As the NBA situation shows, these companies need to be concerned about reaction in the United States as well as in China and other foreign venues.
Hong Kong also offers an example of what happens when politics runs into the streets. What started as a protest over a proposed law has torn society apart, with disastrous effects for businesses and the economy. As the polarization has grown, restaurants and other businesses have taken (or have been accused of taking) sides and been identified with blue or yellow window signs or shown on online maps with blue or yellow dots. Locals say they prefer to eat with others who agree with their political views and avoid others. Is this our future, with red and blue?
For many businesses, dealing with this so far has just required more sophisticated Marketing 101—supporting causes and issues that build affinity with the company’s best customers. So, we see Nike running its Kaepernick ads and large consumer companies supporting social issues like diversity and equality that carry broad support. They want to appear progressive on sociopolitical issues that are relatively safe for their target demographics but avoid issues where the relative return could offend more than they attract. As Nike founder and former CEO Philip Knight said at Stanford recently, “It doesn’t matter how many people hate your brand as long as enough people love it.” That may work for Nike, which has customers that lean heavily Democratic, but not every business has the demographics or the gutsy corporate culture needed to make such calls and withstand the customer and political backlash.
As American society becomes more bitterly divided over politics, the Marketing 101 judgments are likely to become more difficult—and also riskier. They’re also likely to be affected by changing demographics and (just to be optimistic) evolving changes in the parties’ relative support for various socio-political issues. One interesting data point comes from the research the WSJ did for its article. Based on a study of 2,528 brands, products and stores, the Journal found “the number of products skewing Democratic by at least 3 percentage points rose to 309 in 2018 from 192 in 2004. Meanwhile the number of products with a Republican tilt declined to 153 from 214.” Memo to Republicans: There’s a message there.
To date, most of the socio-political stands taken by American businesses have been issue-driven, not candidate-driven or party-centric. Hopefully, that will continue for the foreseeable future. But the unfortunate reality is that Democrats and Republicans and their respective candidates have increasingly calcified views of many of our most important sociopolitical issues. We’ve moved past the era when engagement and compromise were an essential part of governance. Today, both parties expect virtually absolute party loyalty. Discussing compromise on key issues with members of the other party is not only out of style; it’s viewed as unacceptable. So, while businesses may only be under pressure to support particular sociopolitical issues, those positions are increasingly attributable to the views of one party or the other. As the issues move from those with broad bipartisan support to those with more extensive differences between the parties or between U.S. values and those of other nations, the marketing challenges faced by American businesses will only increase.
From my viewpoint, the politicization of American business is a dangerous trend for businesses and our society as a whole, regardless of whose politics wins or loses.
From a business standpoint, it increases the risk of offending customers, politicians and elected officials. It forces businesses to take a stand on issues that the business may be ambivalent about. It raises the risk that the business’ position may be different from the views of its employees. Social activists would say, “Yes, that’s right. The business needs to take a stand—our stand—on the important issues involved. Once our views win out, the business will be glad it helped us create change.” Most businesses didn’t sign up for that, particularly as the issues and demands move to the far ends of the spectrum.
From a societal standpoint, extending the bitter partisan divide of our politics into business, sports and even friendships makes engagement and compromise even more difficult. Everything gets assessed based on socio-political positions. While changing demographics may shift the percentages of support for one party or the other over time, America is likely to be bitterly divided on its politics and many sociopolitical issues for some time, even if one party sweeps control of the White House and both houses of Congress in 2020.
For the social activists advocating change, the trends driving America’s partisan divide into business are a powerful opportunity, made even better by the Democrats’ move to the progressive side of the party, the anger fueled by the impeachment efforts and the approaching 2020 election. We’re likely to see efforts to capitalize on these trends as we move toward November 2020. More and more businesses are going to be pressed to take a stand on sociopolitical issues.
When your customers ask, or the politicians, media or social activists inquire, what will your business’ position be on the sociopolitical issues of the day? Is your company ready to take a public stand? If so or if not, what will the consequences be?
Author’s Note: I’ve been interested in this topic for several years. In 2017, I wrote an article called “The Slippery Slope of Sporting Event Protests for Sports Sponsors.” Back then, the issue was the national anthem at NFL games. Seems simple by comparison. In August of this year, I raised some broader issues in an article entitled, “If your Company could Sponsor America, would it? Should it?” That same month, I released a novel called Intentional Consequences, which spins a political thriller story in the context of America’s deeply-divided politics and new technologies that can help political operatives and nations manipulate public opinion.
This article is based on an article published by the author on LinkedIn on November 20, 2019.
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