We are living in a new world today, where contentious decisions by Trump are creating unexpected ripple effects throughout society, government and the business community. Controversy becomes the norm, and reactions by all sides are more intense than ever, even stimulating passions among heretofore quiet consumers. These hyper partisan consumers are now demanding to know where their favorite brands stand or how they are reacting to these major decisions. But now many big brands see these emotional reactions as an opportunity to more positively engage with their customers and strengthen their bond with them.
The latest and most profound example is Trump’s decision to withdraw from the Paris climate agreement. No question, most Americans disagreed with this action – 70% believe the U.S. should remain in the Paris agreement, versus just 13% opposing the accord (source: U.S. News and World Report). This feeling was widespread too, as a majority of people in all 50 states support this agreement, and consumers abroad who are more environmentally focused were even more adamant in their anger.
More important is an emerging trend of increasing engagement by consumers on such issues and related to this, their insistence that various institutions in our society take a stand – e.g. leading corporations, state governors and big cities. Major brands have always been apolitical on such social issues, as they don’t want to alienate any segments of their customer base. However, when the public response to issues like climate change is so one-sided, the opportunity for companies to re-enforce their commitment for a better environment outweighs the risks of offending a smaller group of consumers.
For this unpopular decision by Trump, CEO’s of blue chip companies like GE, Apple, Google, Disney WalMart, Tesla, etc. have all expressed disappointment. For example, Jeff Inmelt, CEO of GE, responded in a blog post: “we believe climate change is real and the science is well accepted. We hope that the United States continues to play a constructive role in furthering solutions to these challenges, and at GE we will continue to lead with our technology and actions”. Basically they are saying that the targets of the Paris agreement are important, and their companies will remain committed to achieving these goals.
The marketing ground rules have changed radically over the past few years, driven not only by recent controversial political decisions, but also by social media spreading individual opinions so quickly and exacerbating the extreme negativity by activists. Companies can no longer ignore the passions of its customers. Their brand reputation is at risk if they say nothing, or announce a position that is perceived as not authentic and hence not trusted.
Smart companies are instead taking the initiative in response to unpopular decisions to forcefully state their position on a controversial issue like climate change. The potential benefits are clear – i.e. to encourage more positive engagement with their primary consumers, and in doing so, strengthen their connection (and hopefully loyalty) with them. The opportunity to demonstrate such visible support is timely and very relevant, especially for Millennials who feel particularly strong about climate change. A recent survey quoted by the New Republic disclosed that two thirds of Millennial consumers will avoid a brand they perceive to be hurting the environment. Another report by Deloitte reaffirmed the growing influence of these Millennials which found that almost two-thirds are not only concerned with the state of the world, but also feel obliged to change something.
These surprising declarations by corporate CEOs on social issues like climate change are viewed as less risky since there is such broad support by many other institutions in our society. In particular, the “We Are Still In” movement led by former Mayor Bloomberg has coordinated more than 1,000 companies and investment groups to express their disagreement with Trump’s withdrawal for the Paris agreement, and to reiterate their support for the original targets.
This recent unpopular rejection could be the proverbial tip of the iceberg that may galvanize brands to further emphasize their positions on other social issues. Major tech brands like Apple, Google, IBM, Microsoft and AirBnB have already declared their support for the transgender community. Another new initiative was recently announced, “CEO Action for Diversity and Inclusion”, with more than 150 top corporate executives committing to a greater employee dialogue of such sensitive issues. The overwhelming disagreement with this climate change could encourage other brands to confidently take a stand on these social issues in the future.
Another fundamental principle that is prompting a re-evaluation is that the sole goal of a corporation is to maximize shareholder value/wealth. Today more and more companies are expanding this underlying rationale to include giving back to society, in contrast to the single minded focus by most investors. Tim Cook, CEO of Apple, stated that “climate deniers who disagree with his strategy to cut carbon emissions should disinvest from the company”.
It is truly a new world for brands. The internet poses both risks and opportunities for brands, but the radical changes in every aspect of our political and business rules of behavior can offer well prepared brands new advantages; they can more proactively identify with various social causes that reflect their values and hence further engage their customers and solidify their bond with them, which is the heart of good branding.
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