What calculus should companies make when making a political stand?
What calculus should companies make when making a political stand?
The 2024 presidential election is roughly six weeks out, and political polarization is as intense as ever. But where exactly do — or should — companies fit in when it comes to politics? While many are keeping quiet about their stances on political issues, others are outspoken advocates for political and social causes. But such a tactic can alienate potential customers.
As part of our Office Politics series, we’re examining how companies shape political divides when they take sides or make a stand. What does it mean for the consumers who don’t agree? And is it a good business move to include politics in advertising?
To dig into some of the (potentially thorny) conversations some companies should have before coming out for or against certain policies or politicians, “Marketplace Morning Report” host David Brancaccio spoke with Eric Van Steenburg, a professor of marketing at the Jake Jabs College of Business and Entrepreneurship at Montana State University. The following is an edited transcript of their conversation.
David Brancaccio: There was a time where it was all the rage for companies to say that we have to stand for something, there are certain lines we will not cross as an institution, and to make it clear what side they’re on, on certain issues. You’ve tracked it over the years, and, you know, there’s some standout companies that have done just this, right?
Eric Van Steenburg: Absolutely. And I think, these days, companies are being short-sighted if they’re not thinking about what they stand for and how they want to leverage their values when it comes to some sort of political statement or social impact.
Brancaccio: Well, this comes from different stakeholders in part, right? But a key set of stakeholders are employees who often want their companies to come out and say, “This is right. This is wrong. What this candidate did is right or wrong.” And so you get pressure from within the organization to not remain opaque and neutral.
Van Steenburg: You know, because of polarization, people are self-selecting, and they’re self selecting a number of ways. And so people are choosing to go work for, be employed by companies who share the same political values as themselves.
Brancaccio: And let’s turn it to the consumer side, though. You have consumers who can make choices among competitors, and often the most power we have in the world is our dollars. And we can vote with our money for companies that we see as reflecting what we believe.
Van Steenburg: With self-selection becoming a bigger part of society through polarization, consumers are making decisions of do they want to be a customer of this company or that company? And they’re looking for these political cues to say, “this aligns with my perspective or my worldview,” or “that one does not align.” And they’ll make consumption decisions based on their perceived political advocacy of that corporation.
Brancaccio: And companies do this. I don’t know if you’ve run across it in a mall near you, but there’s a company called Penzeys. They do spices, you know: parsley, sage, rosemary and thyme. But I happen to be on their email marketing list, and when they’re trying to sell, you know, Herbes de Provence, they also carry political messages that have been in the past quite anti-Donald Trump. They take a firm stand in these emails. On the other side, there is a mobile phone company that will get you connected, called Patriot Mobile, and they are strongly allied with conservative causes. There are many examples of companies that are not, what do we say, politically neutral?
Van Steenburg: There’s some research that shows that consumers actually expect a company to take a political position on a social issue these days. And so it’s become part of what consumers are looking for when they’re making their purchase decisions. Now, companies run a risk, because not only could they alienate some portion of their audience by taking a political stance on something that disagrees with maybe some of their existing customers or customers who are considering purchasing from them, but they run a bigger risk if they take a political position or take a position on a social issue, and consumers believe that it does not fit with the corporate brand. And so if there’s a mismatch between what the brand is and the political position or social issue that they’re supporting, consumers will see that as overt marketing and completely turn away from it. So you’re actually better off not taking any sort of political or social position than taking one and having it not fit for your existing brand. However, consumers more and more are expecting — particularly young consumers, millennials, Gen Z — are expecting brands to take some political position on a social issue, and so they want to see that before they make a decision on their consumer behavior.
Brancaccio: It seems to me this is all so inconvenient for the companies, because you can’t fully predict in your customer base which way they’re leaning on some political issues, and you’re guaranteed to alienate some of them when you take a position. It seems to me that staying agnostic or staying out of politics might be a safer course for many companies.
Van Steenburg: For a larger company, that makes a lot of sense, because they’re going to have a much wider size audience. And so, yes — if they’ve got millions of customers, they’re not going to make some position that will alienate half of their customer base. That would be a bad marketing strategy. But for smaller companies — maybe a startup or a company that has, you know, began building its brand on something like, you know, they want to be the company of climate change or they want to be this company of entrepreneurship — whatever that brand position that they’re taking, it may make sense for them to adopt some political positions, because people will see that fits with the brand, and that’s who I want to spend my money with.
Brancaccio: Also, if you’re involved in a business that could be a commodity — let’s say you’re selling coffee retail — you’re looking for differentiators. You know, maybe your coffee tastes best, but one could be politics. I mean, there is a company called Black Rifle Coffee Company that leans conservative and is proud of it. It’s a differentiator.
Van Steenburg: Again, that’s marketing strategy. When you’re developing your brand and you’re building a brand strategy, you want to look for things that differentiate your brand. And if you choose to, you know, have a political issue or a political worldview be part of that brand, then that’s absolutely fine — particularly early on in the life of the organization. Like you said, Black Rifle was a pretty young company when they said, “This is the direction we want to take.”
Looking back, so was Ben & Jerry’s. When they first created their brand, they chose the opposite viewpoint, and they said, “We want to be sort of progressive with our political positioning, and that will become part of the Ben & Jerry’s brand.” So, you know, it’s a smart marketing strategy to do when you’re a young company.
Prior to polarization, nobody took positions on anything, at least not publicly. With this country and other other areas of the world getting more polarized, companies are being asked to do so. And a larger company needs to make a decision. You know, are we going to alienate a big percentage of our audience if we take a political position? And if so, how big is that that we’re going to alienate? And so it’s all calculated risk if they choose to go down that path.
Brancaccio: We’re talking to you here in 2024, defined in large part by this race for president here in the United States and increasing polarization in society, in workplaces. But it’s also some months after the Anheuser-Busch Bud Light situation, where a group of customers took exception to how Bud Light was marketing using a transgender influencer, and they lost a lot of sales. And it’s not just Anheuser-Busch, the brewery, and it’s not just Anheuser-Busch, the drinks conglomerate, that noticed this. So with all this going on, do you think it’s a moment where companies are thinking twice before taking a stand?
Van Steenburg: Well, I think they’ve got to, in reference to Bud Light — that brand owned by Anheuser-Busch and AB InBev — that spokesperson did not fit with the existing brand. That doesn’t mean that a company can’t still take a position; they absolutely can. They just need to think it through. What fits with our brand, in this particular case, what spokesperson fits with our brand, and who is our customer base, and what sort of, you know, political orientations might they have in viewing how we’re going to go about our marketing? And these are strategic decisions. This is marketing strategy that any big brand, any multinational corporation needs to think about. It doesn’t mean that they can’t take a position. It just means that they think about it strategically.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
