The Risks for Brands in Doing the Right Thing

Posted on by Emma Monks

The Risks for Brands in Doing the Right Thing

The choice seems like an easy one. Stand up for what you believe in. Commit to your brand values and demonstrate them in your actions, not just your words.

The societal and financial benefits of a business acting in good conscience are supported by numerous metrics. But it can come at a cost.

Doing the right thing—from supporting the COVID-19 response to taking a stand on social justice issues—can pose a strategic risk for businesses. At a time when people are more polarized than ever, personal feelings and emotions rule the day.

When a brand aligns with the profoundly held beliefs of one group of consumers, it can alienate another faction of once-loyal customers and prospects, leading to a salvo of opinionated complaints.

The most powerful connection between brands and their customers is shared values. When a brand expresses support for an issue that doesn’t align with some customers’ values, the object of their ire is the brand, not unresponsive customer service or substandard product features.

Angry calls to 800 numbers and word-of-mouth ridicule are dwarfed by the massive volume of outrage and condemnation on social media.

Going directly to a company’s owned social media pages makes it easier, faster, and more self-satisfying for consumers to hold a brand accountable. Everyone with a smartphone has access to a platform to publicly scold and lecture—and they feel more emboldened than ever to confront brands online.

A single negative post can be viewed, distributed, and amplified thousands of times before ever being detected, let alone addressed, by a brand. Leaders are in a tough spot as they wrestle with the role of “brand purpose” in today’s socially-charged environment while they seek the early-warning advantage needed to stay ahead of reputational and financial risks that spread and scale online at lightning speed.

THE NEW IMPORTANCE OF BRAND PURPOSE

Brand purpose stems from the values and principles that guide your business, bind employees, and support customers through difficult times. Its role has taken on a new significance in the face of the most globally-disruptive circumstances in generations.

Rishad Tobaccowala, the author of “Restoring the Soul of Business” and Crisp advisory board member, said a brand’s choice regarding purpose-driven action used to be clear. “In the past, we were told that we should not take a stand, and we should not piss off people,” he said. “We understood that there is a risk in doing the right thing because you get backlash at scale in an age of global social media.”

In a world with new rules of online engagement and significantly higher demands from consumers, brands have to figure out their place in the middle of all this while still doing great business.

There are no easy choices. Taking a stand means taking a risk, not only with people in opposition to that stance but even among those with shared values.

Brand purpose can be misinterpreted as a cheap marketing ploy that exploits issues for profit and public relations. Perceived generic, hollow, or hypocritical sentiments within clumsy attempts to do the right thing can quickly be debunked, ridiculed, and shared virally across social media.

On the other hand, if your brand sits on the sidelines while your competitors take up the cause of social activism or pandemic relief, you also run the risk of public backlash from consumers who expect more from your brand. 

MAKING A CASE FOR DOING THE RIGHT THING

For many brands, the reasons to embrace purpose are readily apparent.

Companies with a clearly defined sense of purpose are up to 50% more likely to successfully expand into a new market. When consumers think a brand has a strong purpose, they are six times more likely to protect the company in the event of a misstep or  public  criticism.

Seventy-one percent of millennials hope companies will take the lead on the social issues they find important. Eighty-five percent of executives believe that being a purpose-driven company drives profit. Ethical factors are three times more important to consumer trust than brand competence. Eighty-three percent of millennials want their values to align with the brands they support.

“The problem is that our obsession with making the business case for ethics makes us sound apologetic and hollow,” Alison Taylor writes in the Harvard Business Review. “After all, there is also a business case for tax avoidance, deregulation, and even higher death rates.”

The Risk in Doing the Right Thing - CTAA growing body of evidence shows that ethical companies outperform financially over time. Pressure to perform in the short term, however, forces many brands to miss out on the long-term benefits of ethical initiatives.

“A company has purpose when it deliberately prioritizes its ethical principles over profit-making opportunities, at least some of the time,” Taylor says. “We tie ourselves in knots trying to skate over this reality. The result is that employees and customers today see corporations as hypocrites, spouting meaningless value statements in glossy brochures.”

In a time of crisis, brands will be judged by how, not just whether, they respond. When you commit to values-based marketing, find ways to authentically connect with your customers, and act in alignment with your expressed principles, you can then continue to build relationships and defend your reputation.

BUILD COMMUNITY AROUND YOUR BRAND PURPOSE

Today’s marketing environment requires brands to step up and demonstrate a sense of social responsibility expressed in decisive action, not empty platitudes—a strategy backed up by recent surveys.

More than three-quarters of consumers said it is deeply important that companies respond to racial injustices to earn or keep their trust. Seventy-one percent of Americans believe companies have more responsibility than ever before to address social justice issues, and 56% say companies that do not talk about social justice issues in their marketing or communications are out of touch.

When it comes to the COVID-19 pandemic, 40% of consumers think it’s good for brands to find a way to stay relevant amid the coronavirus outbreak, while one-third think marketers should only advertise if they’ve taken direct action to address the situation.

Employees overwhelmingly (81%) think the coronavirus pandemic will force companies to act more responsibly in the long term, compared to the average American (70%).

Given these sentiments, communicators have a better idea of the role that social responsibility and purpose-driven marketing can play in building their brand communities while ensuring their long-term viability.

At the core of that role is taking a stand. Ethan Karp, CEO of Manufacturing and Advocacy Growth Network, called it a moment of truth for corporate America. “It’s a time for companies to show that they don’t just sell something or make something—they stand for something. That they care deeply about helping workers, customers, and communities,” he said. “Living your values is not only the right thing to do; it’s good for business.”

LIVE YOUR VALUES WHILE YOU DEFEND YOUR BRAND

In the long run, companies that live by their values will likely weather these unprecedented times best, preserving and strengthening trust and loyalty among customers.

Of course, not every brand stands ready and willing to embrace social justice activism. Not every brand is able to offer material solutions in response to the pandemic. But every brand needs to be able to respond to the potential backlash on their owned social media pages in reaction to doing the right thing—or doing nothing.

Being vigilant to that response is as important as being consistent in your actions when you decide to tie marketing to your brand purpose. The unfortunate truth is that there are trolls, harassers, activists, and other sophisticated bad actors out there who are waiting to pounce on what they see as a vulnerability.

“Technology needs to combine with good old-fashioned wisdom and judgment to help companies navigate a climate of social disruption and anticipate social media crises,” said Tobaccowala. “There are unique challenges facing companies today, and ways in which smart communicators can harness technology to help them manage in that environment.”

With an early-warning risk intelligence solution, you can lay the groundwork for a successful values-based marketing campaign by getting the lay of the land. When you have the ability to anticipate disruptive, atypical risks with 24/7/365 monitoring of digital chatter aimed at your brand, you can launch and execute a purpose-driven initiative with confidence.

“You want to identify issues when the spark turns into a flame,” said Tobaccowala. “Not when the flame turns into a fire.”

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