Can Essential Brands Withstand Bad PR?

 

It seems like almost every week, a major brand is in the news for a public blowup. Whether it’s the off-color comments of their CEO, a viral video of customer injustice or reports of the company’s food causing serious illness, a cycle has been formed.

There’s an incident, news about the incident, public finger-wagging and threats of protests, projections about the doom of the company, thinkpieces after thinkpieces (Medium must salivate after a company does something dumb)… and then, nothing. A month later, another incident happens and we’re right back to where we started.

Companies such as Uber, United Airlines and Chipotle have made waves in recent months for various well-publicized scandals.

The battle between Uber and Lyft has been the most public example of bad PR at work. As more rideshare riders realize how Uber treats employees and drivers, they start to second-guess their decisions.

Lyft has capitalized on this, as the dominant Uber market share is starting to shrink. USA Today reported recently that Uber once held 90 percent of the ride-hailing market share, but over the past two years, that has slipped to 75 percent. Meanwhile, Lyft has gone from 21.2 percent up to 24.7 percent.

This goes to show that bad PR goes simply beyond harming the bottom line. It opens the door to competitors. It forces consumers to make a choice. Sure, Uber might be the cheapest way to get from point A to B, but is it something you’d want to contribute to? While Lyft has been the biggest benefactor of this, a host of other on-demand apps have risen to give Uber-hesitant consumers a more conscientious choice.

However, in the cases of United and Chipotle, they often have a dominating share of consumer choice. Unless you live in a major metropolitan area, your choices of airline might be slim. Likewise, for more rural and suburban areas, Chipotle is your best or only option at Mexican food that doesn’t come from a drive-thru.

You might think that in the case of these major companies, they’re able to weather the storm because they’re often the only game in town. That can change, though. Smart brands can disrupt these areas. Lyft can offer incentives to new drivers, undercutting Uber strongholds. Mid-range and mom-and-pop restaurants can establish footholds where Chipotle is the only place for a fresh burrito. Budget-friendly airlines such as Southwest could open a few more routes in underserved cities.

There is a definite long-term effect to bad PR on even the most infallible of brands. Hearing about unspeakable acts committed by high-profile executives or extreme injustices captured on video would make even the most fiscally conservative consumer pause. That hesitation, if scaled, can be a nightmare for brands.

Millennials, a growing force in spending power, want to make sure their dollar goes somewhere worthwhile. This is where the Uber vs. Lyft and United vs. Southwest decisions really matter. Consumers want to feel good about their spending.

Toxic PR may not always be enough to shutter a company in a day, but it definitely weighs on the decisions that consumers make day in and day out.

By Justin L.

As Brands Try to Sell “Woke,” Customers Wise Up

As social and political resistance movements make daily headlines, is there room for a brand in that conversation? A few companies have tried to make social awareness a focal point of ads or messaging, but have come off doing more damage than good.

Today’s consumers actually prize social responsibility — but not as a selling point. Sadly, some companies haven’t learned that lesson.

Recently, Pepsi and Lyft have tried to position themselves as socially-aware brands, but the pitches have backfired. Pepsi used Kendall Jenner as the catalyst of a fake resistance rally, calming tensions between the people and the police by delivering a Pepsi to an officer. Lyft has been trying to distance itself from its tumultuous competitor Uber, as cofounder John Zimmer called his company “woke.”

Pepsi quickly pulled its ad, but not before a wave of outrage from social media, and the ensuing mocking memes. The commercial was incredibly tone-deaf, making light of tense conflicts with the police. Lyft’s Zimmer saw his comments laughed off, as consumers pointed out that they don’t treat drivers much better than Uber. Customers are able to see right through these types of efforts.

By trying to look socially responsible, these companies have actually hurt themselves and barged into a conversation not meant for them.

Consumers don’t want social responsibility to be part of an ad campaign. They want to buy from companies that actively practice it — and not just in front of a camera.

Instead of showcasing your “wokeness” in an ad or staging a fake resistance rally just for product placement, brands can actually gain superfans by enacting more responsible practices.

A study by Nielsen shows that consumers will respond to true, authentic awareness with their wallets. In that survey, 66 percent of those polled said they’d be willing to spend more on products that come from companies committed to a positive social and environmental impact.

Here are a few ways brands can practice social responsibility (and not come under fire on Twitter):

Make it part of your mission

One of the key tenets of companies such as Salesforce, Patagonia and Adobe is charitable efforts. They encourage their employees to donate to charity and spend hours during volunteer work, often giving them a reward for doing so. This is a common and very effective way to practice corporate social responsibility without contacting an ad agency.

Highlight charitable practices

TOMS Shoes has become a popular brand, especially among Millennials, for their One for One program. For each pair of shoes purchased, TOMS donates a pair to someone in need of footwear. Brands big and small can find a way to tie sales to charitable giving, positioning themselves as the socially conscious choice through action, not advertising. TOMS’ philanthropic business model has become so industry-leading that other brands such as Warby Parker have emulated their One for One program.

Green up the office

The most basic way to become a socially responsible brand is to bring environmentally conscious practices in house. Whether it’s doing what you can to become a paperless office or ensuring that employees all through the supply chain are paid and treated fairly, find out how you can improve within your walls by looking into programs such as becoming a certified B Corporation.

Champion a cause close to consumers’ hearts

As you learn more about your customer base, you’ll find that they have causes near and dear to their hearts. For local brands, it could be cleaning up a local lake. For bigger brands (such as Target), it’s helping schools. When you use your name, money and workforce to be a champion of this cause, it will only strengthen the bond between your company and your customers.
It won’t be cheap or easy, but truly taking the steps toward corporate social responsibility will be worth it. Today’s consumers prefer to spend their money with companies dedicated to making the world (or local area) a better place. They’re savvy enough to see through a glitzy ad campaign, knowing which companies truly walk the walk.

By Justin L.