6 Brands Playing Footsie with Conservatives and Paying the Price
Chick-fil-A might have gotten a nice, one-day sales boost with "Chick-fil-A Appreciation Day," but tying a national brand to aging white bigots is not a winning strategy – and the numbers prove it. Executives. directors and managers of American corporations take note: If your company is playing footsie with right-wing ideologues it can harm your company and your career. People are seriously fed up with companies that support and fund these right wingers, and brand-equity tracking surveys prove it. Here are 6 examples of companies and organizations that have flushed their brands down the right-wing toilet.
1. Chick-fil-A Brand Damage
Last month Chick-fil-A’s CEO made public statements insulting and condemning America’s lesbian, gay, bisexual and transgender (LGBT) citizens and their right to marry. For obvious reasons this provoked a national, negative reaction. Conservatives tried to salvage the situation this week by putting on a big show of support with their "Chick-fil-A Appreciation Day," trying to make it appear as if it is good for a company to line itself up with far-right groups. These right wingers might be celebrating what seems to be a good day for a chicken sandwich chain, but common sense -- and the numbers -- clearly say something different.
Chick-fil-A is engaged in a PR effort to lead people to think that conservative support is helping the company, but according to YouGov's BrandIndex the company's "brand health" has dropped to its lowest levels in years. In their release,Chick-Fil-A takes a hit with fast food eaters, BrandIndex explains,
Chick-Fil-A's perception with fast food eaters nationwide has taken a significant hit in most regions of the US ... since president and COO Dan Cathy's perceived anti-gay remarks on July 16th.
... On July 16th, the day the Baptist Press published its Dan Cathy interview, Chick-Fil-A's Index score was 65, a very substantial 19 points above the Top National QSR Sector average score that day of 46. Four days later, Chick-Fil-A had fallen to 47 score... This past Wednesday, Chick-Fil-A had a 39 score...
This makes sense, considering that polling shows that the very demographic groups a company like Chick-fil-A wants to attract overwhelmingly support the right of gay and lesbian Americans to marry. According to recent Pew polling, for example the prized 18-29 demographic (they buy stuff) favors gay marriage by 65 percent to 30 percent.
But Chick-fil-A is doing great with the aging, white bigot crowd (they don’t buy stuff)! Opposition to gay marriage gets great numbers among the 65+ crowd (31% favor, 56% oppose) and conservative Republicans (75% favor, 16% oppose) but almost every other demographic group favors gay marriage, and Chick-fil-A’s position puts them well behind the curve. Is tying themselves to a dying demographic of angry white bigots really a winning long term brand strategy? (Hey, that sounds like a certain political party, too!)
2. Komen for the Cure: The Gold Standard For Brand Damage
Right now it's Chick-fil-A in the news for damaging its brand by playing footsie with the far right. But Chick-fil-A is hardly the first company or organization to self-destruct this way. The Susan G. Komen for the Cure® foundation is the gold standard for right-wing-footsie brand destruction.
Komen for the Cure was the premier charitable brand in the world. People used to give through their noses supporting Komen for the Cure’s Race for the Cure, and buying pink-ribbon Komen-branded wristbands, clothing, gifts and other merchandise. Then, in a move to please the conservative right, the Susan G. Komen for the Cure foundation pulled funding from Planned Parenthood. The result was that according to a Harris Poll EquiTrend® Study, Komen’s "brand equity" dropped 21 percent, one of the most dramatic plummets in brand-equity ever.
How far a drop was this? The study said Komen moved "from 'Gold Standard' to 'Trailing the Pack.'" Last year Komen was ranked among the top two brands they follow. This year it ranked No. 56. Top two to 56th – that's a drop of 54 spots! The value of the Komen brand is ruined. And brand destruction like this sticks; Komen is still having problems. A recent Race for the Cure on DC’s National Mall drew only 25,000 participants, down 37.5% from a year ago.
By the way, the Komen executives behind the Planned Parenthood decision were forced out. Along with the company, people’s careers were damaged after Komen’s move to the right. In, Julie Teer, Susan G. Komen VP Of Development And Romney's Former Finance Director, Resigns, Huffington Post explains the extent of the damage done to people’s careers,
Turnover at Susan G. Komen for the Cure continues five months after the flap over Planned Parenthood funding, with the national office’s top fundraiser leaving the organization this week.
Vice President of Development Julie Teer will leave on Friday after four years at Komen ... She becomes at least the fifth executive to leave Komen’s Dallas, Texas headquarters since February’s debacle regarding funding to Planned Parenthood, in addition to at least half a dozen departures at affiliates around the nation.
You get the picture. Don't let this be you next.
3. TED vs the 99%
TED stands for “Technology, Entertainment, Design,” and the organization puts on conferences in the US and UK. TED is well-known for its “TED Talks,” videos of TED conference speakers discussing various interesting and important topics.
In May, wealthy venture capitalist Nick Hanaour gave a TED Talk on income inequality. TED decided the subject was too "political" to release to their video audience, and said “business managers and entrepreneurs would feel insulted.”
National Journal broke the story, in Too Hot for TED: Income Inequality, reporting, "There’s one idea, though, that TED’s organizers recently decided was too controversial to spread: the notion that widening income inequality is a bad thing for America, and that as a result, the rich should pay more in taxes."
Some examples of the reaction this evoked include Salon, TED: Even more elitist than we thought and Mother Jones,The Charts TED Doesn't Want to Share.
The story also spread through social media and, finally, into the major media. Company directors and executives don't want to see stories like this one in Time, Was Nick Hanauer’s TED Talk on Income Inequality Too Rich for Rich People?
Their slogan is “ideas worth spreading.” But the folks at TED – the Technology Entertainment and Design nonprofit behind the TED Talks, beloved by geeks and others interested in novel new ideas – evidently think that some ideas are better left unspread. At least when the ideas in question challenge the conventional wisdom that rich enterpreneurs are the number one job creators.
There is no scientific measurement of the brand damage done to TED, but clearly the organization's brand is now damaged -- at least in the minds of 99% of us.
4. TD Ameritrade
In May news reports came out that TD Ameritrade's founder Joe Ricketts was funding an anti-Obama Super PAC. This hurt the company's brand image, even though Rickets is no longer with Ameritrade.
ABC News summed it up, in Joe Ricketts Drags TD Ameritrade Into the Political World. Much to the Company’s Chagrin:
Kim Hillyer, director of communications and public affairs for TD Ameritrade, did not mince words about the pickle in which her company now finds itself, thanks to the founder and former CEO of the company Joe Ricketts. “It’s certainly a difficult situation,” said Hillyer, referring to the calls from clients and members of the public ... about Ricketts’ interest in launching a Super PAC to attack President Obama.
Later, the Huffington Post reported that that the company had indeed lost customers.
5. Rush Limbaugh and Snapple
Early this year Sandra Fluke testified to a panel of Democratic House members following a male-only Republican hearing on birth control. She testified that the "Obamacare" health insurance mandate to cover birth control is important to the health of women. She told of a friend who, as a student, needed treatment for polycystic ovary syndrome, which is treated using contraceptive hormones costing over $100 per month. Some insurance companies deny coverage for contraception, which is a financial hardship for many women.
Rush Limbaugh once again shocked the sensibilities of much of the public, declaring Fluke to be a "slut" because she used birth control. The public had had enough of this, and turned on Limbaugh's advertisers. Again, social media enabled people to take action.
Companies, seeing the damage that was occurring, began to flee. Look at the reports of the numbers of companies that stopped advertising in reaction to social media-generated pressure: March 6, Hollywood Reporter, Rush Limbaugh Sponsor Exodus Hits 43 as Sandra Fluke Fallout Continues, March 10, Think Progress, BREAKING: 98 Major Advertisers Dump Rush Limbaugh, Other Right-Wing Hosts, March 12, Think Progress again, EXCLUSIVE: 140 Companies Drop Advertising From Rush Limbaugh [Update: 142].
But these are not the first advertisers whose brands were hurt by their association with Limbaugh. Snapple-brand iced tea has never recovered from public reaction to the company being a major sponsor of Rush Limbaugh in the early 1990s. To this day people believe rumors about Snapple being associated with the far right, including one that the company is owned by the KKK.
6. McDonald’s, Wendy’s, Intuit, Mars, Kraft Foods, Coca-Cola, PepsiCo, AT&T, GM, Walgreens and Other Companies That Support Or Supported ALEC
The American Legislative Exchange Council (ALEC) is a secretive, far-right organization the pushes stealth laws supporting right-wing and large-corporate interests through state legislatures. The organization is supported by right-wing, “conservative movement” funders and corporations seeking tax breaks and other legislation that gives them an edge over their competitors. These companies thought ALEC could stay under the radar and their donations would be hidden from the public. But the organization's right-wing agenda enraged the public and led to increased scrutiny, which led a number of companies to be very publicly embarrassed.
ALEC was first exposed when the Center for Media and Democracy (CMD) and The Nation obtained documents showing the extent of the organization's activities. The Nation's article ALEC Exposed, and CMD's ALEC Exposed website tell the story.
Then, the Trayvon Martin shooting case exposed how ALEC helped push through Florida's dangerous "shoot first" law in Florida, and people became fed up. Now people are learning that ALEC is also getting state laws passed that limit the voting rights of minorities, limit the power of working people to negotiate for better wages and limit the power of citizens to fight for cleaner environment.
The NY Times, listed a number of companies by name and tied their names to the right-wing agenda in an editorial, Embarrassed by Bad Laws, which brought public pressure on corporations supporting ALEC,
The council, known as ALEC, has since become better known, with news organizations alerting the public to the damage it has caused: voter ID laws that marginalize minorities and the elderly, antiunion bills that hurt the middle class and the dismantling of protective environmental regulations.
... In recent weeks, McDonald’s, Wendy’s, Intuit, Mars, Kraft Foods, Coca-Cola and PepsiCo have stopped supporting the group, responding to pressure from activists and consumers who have formed a grass-roots counterweight to corporate treasuries.
Once again companies seriously harmed their public image -- their brand equity -- by playing footsie with the right.
Hiding Doesn't Help
Some companies understand the potential for damage to their brand, so they try to hide their support for the right. But as the ALEC exposure demonstrated, this just increases the potential to further incite public rage. One area where companies are trying to mask their right-wing support is through the use of organizations like Karl Rove's Crossroads GPS, which runs ads supporting Republican candidates. Crossroads GPS tries to mask its election agenda by calling itself an "advocacy group," claiming they only run ads to advance social welfare. This allows them to keep their donors secret. The same is true of the US Chamber of Commerce, which spends tens, even hundreds of millions on campaign advertisements for Republicans. But in reality both are just fronts for the Republican party.
Corporations supporting organizations like Crossroads GPS and the US Chamber of Commerce do so expecting that their funding of the right will remain anonymous. But sometimes the law does catch up, and these companies also risk damaging their brand equity when a fed-up public finds out. And this may well be just about to happen. As Business Week reported in, FEC Orders Names of Donors Fueling Issue Ads Be Disclosed, "The Federal Election Commission today said that it would require groups funding issue ads, such as the U.S. Chamber of Commerce and Crossroads GPS, to disclose their donors."
Citizens Don't Like Corporations Interfering With Democracy
Is your company supporting a right-wing organization that promises to keep your identity secret while helping you get special tax breaks and government “privatization” contracts, break unions, keep wages down or gain a legislative edge over competitors? If you think this benefits you in the long run, you had best think again. This is the lesson: if you direct or manage a corporation you should not risk your brand by siding against the 99% of the population that is becoming angrier and angrier at corporate interference in our democracy. If you work at a company doing this, use your best efforts to make them aware of the potential for damage –your job could be saved if you stop them before they are exposed.
Supporting the right in an attempt to purchase shortcuts to profits will also damage your company culture. The Huffington Post reported, in Corporate Political Donations Linked To Lower Stock Value: Study, that "Corporations might want to reconsider throwing large sums of money at Washington," because there is a correlation with poor company performance:
Rajesh K. Aggarwal and Tracy Wang from the University of Minnesota and Felix Meschke from the University of Kansas examined corporate donations given to political candidates for federal offices from 1991 to 2004 and found that for every additional $10,000 a firm contributed, its stock market price dropped 7.4 basis points below expectation. Corporations that donated large sums of money were also linked to poor governance and agency problems, the study found. [emphasis added, to emphasize]
Here Is What To Do
It isn't hard to protect yourself from angry public reactions that can lead to the brand damage that Chick-fil-A and Komen for the Cure are suffering. Just be good citizens. As a corporation your mission is supposed to be to serve the public good by providing quality goods and services, supporting your products, providing good jobs that respect the humanity and intelligence of your employees, paying good wages and helping care for the communities that surround and support your business. So limit your greed, provide a good product or service to the public, do what is right, and focus on doing things that help people and the communities where you do business. That is the corporate behavior – the “success” – that the market wants to reward. That might sound old-fashioned in today's cutthroat business climate, but, really, doing the right thing is how you maximize shareholder value in the long term.
It's not hard to do the right thing, and in the long term it pays off for everyone.