Do Politics And Small Businesses Mix?
With the 2016 election heating up many entrepreneurs may begin feeling pressure to voice their political opinions. But could taking a stand on the issues be bad for business?
The nominees are in place, the debates are set, and 24-hour news ratings are soaring. Yes it's almost time for the 2016 presidential election. With this increased interest in politics, several issues come to the forefront and social media and other platforms make it easier for anyone to sound off on them.
With so much of our lives seemingly consumed by today's political landscape, entrepreneurs may be tempted to not only let their voice be heard in their personal arenas but also let it reverberate throughout their business. While some brands have built a strong and loyal following by standing up for their beliefs and incorporating them into their practices others have caused themselves public relations headaches and alienated customers by getting political. So at the end of the day, is it worth injecting politics into your business?
Lessons Learned from National Chains
One of the best ways to help answer this question is to look at some recent incidents where national chains were involved in political controversies. As you will see the results are a very mixed bag. For every "Chick-fil-A Appreciation Day" there's a Starbucks "Race Together" debacle. Here are a handful of recent examples we can learn from.
As the Georgia-based fast food chain spread across the United States — earning fans with their tasty fried foods and friendly customer service along the way — rumors began to spread on social media and other outlets that the company was donating a portion of their profits to some Christian groups that were accused of being anti-gay. However it wasn't until 2012 when CEO Dan T. Cathy (son of founder S. Truett Cathy) spoke out against same-sex marriage that the company really caused a stir.
Soon after making the remarks there were calls to boycott Chick-fil-A as well as mayors and other politicians declaring that the chain was not welcome in their cities. On the other side many First Amendment proponents, conservatives, and Christians embraced Chick-fil-A during the backlash. In fact independent groups (one led by former Arkansas governor and presidential candidate Mike Huckabee) promoted August 1st, 2012 as "Chick-fil-A Appreciation Day," which resulted in many stores experiencing lines around the building and record sales.
In the years since the controversy has calmed down but the chain has still been a site of protest. Events such as "Same Sex Kiss Day" have targeted Chick-fil-A as a place for demonstration. Still, the company continues to expand and perform well throughout the country, even breaking into metro and solidly liberal areas such as Los Angeles and New York. Although the image of Chick-fil-A may be damaged in the eyes of some while being upheld by others, their financial success does not seem to have been adversely affected by their politics.
Starbucks CEO Howard Schultz has always let his liberal leanings be known, which may have irked some conservative patrons along the way but not to any level of widespread boycott. However, while some shareholders have been critical of Schultz for his outspokenness in the past, it wasn't until his infamous "Race Together" idea that the general public started to raise eyebrows.
In March of last year the CEO announced the Race Together Initiative as part of a plan to get America talking about race relations. This plan included having baristas write or place stickers that said "#RaceTogether" on random drink orders in the coffee chain's stores. Criticism — ranging from mockery to ire — seemed to befall the company from all sides and the initiative was scrapped a few weeks later. As short lived as it was the initiative did bring more attention to Schultz's politics.
Towards the end of the year Starbucks introduced their annual red cups for the holiday season. Unlike in years past where these cups featured snowflakes, messages of "Happy Holidays," and other touches to fit the theme, the 2015 version was merely a red hombre cup. Fairly or not, many then began to accuse Schultz of purposely removing any reference to the Christian holiday, leading to a campaign for Starbucks drinkers to tell the barista their name was "Merry Christmas."
Obviously these controversies haven't stopped Starbucks from becoming the largest coffee chain and one of the biggest fast food chains in the world. Still, with a recent slump in sales, one has to wonder if the company would be even bigger had it not alienated some on the right with their politics.
The popular organic grocery chain Whole Foods has been criticized for many things over the years — including high prices, which led to the "Whole Paycheck" moniker — but no one could accuse the brand of being anti-gay… until someone did. Earlier this year the story of a gay pastor in Austin, Texas who allegedly received a cake with an offensive and derogatory word added to the requested inscription, made the rounds on social media after he filed a lawsuit against the company. As soon as the lawsuit was filed the company not only began researching the case but also started to fight back.
At the conclusion of their investigation Whole Foods sent out a press release with an attached video they said discredited the customer's claims and announced that they intended to countersue the accuser. Eventually the pastor came forward to confirm that his original account was not accurate and dropped his lawsuit. In turn Whole Foods dropped their countersuit.
What's interesting in this case is that, because of Whole Foods well-established and known stances on such issues as gay rights, many doubted the claims from the beginning. Humorously one of the most common reactions to the story was "this happened at a Whole Foods? In Austin? No way." In this case the company's willingness to get political in the past helped them withstand what could have been a PR nightmare.
Target's success in their particular retail arena places them in a somewhat political position just because they are the main competitor to one of the most simultaneously loved and hated companies in American history: Walmart. But what puts the big red chain on this list is their recent decision to wade into the political waters and the ensuing controversy that followed.
Earlier this year North Carolina passed a bill that required transgendered individuals to use the restroom designated for the sex on their birth certificate regardless of what sex they identified as. Soon after Target announced their defiance of this law and made it clear that their patrons were welcomed to use whichever restroom they wanted to based on the sex they identified as. Predictably this caused outrage among those in favor of the North Carolina law and similar legislation.
While many groups and individuals have called for a boycott of Target over their stance, others have publicly supported and commended the retailer. With this controversy still fresh, it's hard to say for sure what if any impact the controversy has had on the chain.
The Key is to Know Your Customers
In the stories above, the companies that were the most affected were those that appealed to the widest demographic. These chains are equally mainstays in urban areas and blue states, as much as they are in more rural locations and red states. As a result you run the risk of turning off nearly half of your customers across the country by taking a certain political stance. However that may not be something small business owners need to worry as much about.
The great thing about small businesses is that they can be niche. As a result entrepreneurs are free to start their business with a clear, outspoken mission and let consumers decide if they agree with or reject those principals. This may affect your plans to grow into other markets in the future but could also earn you loyal and engaged fans whom will promote your business to their like-minded friends in your area.
If you already have an established business and are now feeling compelled to speak out on political issues, your choice may be a little harder. After all it's probably unlikely that you talk about politics with many of your customers in order to know where they stand. Additionally, although looking at demographics and election results for your area might help give you a clue as to what the political consensus is, no community is in 100% agreement on any one issue and stereotyping can be dangerous. That being said you may still have a decent idea of which way your loyal customers lean, which in turn can help you decide whether it's worth taking a stand or not.
Practicing Politics Without Publicizing
If you do have dreams of expanding and reaching as many different types of people as possible it may be best to keep your political beliefs private but that doesn't mean you can't apply your values to your business. For example you're free to donate a portion of your profits to whatever charity you see fit and even give to political campaigns. Additionally business owners can use their business to prove their economic beliefs and/or demonstrate their morals.
Prior to the controversies of 2012, Chick-fil-A was actually a perfect example of this concept as all of the chain's stores are closed on Sundays. Signs in front of each location insist that this isn't a religious decision but a way to encourage their employees to spend time with their families. Similarly many businesses, both big and small, across the nation who believe in a living wage literally put their money where their mouth is by paying their staff at a premium in order to maintain a happier workforce.
What's great about these types of gestures is that they may inspire those who pick up on them and agree with your stances, while leaving little reason for anyone to oppose. It's hard to criticize an entrepreneur for paying their employees $15 an hour instead of minimum wage and, aside from those really craving a chicken sandwich on a Sunday, you'd be hard pressed to find someone who's offended solely by Chick-fil-A's weekly closure. In that way it may make more sense for small business owners to focus on themselves instead of openly trying to convert others.
So Do Politics and Business Mix?
Truthfully there's really no easy answer to whether getting political helps or hurts small businesses. As a business owner you need to consider the risks and examine potential alternatives. Your decision will partially depend on who your target customers are, what your potential expansion plans may be, and if you can express yourself in ways that are less divisive. The last thing you want to do is make a hasty decision based on political beliefs that could hurt your business's future.