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Business and Politics: A Good Combination?

— June 12, 2020

Politics is complicated. One wrong step can make your business go haywire. It is better if you could sideline contentious issues that can spark a false notion among your customers.

Initially, proper business etiquette indicated that one should avoid discussing politics at all costs. One wrong political stance could cost you several valuable customers. Politics is tribal and emotional. Business, on the contrary, is factual and logical. Emotions can disrupt the best decision making processes that are mostly based on facts and reasoning. Papa John’s International Inc., for example, ended its relationship with the NFL because some players kneeled during the national anthem. 

Avoiding politics, however, has become quite a challenge for businesses lately. From favourable regulations to accessing resources, politics and business intertwine in various aspects. If done correctly, politics can reap financial benefits for a firm. Vanity Fair, for instance, called out one of Mr Trump’s restaurants. This forced the president to tweet a disparaging remark about the magazine. The remark caused a backlash, and the magazine won a record number of subscriptions within 24 hours. 

So, how can someone get through this minefield of business and politics? It’s all about ‘when’ and ‘how’ you mix business and politics. Let’s find out. 

When & How Should Business and Politics Be Mixed?

According to research, 78% of consumers want companies to take a political stand on social media. But, make sure the expectations of your target audience align perfectly with your political stand. It is even better if you take a stand if the topic relates to your consumers and the core values of your stakeholders. Here are some instances when the mixture of business and politics could bring benefits to the firm. 

  1. Donations and favourable industry regulations 

Business firms have the democratic right to support the political group they believe in. Most businesses often tend to support a political party that is more capitalistic. The support is usually in the form of donations. Donations lead to three major impacts:

  • Benefits both the legal and political entities since the businesses have the right to donate and the political parties thrive on these donations. 
  • Businesses drive a capitalistic country’s GDP. Here, government policies regulate the industries. Owing to the donations, businesses will be able to bring policies and regulations in their favour. 
  • The favourable industry regulations can help in the development of small, micro and medium enterprises. The collaboration could increase the chances of employability, thereby filling the skill gap present in the country.

While donating money, businesses must make sure that their target audience isn’t offended by the decision. Chick-fil-A, for example, noticed a sharp decrease in sales and an increase in protests when it was revealed that they donated some money to the anti-LGBTQ groups as well. 

  1. Stronger bonds with customers 

There isn’t any political view that EVERYBODY agrees with. While you may lose some people who don’t share your opinions, there are higher chances that you may develop a dedicated client base who agrees with your stand. Starbucks, for example, has always taken action on certain social issues. When President Trump announced banning all refugees from entering the US in January, Starbucks decided to hire 10,000 refugees in the next five years. This decision attracted new and retained existing employees from all over the world. 

Some more related examples: 

  • As mentioned earlier, protests erupted against Chick-fil-A after it was found out that some of its recipients of donations were anti-LGBTQ groups. So in 2015, the company opened its first branch in New York to modest the protests. Now there are 2100+ restaurants across the country. The brand has even surpassed KFC as the nation’s largest fast-food chain for fried chicken products. 
  • In 2018, Alessandro Michele, the creative director of Gucci, announced his support for the March For Our Lives rally. He also donated $500,000 to them. The outcome? Gucci kickstarted 2018 with an incredible 49% in sales growth. 
  • Nike made a bold political statement through an ad titled ‘Dream Crazy.’ The ad featured Colin Kaepernick, a former NFL quarterback. He became famous for protesting against racial injustice and police brutality by kneeling before the NFL games during the national anthem. Besides the $6 billion increase in the brand value, this ad also won an Emmy for this brand. 

Whether you want to take a stand on liberal views or conservative views, consider your decision’s impact. You cannot let your emotions govern your decision-making skills. Think thrice before you pick a sensitive issue to advertise. You may end up hurting people’s sentiments.

Election 2020 graphic
Election 2020 graphic; image courtesy of conolan via Pixabay,
  1. More authentic appearance

Your involvement with the right political group can make your appearance more authentic to the public. Your political statements can establish you as a better leader in your industry as compared to your competitors. It is better if you associate your business with a solid cause as that can boost brand loyalty. It’s not only your client base that will increase but so will your business opportunities. 

Here’s how the experts did it:

  • Recently, Apple got into a feud with the FBI over unlocking the iPhone. Though it seemed more of a legal issue, Apple was aware that it could take a political turn as well. Speaking of iPhones, Apple knew that the Chinese market was very important to them. Thus, a good relationship with the Chinese government was essential. Apple conveyed the political message that they would not allow the US government to crack into iPhones. Outcome? Apple was yet again under the limelight, followed by other companies.
  • Patagonia established itself as one of the best outdoor clothing and gear industries after suing Donald Trump for eliminating two million acres of public land in Nevada and Utah. The company’s activism and donations have not gone unnoticed either. It has recorded the highest loyalty percentage among other brands in the same industry. 

These two renowned brands have shown us how the right political stand can improve your position in the market. In both cases, the brands took a stand that they and their customers really believed in. So, make sure your target audience agrees with your statement before you mix politics with your business. 

What are the reasons to avoid mixing politics and business?

Mixing politics in business is not as easy as dissertation writing All it takes is a wrong political integration to rip your business apart. Remember, politics isn’t a light subject. It is personal and can drive action, often adverse. Here are some common reasons to avoid mixing politics and business. 

  1. Boycott of your business 

57% of customers may boycott your brand if they disagree with your political statements. You lose both new as well as existing customers. Angry Twitter users protested against The National Rifle Association after the school shooting in Parkland, Florida. Many brands like Enterprise, National Car Rental, United Airlines and Delta severed their ties with the NRA. 

  1. Alienate customers 

Harold Leeson, the CEO of Natural Foods, provided donations to the Minnesota Republican Party, which had taken a strong stance against gay marriage. People started equating the party’s beliefs with Natural Foods, and that caused a drop in their sales to a great extent. 

  1. Disrupts your business 

Almost two-thirds of people say they would like to continue shopping with businesses that stay silent about social issues. The wrong political stand can disrupt your business right away. From your social media reputation to the existing client base, you may end up losing pretty much everything.

It’s stressful when you have to figure out a political statement to connect with your business. If done right, your political beliefs can reap you financial benefits. If done wrong, it can make things worse for your business. 

Wrapping Up, 

Politics is complicated. One wrong step can make your business go haywire. It is better if you could sideline contentious issues that can spark a false notion among your customers. Business is hard enough. Technology and outsourcing have already started threatening the client-business relationships. Political disruptions can end your business. So, take a step or make a statement only if you are aware of its consequences in your business. 

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