Modern consumers are watching brands more closely than ever and organizations are being asked to consider and act on calls for corporate social justice. Companies that choose to elevate their voice on these tougher issues must do so thoughtfully, and CMOs are at the center.
We caught up with Augie Ray, VP Analyst in the Gartner for Marketing Leaders practice, to learn the role that marketing leaders have to play in corporate social justice initiatives and key considerations they must keep in mind.
Members of the media who would like to speak with a Gartner expert regarding this topic can contact Katie.Costello@Gartner.com to schedule an interview.
Q: How do corporate social justice activities impact purchases and customer loyalty?
A: Many marketers believe they can attract new customers by differentiating their brand on these highly visible and sensitive social justice issues, but Gartner research finds most consumers won’t act and the net positive for brands is minimal. Here are a few key findings.
Although consumers express strong opinions on the need for brands to engage on these issues, their political and social opinions don’t necessarily drive their purchase decisions. For example, almost two-thirds (64%) of 3,014 U.S. consumers surveyed by Gartner in October 2021 said they didn’t make purchase decisions based on their political or social beliefs. That leaves 36% whose views did drive purchase decisions, but consumers are not focusing as much as many think on where brands stand when making a purchase. These decisions may come under even further pressure as inflationary pressures rise and supply chain issues continue, leading consumers to reconsider their choices altogether.
Simply put, consumers don’t have enough time, desire, or brainpower to parse the social justice words and actions of the hundreds of brands they buy from or may consider. However, that does not mean consumers aren’t paying attention to the alignment between brands' words and actions.
When we discuss social justice, there is no commonly understood definition of corporate social justice. In Gartner’s view, it encompasses the organizational values, attitudes and behaviors that contribute to the fair, equitable treatment of all stakeholders within and outside the organization.
Q: Understanding customer purchase decisions and loyalty may not be at stake at significant scale, are there any other risks for brands that take public stands on social and political issues?
A: To consumers, the question is whether a brand’s position on contentious issues represents an affirmation of its identity or merely an attempt to improve its image. They can perceive a brand’s words or actions in one of two ways:
- Intrinsic: When a brand’s statements and actions related to social stands are perceived as genuine, moral, motivated by commitment to society and part of the company’s identity.
- Extrinsic: When a brand’s statements and actions related to social stands are seen as protecting the brand, appeasing social pressure, motivated by risk mitigation or profit and mostly part of the company’s image.
Brands perceived as having extrinsic motivations suffer in the eyes of consumers and assume the following risks:
- Increased risks of boycotts: Any corporate social justice stance can create backlash from those who do not agree with the brand.
- Increased risk of employee action: When employees perceive companies as motivated by a desire to polish their image, they can revolt (e.g., employee-staged walkouts or other forms of public criticism).
- Reduced perception of price fairness: When consumers perceive brands’ corporate social responsibility efforts as extrinsic, it can decrease perception of price fairness. Consumers may feel the brand is raising prices and spending that cash in ways that make the company look good.
Tackle these risks by helping peers and employees understand how gaps between words and actions can hurt brand perception and preference. The CMO’s first job on social justice topics is not to raise the brand’s voice but to minimize brand risk.
Q: How can CMOs who are thinking about entering the corporate social justice conversation get started?
A: Brands that choose to enter the conversation need to ensure their efforts are authentic and audience-centric – in other words, driven by a genuine concern that is tied to corporate identity and not just brand image. This starts with the CMO clearly defining or recognizing where the company stands on a given issue(s), so they can protect their brand and guide employees’ actions accordingly.
CMOs should partner with other C-suite leaders to define the organization’s commitment, internal strategy and roles, and accountability on social justice issues. Answer questions such as, “What do we stand for, why does this matter to our organization, and how much risk are we willing to take?”
From here, do some research on what customers value and expect to ensure any social justice actions are customer-centric, not solely brand-centric. Take the time to understand customer expectations on these polarizing topics in order to create an informed plan of engagement both inside and outside the organization.
Brands that bring social justice issues into their brand identity can improve their appeal to some prospects and customers while risking the alienation of others. Many succeed by remaining culturalists that act on social justice topics without bringing them into their brand identity, versus activist brands that are closely tied to political or social issues.
To learn more on this subject, tune into the upcoming Gartner complimentary webinar, “Do Corporate Social Justice Initiatives Drive Customer Acquisition?”
Gartner clients can read more in:
- Do the Right Thing: Social Justice Is a Corporate Strategy, Not a Marketing Strategy
- Driving Action With Social Justice Initiatives: What Brands Do to Encourage Buycotts and Boycotts
- How Consumer Expectations for Social Justice Create Risks for Brands
- Boycott or Buycott: How Corporate Social Justice Activities Impact Purchases and Customer Loyalty
If you are a member of the media who would like to speak further on these topics with a Gartner expert, please contact Katie Costello at Katie.Costello@Gartner.com. Members of the media can reference this material in their articles with proper attribution to Gartner.