It’s increasingly common for employees and consumers alike to have high expectations of companies in terms of their social and environmental behavior. A recent study from Kellogg explores whether consumer boycotts actually hurt companies enough to trigger change.
The researchers explain that things are seldom as simple as one group choosing to stop buying from a particular company, as it’s equally possible that an opposing group may increase their support to counter this initial move, in action referred to as a “buycott”.
A mixed response
Indeed, the researchers found that the buycott can actually exceed that of any boycott, albeit only in the short term. It’s a counter-intuitive finding, not least because the attention given to boycotts far outweighs that for those increasing their support.
The findings emerged after an analysis of a situation involving Latin food company Goya, after their CEO praised Donald Trump during a meeting at the White House. This sparked calls for a boycott of the firm from opponents of Trump, but equally, pro-Trump supporters increased their support.
At the time of the affair, there were over 1,500 stories in the media, with nearly all discussing the boycott. Indeed, just 18 mentioned the counter-movement to increase support for the company. Despite this, the company recorded an increase in sales of around 1,000%, with nearly 17% of buyers in the fortnight after the CEO’s comments first-time buyers, suggesting a direct response to the issue. As a result, the researchers found that sales rose by 22% during that period, before falling away again in week three.
Polarized society
The phenomenon is a reflection of the polarization of American society, with the brand preferences of consumers reflecting their political choices. This divide only deepened after the election of Trump.
Nonetheless, the researchers found that the actions of the Goya CEO were extremely strange, as the brand’s core audience is largely Democrat, so to pledge allegiance to Trump goes against their main customer base. It was only loyalty to the brand that ensured consumers stuck around as much as they did.
What’s more, the researchers explain that a relatively low number of American households were existing customers of the brand, so could not engage in a boycott. By contrast, anyone could engage in the buycott, especially as there were relatively few costs associated with this form of counter-protest as switching brands back again after the protest was so straightforward. The researchers believe that it would be far less likely for higher-ticket items.
Suffice it to say, the case of Goya has much to suggest it might be unique. For instance, it’s a family-owned business that is not listed on the stock market, so the CEO does not face pressure from shareholders or even a board of directors.
Nonetheless, the researchers believe the stark difference between the political views of the customer base and that of the CEO, and the fact that this didn’t result in a poor business outcome is significant. While this shouldn’t be taken to mean that leaders should take heart from these findings and say what they want without fear of any consequences, there is perhaps a level of calm they can take away from them nonetheless.
