Politically Charged: How Taking a Political Stance Affects Consumers’ Valuations
In recent years, a number of restaurants and big businesses have expressed their opinions and beliefs on pertinent political and social issues. For instance, many businesses have made public announcements revealing their support for or condemnation of specific hot-button topics such as same-sex marriage, gun control, universal health care, immigration reform, and more. While these sorts of partisan assertions by businesses often yield mixed reactions by news and social media outlets, there is much speculation as to how it affects consumers’ behavior.
Namely, do certain types of consumers differ from others in their reactions to businesses taking a political stance? Further, how does a consumers’ personal beliefs regarding the issue at hand moderate their reactions to the political stance? Anne Wilson and Chris Hydock, researchers at the Georgetown Institute for Consumer Research, conducted a study to find the answers.
To start, the researchers asked consumers to identify and describe a restaurant that they were either Extremely Loyal (EL) to or one that they Frequently Visited (FV). Consumers indicated how often they patronize it, what type of restaurant it is (i.e. diner, bar, sit-down, fast food, etc.), their typical check price, and their favorite item on the menu.
The researchers then presented consumers with one of five scenarios in which their restaurant of choice declared that it “donates a percentage of its profits to a non-profit organization.” In four of the scenarios, the restaurant donated to highly partisan political organizations. The organizations were described as: supporting increased military spending and gun rights, supporting decreased military spending and gun control, supporting universal health care and reproductive rights, or opposing universal health care and reproductive rights. In the last scenario, the restaurant simply declared that it donated to a respected charitable organization.
After reading the scenario, consumers rated the restaurant on a number of aspects, including: quality of food, customer service, and menu. Consumers also rated their subsequent attitudes toward the restaurant, i.e., “Considering the stance that [fill in the blank] took how likely are you to continue eating at / recommending [fill in the blank]?”
What happens when a business takes a political stance? The answer to this question depends. The data show that when a business takes a political stance there was a small increase in attitudes toward the business among consumers that agreed with the stance. However, there was a much greater decrease in attitudes towards the business, among consumers that did not agree with the stance. Accordingly, any political claim appears to negatively affect the overall average of consumers’ attitudes.
Fortunately, there is an optimal solution. Namely, all consumers rated restaurants favorably when they were presented with a scenario in which the restaurant simply stated they donated a small percentage of their profits to charity. This was evident in their overall attitude toward the restaurant, their likelihood of returning, and their likelihood to recommend the restaurant. Specifically, the ratings elicited by announcing a charitable donation were equivalent to those elicited by announcing a political stance that was congruent with a consumer’s. Importantly, charitable donations elicited positive ratings with all consumers, while any given political stance elicited positive ratings with only half of consumers.
IMPLICATIONS & CONCLUSIONS
The results suggest that taking a political stance is unlikely to be beneficial. If a business is compelled to state something, expressing a neutral position, or announcing support for charitable organizations, may be the best course of action. This finding held regardless of whether the political issue was healthcare, reproduction rights, gun control, or military spending. Further, even if a business’s consumer base is homogenous and it is able take a political stance that the overwhelming majority supports, the data suggest promoting charitable giving can achieve the desired results without increasing risk. Thus, while there has been a recent trend among businesses and corporations to openly support specific social movements and political issues, it may be most beneficial to act Swiss and remain neutral.
What does loyalty mean?
Extremely Loyal consumers gave significantly higher ratings for quality and overall attitude than Frequent Visiting consumers. Additionally, while both types of consumers reported patronizing their respective establishments with equal levels of frequency, Extremely Loyal consumers reported spending more per visit, regardless of the type of restaurant. Although Extremely Loyal consumers can still be put off by “incongruent” political stances, they are also still more likely than Frequent Visiting consumers to continue frequenting and recommending their restaurant to others after it takes a political stance. These differential results suggest a complex relationship between consumers and brands that yields further inquiry.