Pride month in its official capacity in North America may be over, but the lessons it can teach about the importance of strategic integration of business objectives, human relations, operations and strategic communications should be adopted the whole year through.
Companies found themselves in hot water this year – often through well-intended public actions that, when push came to shove, failed to effectively tie back to the brand’s corporate values. Instead, we see companies cave under pressure and lose trust from both sides of the social and political aisles. Argyle’s Reputation, Risk and Advisory Practice examined a few of these cases and the key data behind them, to determine how these initiatives could have been executed differently to ensure less risk reputationally.
In the wake of the Bud Light controversy rooted in the company’s April 2023 campaign partnership with a transgender TikTok star, many PR experts and agencies took an immediate stand against the backlash, defending Bud Light’s tactics as table stakes when building trust in today’s business environment. While our team understands the principle of this argument, we disagree that the approach was strategically appropriate in this case.
As many now know, Bud Light’s sales plummeted more than 25% and it is no longer the best-selling beer in the United States. What may be most concerning is that the reputational impact isn’t just from those offended by the company’s partnership with Dylan Mulvaney. Consumers were also vexed by the vague statement from Bud Light’s CEO addressing the backlash. In the first time speaking out since the campaign backlash, Mulvaney took to TikTok to share her thoughts; “For a company to hire a trans person and then not publicly stand by them is worse than not hiring a trans person at all because it gives your customers and others permissions to be as transphobic and hateful as they want.”
Bud Light failed to support Mulvaney individually, as well as the broader transgender community — ultimately upsetting a target audience of the campaign and an indication of a mismatch between corporate strategy and execution. Since the video and subsequent CEO statement, the Human Rights Campaign (HRC) has revoked Bud Light’s “Best Places to Work” distinction.
The impact to the brand has been devastating.
Similarly, retail giant Target added new merchandise for Pride month, including tuck-friendly bathing suits for transgender women. But after public backlash, the retailer quickly removed the product. In response to the flurry of criticism, Target’s CEO Brian Cornell defended the merchandise, saying selling them was “the right thing for society.” But the product was still removed from most stores, sparking additional criticism as supporters questioned whether the company’s commitment was truly authentic.
Target lost more than $10B in market capitalization in the span of 10 days, with shares of stock at their lowest levels in more than three years. Together, the two companies have lost an estimated $28B in market capitalization during Pride month alone.
It’s clear that neither Bud Light nor Target had a sophisticated communications strategy in place when planning for these progressive and inclusive initiatives, as well as campaigns. Their ham-fisted approaches left them unprepared for a crisis they should have seen coming in our politically and socially divisive society. And worst of all, it alienated shareholders and stakeholders alike.
The lesson here is not that companies should abandon their efforts to promote and live their values entirely, nor the greater fight for social change.
Two companies in particular – on competing ends of the political spectrum – execute on their promises seamlessly, leaving consumers with full authority to buy what they are selling. Or not.
Chick-fil-A, widely known for its conservative and Christian values, has consistently and proudly expressed its beliefs throughout its brand identity. Their purpose is clear for all to see: “To glorify God by being a faithful steward of all that is entrusted to us. To have a positive influence on all who come into contact with Chick-fil-A.” Despite facing controversy and boycotts through the years – primarily around which charitable organizations the company gives to— Chick-fil-A has remained steadfast in its position while growing exponentially. Owning their values and staying true to company beliefs have been crucial to continued success, even if it means facing challenges from opposing viewpoints along the way.
Similarly, despite calls for boycotts, the beloved Ben & Jerry’s brand has stood firm in its commitment that their ice cream would no longer be sold in occupied Palestinian territories, citing concerns about violations of human rights and international law which went against their stated values and commitments to social justice.This decision sparked both support and criticism including concerns for economic impacts to Palestinians, double standards for not stopping sales elsewhere, and belief that it was too politically motivated. However, by staying true to their values and remaining clear on their stance, they were able to maintain a strong and loyal customer base.
What’s the difference between Bud Light and Target, and Chick-fil-A and Ben & Jerry’s? Authenticity.
Chick-fil-A and Ben & Jerry’s have an inherent advantage — the positions they take are nothing new to their consumers. It’s who they’ve always been. Many liberals eat at Chick-fil-A and conservatives buy Ben & Jerry’s despite disagreeing with certain aspects of their political views. Why? Because it’s not a surprise. In many cases, it’s also not “in your face” as the central focus of national marketing campaigns. It’s truly authentic. And if these organizations are questioned, they respond quickly with statements and actions that lean into their corporate values. Consumers respect companies who are true to themselves and do not appear to be cashing in on a particular social or political movement.
Bud Light, on the other hand, has generally strayed from seemingly political issues because they were “above” the noise, as a “beer for everyone.” Target is similar in its appeal to families who want reliable clothes and products at a reasonable price point. Ironically, inherent in both approaches is a message of inclusivity. Bud Light is a beer anyone can enjoy on a summer afternoon. Target is a store that people of varying socioeconomic levels can shop at and enjoy. But instead of playing into those strengths to help pursue goals or objectives relating to inclusivity and advocacy, both brands “jumped the shark” with firm positions that forced their customers to take a side on one of the most divisive issues in society today. To make matters worse, their subsequent backtracks jeopardized the support of the very audience they were trying to reach and respect.
Our team at Argyle counsels corporate clients who want to express their values in a way that supports their business goals, whether that means expanding market share, increasing employee engagement, building customer loyalty, or advancing shareholder interests. The reality is, no matter what a national or global survey says is “best practice,” every company is different.
There is not one-size-fits all approach.
That’s why we typically adhere to the following core principles when advising our clients:
Know your corporate values. It seems simple, but executives in marketing departments and executives in finance don’t always share the same priorities. This is especially true considering the left-leaning groupthink that is prevalent in marketing. What are the values that bond your C-Suite, employees, and customers together? Is it truly authentic or is it forced? If it’s diversity and inclusivity — that’s terrific. But the resulting tactics to express that must resonate with all stakeholders in a way that strengthens market share and advances the company’s core goals.
Look in a mirror first. Diversity, equity and inclusivity work starts inside your organization. A corporation and its employees can be genuine allies without the public fanfare. Often more effectively than a business that hangs a rainbow flag June 1 and takes it down June 30. Will your actions be viewed as performative by your employees, their families and those you are saying you stand by?
Know your customers. Again, this may seem simple, but the backlash in the Bud Light and Target example was predictable. Argyle’s proprietary Data Intelligence software does just that: analyzes customer, industry and other data that helps form a successful marketing and communications strategy that still achieves corporate goals (in the case for Target and Bud Light, supporting the transgender community). Here are two examples:
Online audiences were resonating with content that suggested Bud Light is for “manly” men. A TikTok with over 25K likes from May 2022 that continues to circulate today shares two friends singing a song about their preference for Bud Light over seltzers. To the tune of Ice Ice Baby by Vanilla Ice they sing: Don’t be a pansy…. Sh*t ain’t manly…Bud Light, Baby. These lyrics coupled with the high-level engagement shows a broad audience of users expecting Bud Light to be enjoyed by someone who is “manly”. The high engagement should have been a red flag for Bud Light—in their current landscape and based on their audience’s current mindset—a transgender female at the forefront of an online campaign would come as a surprise to these users.
Red states were driving Bud Light related activity. Demographics of those discussing Bud Light before the Mulvaney partnership show Texas City/Texas as the leading region, accounting for more than 10% of activity the 12 months prior. During this time, Texas lawmakers passed bills banning puberty blockers and hormone therapy for transgender kids, restricted college sports teams trans athletes can join, and expanded the definition of sexual conduct in a way that could include drag performances. Users from Florida, a state passing similar types of legislation, accounted for the fourth largest share of Bud Light mentions, approximately 7%. Combined, these two conservative-leaning states drove almost a fifth of the worldwide Bud Light activity in the past year. This should have been another consideration—are they comfortable sparking criticism from a notable portion of their online supporters by partnering at this time, and in this way, with Mulvaney?
Doing nothing is an option. Contrary to many marketing and communications professionals who tend to always recommend action to justify a high retainer, sometimes doing nothing – or doing it with a lighter touch – is the most strategic option. Warren Buffett’s famous quote applies here: “Rule number one is to never lose money. Rule number two is never forget rule number one.” While this is easier said than done in investing, it’s also easily applicable in communications. Always examine the downside before becoming too enchanted with the potential upside. Reputation now accounts for roughly 70% of corporate value. Nothing is more important than protecting it.
While we are always guided by our principles and only partner with clients who share our own values, Argyle does not push our personal political beliefs on our clients. We simply work to understand our clients’ corporate goals and then help achieve those objectives through the most sophisticated data, strategy and tactical execution possible. We believe this is the best approach to objectively protect reputations, foster authenticity, and grow market caps.
Call us if you’d like more information about how our data-driven process can help your team communicate its values successfully.
Authored by Argyle’s Reputation, Risk, and Advisory Practice
For more than 40 years, Argyle has been chosen by the world’s biggest brands, put big ideas onto the public agenda, and grown to become one of North America’s largest and most acclaimed engagement, communication, and reputation advisory firms. Argyle has more than 140 full-time employees in 14 cities in North America, with affiliates in more than 40 countries around the world. Argyle is proud to be a founding agency of Believeco: Partners, a leading North American owner and operator of independent communications and marketing agencies.