Last month, Starbucks trended on Twitter for all the wrong reasons, with many people calling for a boycott of the brand.
The reason? A video that went viral within a matter of hours showing two black men being arrested by police in one of its Philadelphia stores following a call by a Starbucks employee, even though the two men had not done anything provocative.
This is not the first time that the coffee chain has been the target of brand attacks. Its stance on same-sex marriage and commitment to hiring immigrants in response to Donald Trump’s immigration ban earned the respect of those on one side of the fence while provoking fury from those on the other side.
For large-scale consumer brands such as quick-service restaurant chains, brand attacks are nothing new. But the scale and reach that they can potentially have in the age of social media has reached unparalleled heights.
The recent racially-charged incident, for instance, racked up 106,920 mentions of #BoycottStarbucks posted across social platforms like Facebook, Twitter, and Instagram in one weekend alone. Other related hashtags that were also spread by the tens of thousands included #racism, #philadelphia, #starbuckswhileblack, #blacklivesmatter, and #starbucksboycott.
The compounding effect of Facebook, Twitter, and Instagram’s algorithms means that once a trending topic has reached a tipping point, it gets displayed everywhere, to the masses, at lightning speed. Furthermore, brands are at risk of fake news adding fuel to fire when they are caught in a reputational crisis. All of this can lead to brand erosion and negative financial implications.
I boycott Starbucks.....overpriced crap | No thanks, you don't need my money. Your CEO said so | Cheese. Goes. On. The. ******g. EGGS. Not the ******g sausage. #boycottMcDonalds | Respect my President, or I won't buy your swill. #BoycottMcDonalds | No wonder I don't eat #fastfood @Wendys anymore. #StopAnimalCruelty | I will not eat at Subway until you pull your advertising from The Jimmy Kimmel Show #boycottsubway
According to Edelman’s 2017 Earned Brand report, a whopping 57 percent of consumers boycott or buy from a brand based on its position on a political or social issue. More than half of such consumers say they are making belief-driven purchase decisions more than they did three years ago.
And while some of these boycotters may forgive and forget, a far larger percentage (67%) of those who stopped using a brand still do not use it, according to a 2017 YouGov Report: Inside the Mindset of Brand Boycotters.
Big brands cannot afford to be complacent and rely on loyal customers to keep them in business. For any brand looking to stay on a growth trajectory, winning the market among younger demographics and in developing markets is key. And in these markets, beliefs and perceptions matter even more than in mature markets. According to the same Edelman report, Millennials (60 percent) are more likely to be belief-driven buyers than other age groups. And in developing countries, belief-driven buyers are more prevalent compared to other nations with 73 percent of customers being belief-driven and 65 percent in India.
Brendon Steele, senior manager of stakeholder engagement at Future 500, explained in The Guardian: “Although seemingly intangible, the brand value alone of a consumer-facing company can be worth billions of dollar. The brand is what connects with consumers. Done strategically, putting a brand at risk can encourage a conversation.”
While many large brands with loyal followings (read: Starbucks) have weathered multiple attacks without harming their brand, others are not so lucky. The 1990s Nike boycott was extremely effective in causing a drop in sales after activists accused the brand of using child labor. But the biggest long-term hit the company took was not just to its sales, but to its brand. For the last few decades, the company has invested millions not just into restoring its reputation, but into becoming a leader in sustainability through supply chain design.
Companies also need to consider how PR crises affect investor sentiment. As Bruce Watson wrote in The Guardian: “In addition to preserving the long-term value of their brands, companies facing consumer boycotts have another pressing concern: preserving the short-term value of their stocks.” (Do Boycotts Really Work?)
While a few thousand individual customers’ choice to eat elsewhere may not hit behemoth corporations where it hurts, shareholder pressure to mitigate a highly public boycott might. On the other hand, if a CEO can quickly quench an escalating PR crisis, it may even improve his or her standing among shareholders.
At the end of the day, the question is: which hurts more? The dip in profits when customers take their money elsewhere? Or are there bigger things at stake?
While sales may bounce back in a matter of time, such incidences can cause serious damage in other forms: reputational issues that can cost a lot of time and money to undo, unrealized additional profits, and dampened investor sentiment.
Regardless of whether consumer brand boycotts continue to increase online, the threat to a brand’s reputation is still as real. As one commentator put it:
“Ten years ago, people would join a boycott group and send angry letter. Now they send an angry or ironic Tweet. Boycotts are effective, but they don’t have to happen now. Thanks to social media, the fear of a bad hashtag means that damage is done before a boycott actually has to happen.”
How can brands manage boycotts in an age of social media?
To prevent potential threats from escalating into a crisis, savvy community managers should take preventive measures to avoid brand attacks. Or, when they cannot be avoided, a predefined plan should already exist on how to address the boycott head on, mitigating the damage with clear facts, policies, and links to more information.
This is easier said than done. When you are managing multiple platforms, dozens of ad campaigns, and hundreds of individual ads at scale and a reputational crisis hits, it can be overwhelming to try and sift through and respond to the flood of noise and criticism directed towards your brand at one go.
This is where BrandBastion comes in. We specialize in helping brands manage their engagement when such crises hit. Recently, we published an analysis of over 20k comments received on QSR Instagram ads running in the US and Canada between 2016 and 2018. We found that 1 in 7.5 of all comments posted on QSR ads are negative.
Out of those negative comments, 1.8% of all negative comments contained criticism of the fast food industry in general, while 3.2% were aimed specifically at the company, and 4.9% were aimed at a brand’s corporate practices. When you add that up, almost 10% of all negative comments are related to perceptions of a brand’s values - that have nothing to do with the actual food or customer service. And this 10% is worth listening to as an indicator of broader public sentiment.
At BrandBastion, we are able to monitor sentiment, emerging topics, and other key insights in real-time, 24/7, as they unfold, using a combination of human moderation and an AI and machine learning solution. This allows you to address a potential issue before it becomes a hashtag. We also help respond to customer queries at scale in 8 minutes or less, and this timeliness in responding has been a significant factor in quelling dissatisfaction with brands.
Read BrandBastion’s Q2 2018 analysis of over 20,000 comments posted across ads of 11 quick-service restaurant brands to gain the latest insights on the biggest issues and opportunities facing fast food brands today.
Want to learn about how BrandBastion can help your company manage engagement across platforms?