The Peril of Weak Values

And conversely, the power of strong, lived values

A company's values are becoming an increasingly important part of a market's buying decision making - and that market is made of up thousands or millions of individual people. And, in a world where people are losing trust in governments and other traditional guiding institutions (Edelman Trust Barometer), there is evidence that they are turning or rather expecting more leadership from business - and the people who run those businesses. Sixty-three percent of consumers and employees buy or advocate for brands based on their beliefs and values, and 69 percent say having a societal impact is a strong expectation or deal breaker for job candidates.

There have been several cases recently where companies have truly demonstrated the strength - or weakness - of their values; 2 in particular provide and interesting contrast:

In 2018, Nike endorsed Colin Kaepernick the former NFL quarterback who had repeatedly and publicly protested against racial injustice by famously kneeling at games during the playing of the national anthem. Nike had longstanding espoused values of diversity and inclusion, and when the backlash and calls for boycotts came after endorsing Kaepernick, Nike stuck by its decision. And ultimately, the company saw a 31% increase in sales following the campaign launch. They lived their values and in so doing strengthened their brand and their brand loyalty - they may have lost some customers, but they gained many more who shared their values.

Bud Light (part of the drinks giant AB InBev) has a very nice DEI statement that explicitly says the company aims “to make our company as diverse as the communities we serve". In 2023, they entered into a marketing campaign (which comprised a single Instagram posting) with Dylan Mulvaney - a transgender influencer. Their aim was to gain traction into the younger end of the market by appealing to a more diverse community which significantly included LGBTQ; there was an initial positive reaction from this potentially new part of the market. But there was an immediate and sizable negative reaction from a section of their existing customer base - who incidentally were already in decline. Bud Light backtracked and distanced themselves from their marketing decision. Their existing market didn't forgive or forget, and their potential new market protested even more. They lost trust from the market on both sides of the issue. Bud light's action and reaction was based on market and financial considerations - not values. And it didn't pay off. Bud Light sales are still down, but AB InBev is huge and doing very nicely.

In general, a majority of consumers buy or advocate for brands that stand up for what they believe in. The specific values your company holds are less important than how authentically and consistently you adhere to them. Consumers are increasingly adept at sensing the gap between a brand’s promotions and its actions. Nike's success came not just from taking a stand but from doing so in a way that aligned with its historical brand message. In contrast, Bud Light's initial move and subsequent retraction suggested a lack of firm commitment to the values it espoused, leading to consumer distrust.

And while those consumers are more likely to purchase from, remain loyal to, and advocate for brands that align with their personal values, Millennials and Gen Z consumers in particular, prioritise corporate social responsibility, environmental stewardship, and ethical practices highly when choosing brands.

Here are some other companies that have built strong customer loyalty primarily through their commitment to ethics and values, sometimes going against market norms and even impacting product or service features like prices or convenience:

Patagonia, the outdoor clothing company, is renowned for its environmental activism. It commits 1% of its total sales to environmental groups and is known for encouraging sustainability through its business practices and products. This commitment has fostered deep loyalty among consumers who prioritise environmental issues.
Ben & Jerry's, the ice cream company, is known for its social activism, and has integrated social justice into its core mission, supporting various causes like climate change, racial justice, and refugee rights. This stance has attracted customers who share similar values, and who are prepared to pay higher prices when compared to competitors; they do make exceedingly good ice cream though.
TOMS Shoes gained popularity not just for its footwear but for its "One for One" model, donating a pair of shoes for every pair sold. This model has appealed to consumers who value corporate philanthropy, and whose purchase decisions were based on the company's charitable actions.

Are your values truly reflected in your (and your company's) everyday behaviours, core business practices, and strategic decisions? Are they embedded in your culture? More about that here: How to Evaluate your Values

Give me a call if you want to discuss.

Graham