07 Jun Know Your Customer
The last several years in this nation have given many people the wrong idea about what they can and cannot “get away with” when it comes to involvement in politics and political issues. On January 22, 2016, Donald Trump told an audience in Sioux Center, Iowa that he “could stand in the middle of Fifth Avenue and shoot somebody, and I wouldn’t lose any voters.” Time and circumstances have largely proven him right. He has his fans and supporters, and they are likely to remain fans and supporters in the face of almost any act or statement.
Over the course of the seven-plus years since those words were uttered, others – including some of the people who run the nation’s biggest and best-known companies – have tested whether their fan bases are as loyal as Trump’s. Some, like the folks who run Nike, have been rewarded for their guts and their willingness to push the proverbial envelope, engaging in practices and campaigns that seemed dangerously foolhardy to many observers but that have, in fact, solidified or expanded their support. Canceling the Betsy-Ross-flag shoe at activist (and erstwhile quarterback) Colin Kaepernick’s insistence, for example, was supposed to hurt the company badly. The purportedly immutable law of “Get woke, go broke” was supposed to destroy Nike and Kaep, leaving them both reeling from the consequences of their “anti-Americanism.” But it didn’t, and Nike has actually done quite well in the face of objections to its political messages.
Obviously, however, not everyone or every company has been so fortunate. Kanye West found out quickly that expressing fondness for history’s greatest monsters is forgivable only if those monsters happened to be Communists. Likewise, Bud Light/Anheuser-Busch and Target have recently fallen on hard times sparked by their odd and over-the-top politically tinged campaigns.
There are, we’d guess, a half-dozen or more different explanations for why Trump and Nike have staved off political cancellation while the likes of Kanye, Anheuser-Busch, and Target have not. For our money, though, the most important of these is that the former have heretofore always abided by some variation on the old business adage “know your customer,” while the latter did not.
Kanye forgot that the overwhelming bulk of his support came from white, middle-class Millennials and Gen-Xers, none of whom were especially prepared for or especially cool with his affection for Hitler. Target got carried away with its Pride support, forgetting that its customers – middle-class families – were fine with Pride in general and with inclusiveness for gay men and women but were always going to be shocked and affronted by “tuck-friendly” swimsuits that went far beyond the traditional Pride message. As for Anheuser-Busch, its problem is that the Bud Light marketing team specifically and purposefully tried to change the demographics of their customers, infamously declaring that the brand was “too fratty” and, by extension, too cis-straight-white-male-ish. Bud Light, in other words, slit its own throat on purpose.
As we noted last week, a big part of the reason that companies like these – and countless others – have decided not to know their customers (or, more accurately, to ignore them) is because of pressure brought upon them by outside activist groups. These groups purport to be stakeholders and, because of their social power, convince corporate executives that, as stakeholders go, they are more important even than normal shareholders and customers. Corporate executives have conditioned themselves to turn traditional stakeholder analysis on its head and to cater to faux-stakeholders whose sole purpose is to engage in activism and undermine the essential purpose of business.
This is not, however, the only reason that businesses sometimes behave in objectively counter-productive and destructive ways. Sometimes they just do so by mistake. As we say, they are conditioned not to know their customers as well as they should, and as a result, they sometimes just screw up. This is inarguably the case with Target. The executives at Target took their customers’ decency and good nature for granted. Because their customers were always accepting of Pride products and events in the past, they assumed that they would continue to be accommodating, regardless of the content of their displays and promotions. And they went too far. They crossed a line they never even knew existed.
The lesson here is important, although it’s not one we’re entirely sure everyone gets. Consider, for example, the following:
Nike will celebrate Pride Month by hosting a panel discussion with a surgeon who said he performed “gender affirming mastectomies” on minors, a leaked email obtained by The Daily Wire reveals.
The email begins by stating, “This year’s theme is Together We Are Undeniable. The LGBTQIA+ community continues to fight for equality – their fight to be themselves.”
It goes on to explain that the theme “centers around determination; celebrating icons of the community and the progress we have and will continue to make in light of recent attacks and restrictions on the community and their allies.”
The Portland-based corporation will host a panel discussion with Dr. Blair Peters, a surgeon at the Oregon Health and Science University, who has admitted to performing “gender affirming mastectomies” on minors.
“Join the Human Rights Campaign, Portland Community Football Club’s Kaig Lightner, and OHSU Trans Health Program’s Dr. Blair Peters for a panel and Q&A to discuss policies impacting the transgender community,” the leaked email says, advertising the July 11 event….
Nike’s panel discussion is just one of several events the company is hosting to commemorate Pride Month. The corporation is also hosting a “family friendly” drag story time on July 13….
Nike also encourages employees to “join the Pride Network as we spotlight the pioneering gender-inclusive ‘Kids One Fit’ apparel.” Attendees to this event will also “unpack the conversation of trans inclusion in sport with a special screening of ‘Changing the Game,’” a film promoting the presence of male athletes in women’s sports.
Now, we won’t embarrass ourselves by predicting that this will hurt Nike. We were born at night, after all, but it wasn’t last night. What will do is suggest that this is different from Nike’s previous pro-Kaepernick, pro-BLM, anti-cop social justice efforts. More to the point, this strikes us as so different that it threatens to upend Nike’s well-earned reputation for knowing its customers. Nike’s social justice activity to date has focused on anti-establishment, rebellious sentiment and has appealed both to those who feel that they are treated unjustly by society and those who wish to associate with that sentiment. Nike also appeals to the “hip,” rebellious-wannabe-American-culture-adopting young men (primarily) in foreign countries, namely China. It’s hard to see how Nike’s social justice shift to trans issues will entice any of these customer groups. Indeed, it strikes as more likely that it will repel many of them.
Do we know for certain that Nike is pushing the envelope too far, that it is going to cross the same unseeable line Target crossed? Of course we don’t. And we assume that Nike executives have thought this through rather rigorously.
At the same time, we know that no one is infallible. More to the point, we know that external pressure from those pushing ESG/woke capital concerns has put ALL executives of publicly traded companies in the awkward position of knowing the activists better than they know their customers.
In this case, Nike represents the majority of American corporations that have thus far managed to avoid significant customer reprisals. But in many instances, that’s just pure luck, and that luck won’t hold forever. You can only get away with “standing in the middle of Fifth Avenue and shooting somebody” if that’s what your customers want. If you do so at the behest of activists and against the will of your customers, you will suffer the consequences – no matter who you are or how well you’ve done in the past.
