Commentary
When businesses back candidates, the customers won't all be happy
by Kathy TunheimWhen the U.S. Supreme Court issued its ruling on Citizens United vs. Federal Elections Commission in January, it was widely understood to be a big deal. Both those who praised the decision and those who condemned it predicted a reshaping of political campaigns in America.
In layperson's terms, the ruling means that organizations (like corporations and unions) have the same freedom to spend money to support political candidates that individuals have under the First Amendment. So to the extent that organizational involvement in politics has been indirect in the past, the decision clearly created a new standard: Organizations can play in full-court political action.
In the months since the decision came down, courtside chatter has speculated whether Minnesota organizations would get involved -- and, if so, to what extent. Well, it is only July and we haven't even hit our first primary election, but the early results are in: Organizations will play. Well-informed estimates scope the stockpiles of funds to be spent in support of candidates as at least $5 million in Minnesota this year, including organizations all along the political spectrum.
What has been much less debated, at least out in the open: Should these organizations jump in where the Supreme Court has allowed them to go?
The argument for a union or a business trade organization is relatively straightforward: The Citizens United ruling gives them an additional new tool to wield on behalf of their members, whose stance on various political issues or candidates is likely already known -- and likely relatively consistent. Such organizations have a history of endorsing candidates and funding causes, under previous campaign rules. So upping the ante by also directly funding a particular candidate's campaign seems a potent sweetener that will enhance the relevance of those organizations in the eyes of their membership. The challenge lies in finding the money to pay for it, without cutting other services that the members might actually value more highly.
For corporations, the analysis is more problematic. The "stakeholders" of most corporations are not likely to have well-aligned views on political issues. In an ongoing way, corporations balance the often-competing interests or priorities of customers, shareholders, employees, vendors and neighbors. And the more public the company, the more challenging the balancing act can become.
Do these stakeholders all view economic issues the same way? How about social issues? Importantly, do they see the role of a corporation as "citizen" the same way? Not in my experience -- and there is the rub.
The past practice of engaging in politics via political action committees (PACs) -- campaign funds to which employees of a corporation could voluntarily contribute -- avoided the trap of putting a corporation's political priorities explicitly out for review. But in the new world, post-Citizens United, there is no place to hide. Full-court play puts it all out there: A corporation's political contributions will be public information, available on the Internet along with almost limitless information about the candidates they fund.
And it should be expected that campaigns will display the same intense competitiveness in this new political competition -- they will aggressively promote their friends and aggressively denigrate their opponents. The stakes are high for everyone involved.
As a result, it seems to me there are at least a couple of important considerations for organizations to contemplate before they step into the new rules of full-court political engagement.
The first consideration is history, and a goal of "no surprises": an organization's past connections to a candidate, to causes and issues associated with a candidate, and to people associated with the candidate, cannot be a surprise. Fair or unfair, the public gives no latitude to an organization that does not acknowledge -- or does not understand -- the relevance of its own history.
The second consideration is the definition of a "corporate" political view. PACs have the benefit of donor designation, or a board empowered to distribute its campaign contributions. Under the new rules, "the corporation" makes political contributions to candidates "it" supports -- and while the amounts being spent may not be significant from the corporate donor's point of view, they are large enough to cast real shadows on the political playing surface.
Over time, I would expect the corporations that play will either develop transparency in this decision process (as they have with PACs), or make provisions to weather the storms that occur when they can't align the priorities of all their stakeholders.
Time will tell which organizations adapt well to the new rules, and which choose to play at all. Time will also tell whether the new rules provide any reason to hope for a higher quality political discourse -- which is what the game really needs.
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Kathy Tunheim is CEO of Tunheim Partners, Inc., a Minnesota-based communications agency, and president of IPREX, a global public relations consultancy in 85 markets worldwide.
Comments (9)
One large difference between union contributions and business contributions over the years is that union members not only contribute to campaigns (in part) through their dues, but they are also voters. Many (but not all) union members will heed a union endorsement and vote accordingly.
Businesses, on the other hand, can now contribute from corporate coffers that are generated by customers and other business dealings. Brick and mortar, however, do not vote.
I have taught graduate marketing, and one thing you have to realize is that companies not only develop their brand, but also develop their brand "personality". They pay to have you view them as a person you would invite into your house. They want you to begin to trust them in the way that you would trust a neighbor. They want you to identify with them--so that you are a, say, a Target person, and not a Walmart person, for example.
So, what is strange is that Target is endorsing a candidate.
Think for a moment. Is there a relative or a co-worker you avoid because of their political views?
Yes.
What this Target political endorsement tells me is that senior management does not understand the value of the the brand.
They should be fired before the damage it any further.
I am surprised that the leadership at a company as saavy about its public image as Target is would wander into the political campaign season like just another partisan eager to drop money on perhaps the most divisive race of the moment . And make no mistake, donating to Tom Emmer by way of MN Forward is not simply a business as usual. It is
financing the most ideologically centric wing of the GOP during a time when we direly need pragmatism and expertise if we are to solve the seemingly intractable economic problems that lie ahead. This issue is being characterized as a turnabout by Target on its relationship to the gay community, but that's not the least of it. What's mistaken is the idea put forward by Target CEO Greg Steinhafel that funding the policies proposed -- slim though they are -- by the Emmer campaign somehow is in Target's best interests as a corporation. That strikes me as a deeply shallow understanding of what lies ahead for the business community if we put another ideologue into office in this state. If our public services, infrastructure and the integrity of local government are allowed to be bled in the name of anti-tax ideology, that is surely going to make it harder for Target to do business. It will be very easy for me to stop shopping at Target over this.
In addition to my comment above, what is also going to affect Target is the following:
If a customer develops an attitude that they do not "identify" with the "personality" of the company, and still shop there, they will, in the future, amplify any defect or poor service they receive from that company. In other words, you are tolerant of a friend, and a person you identify with and you give them slack if they make a mistake: you do not do that to a vendor, or one that endorses political candidates of either party.
This action by Target will lead to some interesting consumer research.
What is also interesting, from a marketing perspective, is how Target is responding to this flap.
In marketing, there is something called "framing" an issue: the issue here could be "framed" two ways: 1. Corporate endorsement of political candidates, now possible because of Citizens United OR 2. support of a candidate hostile to GLBT rights.
So, how, if you were Target, would you respond to this flap: would you chose to respond on the right to endorse a candidate, or would you respond on the GLBT issue.
You would respond on the GLBT issue, and would want the debate to be framed on how Target responds to GLBT issues. Why? Because you can buy off that group and talk about your GLBT workplace.
But, how can you talk about endorsing candidates without getting everyone angry.
Look at how Target is reacting to this flap. Ask: how is the issue being framed and how is it being framed by the target (pun intended).
Interesting marketing questions.
Here is another question that you might consider from a retail marketing perspective, and ask whether retailers should be engaged in political endorsements.
Elections occur in November.
When do people make critical discretionary purchasing decisions.
What is senior management thinking of when they involve their brand in a political contest that crests just before the Christmas season.
Well, this shopper has become a former Target shopper. We shopped at Target for 2 reasons: 1) they would donate part of the proceeds to our kids' public school; 2) the store is convenient to our home. We generally spent $200 to $600 per month there, and have done so since 1984. After hearing that Target is supporting the Emmer campaign, I joined Costco (yesterday), and am determined not to patronize Target any more. I just don't understand what their strategy is: alienating a large portion of their customers? They had the benefit of being the not-Walmart; now they are just another greedy big box store willing to throw their weight around publicly, to the detriment of many of their customers.
I am no longer shopping at target for the same reasons that I am no longer Wal-Mart shopper. i am willing to pay a few cents more for products and practices that benefit the world I live in. I am not willing to tolerate corporate influence that in the political aspects of our lives.I think they need to stick to social programs. This is the problem with the US model of doing things and only working for the betterment of your faction. I think that to truly prosper a company should want the society that they operate in to be the best it can. This is the key to long term viability and not short term profits.
Target is killing the goose that lays the golden egg by endorsing political candidates.
Target is engaged not just in marketing products, but in relationship marketing--
1. getting a credit card (high margin);
2. opening a pharmacy relationship and transfering prescriptions to the pharmacy (high margin);
3. bridal registry (high margin and signally your friends that you shop at Target).
All of these activities require work by the customer to create the relationship, and they are "sticky" relationships.
Target will probably not acquire as many of these relationships in the future, and may lose some, from political endorsements.
Why a brand image company would involve its brand in endorsing a candidate from ANY party is beyond me.
And, to do it in a partisan political process that peaks just before the Christmas buying season is the height of folly.
Target management must not value its brand and brand identity. It is very costly to acquire brand identity--and very few retail companies like Target have been sucessful in getting it. Goes to show how much you can lose from not understanding the value of your brand.
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