Corporate activism: Should hotel brands take a stand?
This post is an original commentary piece which appears on Hotel Executive.
Getting involved in cultural and political debates can be a dicey proposition for businesses. While corporations are ultimately made of people who have their own values, beliefs, and positions, businesses are inherently not political organizations whose mission is to bring about social or cultural change. On the flip side, however, people purchase from companies with whom they identify. When customers believe the companies with whom they shop believe as they do, act in a manner they see as responsible, and generally align with their personal values, they are more likely to develop an emotional connection and have preference with those companies.
Conversely, if customers see brands as not being like themselves, or sharing their values, they will not want to spend their dollars with these organizations, particularly during this era when emotions are running so high.
According to a November 2018 study on consumer attitudes towards social responsibility of brands, 66 percent of respondents felt that they should take a more public stance on important social issues. Further, 61 percent claimed that they would recommend a brand aligned with their personal values. The data, however, shows a relatively even split between those that would or would not be impacted if a brand took a stance on something which they disagreed. While 51% say they would not be impacted by a brand’s activist stance, that leaves the potential to alienate the other 49%.
For some, consumers just buy a pair of shoes that fit their personal sense of style and represent a quality product. For others, an activist stance on which they disagree can be a turnoff regardless of how much they might otherwise like the product.
Because the country has many varying political views, taking strong stands can work for, or against, a business, just as it can for a Hollywood celebrity. While many embrace those that hold activist positions, there is an equal and opposite reaction for others. We sometimes put distance between ourselves and others with whom we not only disagree but see as our personal opposite.
As a hotel company, is this an area in which to get involved? Let’s look at the pros and cons, beginning with the arguments against corporate activism:
THE ARGUMENTS AGAINST
Potential Alienation of Customers
As stated earlier, cultural and political sentiment is more diverse than any time in recent memory. There are those who celebrate companies like Chick-Fil-A and Hobby Lobby for holding traditional values and conservative cultural positions, but others find them off-putting. While certain companies are lavishly praised for their outspoken diversity and inclusion efforts, some customers don’t find these companies to be relatable.
To the companies who are led by true believers, it is easy enough to be indifferent toward those with whom you disagree or hold contrary values, but for the company stakeholders, operators, and employees, whose livelihoods depend on the ongoing financial performance of the company, taking an activist stance can cause customers who do not identify with the company’s values and beliefs to take their business elsewhere. There are great success stories of companies whose customers rally around their values in large droves, but any company risking corporate activism must know there are enough who support them to keep the business thriving.
Costs Associated with Taking Activist Stances
There is a cost to any investment, particularly one targeted to bringing about change. Whether it is costs associated with the human resources functions (e.g., training, hiring, raising wages, etc.), implementing new technology, eliminating waste, or replacing older products with newer ones, there must be a commitment to investing in change. And a realization that if all employees do not agree with your stance, they may become disengaged and your turnover could increase and/or customer experience could suffer. All these things raise company costs.
In the end, these costs are passed along to the consumer. Some customers might be willing to pay more to do business with a socially responsible company, but others may be more reluctant, placing a company at an economic disadvantage. Ultimately, businesses are not charities, although they can be charitable. Make no mistake, however, channeling money, time, and resources into social activism must have a logical, demonstrable return on investment.
Nearly 50 years ago, the economist Milton Friedman argued that businesses’ sole purpose is to generate profit for shareholders. He maintained, companies that did adopt responsible attitudes would be faced with more binding constraints than companies that did not, rendering them less competitive. Friedman’s basic belief was that free markets, rather than companies, should decide what’s best for the world.
Sincerity May Be Questioned
Customers ultimately know businesses exist for profit. Therefore, it’s somewhat natural to react to a sign in a guest room requesting guests consider not having towels and bedclothes washed for the sake of the environment by questioning whether the real motive isn’t to avoid cleaning costs. Similarly, hotels that ask you to save on water and electricity for environmental reasons, save on operating costs.
There is no reason why you can’t both do the right thing and save money, but sometimes customers question whether the priority is to operate a business more cost effectively, avoid lawsuits, and avert bad publicity rather than acting out of true sincerity for the cause. Those who advocate for certain causes would still likely accept the idea that commercial support provides visibility for important issues regardless of the motivation.
THE ARGUMENTS FOR
Consumers Making Emotionally-Driven Purchasing Choices
Despite the costs and risks associated with corporate activism, there is a high payoff for success – if judged correctly. If customers identify with the values and stances you take, and consider those important, you will establish solid emotional connections. Many will stay with brands they like, and identify with, even if there are strong competitive alternatives available. When customers feel good about a company’s ethics and values, they will frequently make an emotionally-driven choice to do business.
Attracting and Retaining Top Talent Whose Values Fit the Organization
People want to not only shop, but want to work for, companies whose values they share. The more aligned employees and employers are on the corporate values and mission statement, the more productive and engaged they are in their jobs. While it’s likely true that everyone appreciates working for a company they feel good about, it’s widely assumed this is a particular priority for younger workers entering the labor force, and can go a long way in attracting good, young talent within the hospitality industry.
It’s a Way to Make Your Brand Stand Out
In an era where there are so many hotel brands, standing out is not easy. Corporate activism is a way to become known for something and gain notoriety. It’s an opportunity to get your brand in the public consciousness, at least among people who care about the things your brand represents.
If You Don’t Do it Voluntarily, Someone May Force You to Act Eventually
If social problems like waste management and other issues aren’t addressed voluntarily, there is always the possibility of greater regulation and oversight being passed. While more of a social responsibility example, many hotels are now choosing to phase out the use of tiny bottles of shampoo, conditioner and body lotions and replacing them with wall-mounted, refillable dispensers in an effort to reduce plastic waste – but now there’s also a bill making its way through the California Legislature that aims to eliminate the use of the tiny single-use plastic bottles at hotels.
If you take matters into your own hands and act, you are better able to design your solution and get credit for acting, rather than seeming like you had to be forced to do the right thing. Likewise, many consumers want the option themselves – like in the example of suggesting they reuse bath towels instead of leaving them to be washed – without being forced, allowing space for them to opt in and share in the effort or not.
4 WAYS TO TAKE ACTION
Given the arguments for and against corporate activism, here are some suggestions on how to think about these issues and consider taking action:
1. Pick Causes Which Have Near Universal Public Support
While there are a lot of controversial causes, there are some with which few argue the morality. For example, the American Hotel and Lodging Association (AHLA) has recently launched a national campaign to unite the industry against human trafficking. This is an easy one to get behind, and some organizations like Marriott International are even leading the charge. Marriott has trained 500,000 hotel workers to recognize the signs of human trafficking, and how to respond if they spot it, and is also now creating a program with the Global Fund to End Modern Slavery to prepare trafficking survivors for careers in hospitality.
2. Assess How Your Customers and Employees Stand on Issues
While it’s safest to support causes with near universal support, if you choose to support something a bit more controversial, make sure the vast majority of customers and employees share your position, as you don’t want to alienate people who might otherwise be loyal to you. You need to quantify the likely impact of the position you take – how many customers or employees will you lose, and why? Is there anything that can be done to retain them? On the flip side – how many customers or new talent might you gain? Do the gains substantially outweigh the losses? The answer requires research and analysis of the data – testing first, then acting.
3. Humanize Your Brand
Associate your leadership team with the causes they care about. Since the company ultimately reflects the values of its leaders, it’s important to associate them directly with the activities the company is supporting.
4. Make it Local
Being a good corporate citizen always means being a good community member. Show your customers that the causes you are contributing to are making a difference in the community.
Times continue to change, but it will always be important to take a strategic approach to corporate activism, with respect for employees, customers and company stakeholders. At its core, this issue boils down to applying a human-centered design approach, such as leveraging deep empathy and including the human perspective at each stage in the process. As such, supporting social change is worthwhile unless it damages, rather than adds value, to your consumer, employees and employer brand.