In the days after the election of Donald Trump, an executive from U.S. sneaker company New Balance was quoted supporting the incoming American president's planned rejection of the Trans-Pacific Partnership trade deal. Picking up on the comments, a white-supremacist website called the company the "official brand of the Trump Revolution." As the news spread, so did calls for a boycott, with some of the company's customers literally burning their shoes in protest, despite efforts by New Balance to clarify its position and distance itself from the dubious endorsement.
Welcome to the new world of the Trump effect and fake news. Along with the spread of anti-establishment populism, a new relationship with facts has taken hold, with consumers ready to believe and act on what they hear and read about companies regardless of its veracity. A casual tweet or comment can cause a sudden social-media storm that puts corporations at risk of losing control of their brands. The financial costs are real. Tweets from Trump have caused shares of several companies to plunge within minutes. When Pepsi's CEO made comments perceived as anti-Trump, its stock price dropped 6% on worries of blowback from either Trump's supporters or the man himself.
Simply countering false narratives with facts is no longer enough. Consider: When The Washington Post conducted a test in which Trump and Clinton voters were shown photos of Trump's 2017 inauguration crowds and Obama's 2009 turnout, 15% of Trump voters insisted that the clearly bigger Obama crowd was smaller. Allegiances and perceptions become reality.
Because viral bubbles tend to start on Facebook and Twitter, it is there that brands need to address them. Rumours and boycotts can now spread within hours, so companies need to constantly monitor these channels and have plans for a rapid response. At a time when loyalty trumps facts, so to speak, cultivating an emotional connection to consumers becomes all the more crucial. For a company to dryly affirm its principles or refute rumours through press releases is far less effective than doing so through a popular social presence.
For example, when Trump praised the support of an L.L. Bean board member in a tweet, some Twitter users organized a boycott of the company, assuming L.L. Bean endorsed Trump's policies. Chairman Shawn Gorman took to Facebook and, in a message that garnered more than 18,000 comments and 37,000 "likes," explained that his family-owned business supports no specific political agenda. By taking the message to the site of the outrage, L.L. Bean was able to not only diffuse the uproar but get positive press coverage of its response.
In today's highly politicized environment, such neutrality is not always possible, however. A couple of years ago, an angry backlash to perceived political correctness roiled the video game community, with some gamers aiming virulent, often sexist, abuse at game company executives and journalists who suggested the industry should be cleaned up. Firms that refused to give in to the enraged mob lost some customers.
These types of costly choices may be increasingly necessary, and companies have to be willing to draw hard lines around principles like diversity and equality that they refuse to cross. For the long-term health of the brand, businesses need to adopt a new mantra: The customer is still mostly right, until those moments when they are, in fact, wrong.