by Will Ashworth | August 23, 2012 1:00 pm
Branding expert and best-selling author Martin Lindstrom wrote an article for Fast Company on Aug. 16 entitled The Chick-Fil-A Way: Why Brands Should Have Stronger Opinions. He makes the argument that regardless of your opinion of Dan Cathy or his views about same-sex marriage and family values, the fact is many Americans never heard of the man or his restaurant until he expressed his strong, deeply felt opinions.
Former presidential candidate Mike Huckabee called for a Chick-fil-A Appreciation Day — and the company set a one-day sales record. That’s the power of strong opinion. Lindstrom knows this better than most. Does your brand walk the talk? Here’s look at a few brands that have strong opinions and aren’t afraid to share them.
Lindstrom’s suggestion that brands should have stronger opinions doesn’t mean every company should grab on to the nearest and dearest social cause. Rather, he’s talking about honest communication between brands and the consumers they’re selling to. People want to know that you stand for something besides making money.
Estee Lauder (NYSE:EL) is a great example of a company that’s always stood for one thing: Every woman can be beautiful. At the core, it’s about making women feel good about themselves. Lindstrom believes that the more outspoken Estee Lauder is about its core values, the stronger its bond with consumers. Over the last 15 years, its stock has achieved an annual total return of 11.7%, 700 basis points higher than the S&P 500. The company’s focus on what’s important had done well by shareholders.
Some people have become so cynical that the mere mention of Starbucks (NASDAQ:SBUX) makes their skin crawl. The fact that the company and its CEO, Howard Schultz, spend so much time expressing its beliefs seems off-putting to many. But that’s exactly what Lindstrom believes companies and — by extension, their brands — should be doing: speaking out and expressing their opinions.
I can remember reading Schultz’s first book Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time back in 1999 when it was first published and thinking how great it must have been for employees to walk into work every day knowing that your employer actually cared about your health and wellness. Right there on its website under the Wellness section is its unwavering support for meaningful health care reform.
When Schultz returned as CEO in 2008 to turn the struggling company around, a shareholder called him suggesting it was an opportune time to cut part-time benefits. Indeed, it came as the company was cutting costs at every level. However, Schultz stuck to his guns and retained those benefits, telling the shareholder he should sell his stock if he felt that way.
The shareholder cut his position, which was a mistake because Starbuck’s stock is up 168% since January 2008 compared to a 2% gain for the S&P 500. It’s a clear example of doing well by doing good.
Equally outspoken as Schultz is Whole Foods Market‘s (NASDAQ:WFM) CEO and founder John Mackey. Google the words “John Mackey Whole Foods,” and you’ll find no shortage of news stories both current and from the past. His desire to speak freely got him in trouble with the SEC back in 2007 when it came to light that Mackey was anonymously voicing his opinion about the company on finance message boards. An ardent supporter of free speech, Mackey has thankfully refrained from further message board participation.
However, it hasn’t stopped him from speaking his mind. Reason magazine recently interviewed Mackey at the 2012 Freedom Fest in Las Vegas about the moral case for capitalism. The six-minute interview discusses why businesses need to shift the narrative to a more positive framework that recognizes the important contributions they make to the economic well-being in this country.
Furthermore, he suggests that Whole Foods gets a bad rap for its part in defining what “organic” actually means. Lastly, he suggests that businesses must have a purpose beyond making money, that they make some type of contribution to other people.
It’s no surprise then that both Whole Foods and Starbucks are on Fortune‘s list of the world’s 10 most admired companies from a social responsibility perspective. Whole Foods’ website lays out its seven core values in detail. While I’m sure they’re not perfect, putting them to paper makes the company accountable to all stakeholders. It’s this commitment to open communication about its values that has seen it achieve shareholder returns equal to or better than Starbucks over the long haul.
In the end, brands that resonate most with consumers are those that aren’t afraid to speak up and forcefully, albeit politely, express their opinions. You might not agree with Dan Cathy or his views, but you have to respect a person who’s willing to sacrifice the well-being of his or her business in support of their values. If you’re an employee of Chick-Fil-A, you know what the brand stands for, and that’s much needed in Corporate America.
As of this writing, Will Ashworth did not own a position in any of the stocks named here.
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