You’re likely aware that U.S. boycotts recently depressed Anheuser-Busch’s US sales by an estimated 14% and Target’s by about 5%. If you’re a business leader, whether for a small or large company, this might alarm you. After all, the boycott-inciting offense is so commonplace that your business most likely practices it: supporting the LGBTQ+ community and cause.
Should you be concerned that your company’s LGBTQ+ Diversity Equity and Inclusion (DEI) practices pose a financial risk?
Probably not. It turns out that boycotts over an issue that evenly divides the population, or close to it, rarely work. This is the case with the LGBTQ+ cause. A slight majority (55%) of Americans morally oppose the transgender cause, which the above boycotts focused on, but a comfortable majority (64%) morally support the broader LGBTQ+ cause. However you slice it, roughly half the population sits on each side of your DEI LGBTQ+ stance.
Allow me to explain why this protects you from a fiscally damaging boycott. If your company is like most, it sells to fewer than 20% of the population. Let’s assume you sell to one in five Americans. This means that a maximum of 20% of people can buy less in response to a boycott. If the issue divides your customer base down the middle, the potential boycotters drop to 10% of the population. Also, those who boycott have a hard limit to the damage they can inflict: They can’t buy less than zero.
Granted, giving half your customers a potential reason to drop your product is frightening. But the damage of boycotts is mitigated by what the other side of the divide does. Boycotts generate opposing “buycotts,” or calls to support the company. The buycott is typically stronger than the boycott because, first, existing customers and others who approve of your position can boost their purchases infinitely. Second, per this example, 80% of the population can start buying your product and roughly 40% have reason to. If your company sells to 20% of the population, then, it probably benefits from a buycott that is over four times stronger than the boycott. This is a crude calculation that ignores whether your customers lean in a certain direction, how amenable your product is to varying the quantity purchased (we only buy cars, for example, every few years) and many other factors. Still, it illustrates the formidable barriers a boycott related to the LGBTQ+ cause faces and why there are so few examples of successful ones.
If boycotts involving the LGBTQ+ cause rarely work, why did they work against Anheuser-Busch and Target? Numerous factors contributed to the saga of these brands, but two are key. First, both companies sell to a large of majority Americans. Therefore, they aren’t as protected as most companies by the aforementioned barrier to a successful boycott. This alone, however, should not have sufficed to generate the economic harm these brands suffered.
The second and more important culprit in Anheuser-Busch and Target’s misfortune was mismanagement. Instead of maintaining their pro-LGBTQ+ position, both brands buckled under the pressure of anti-LGBTQ+ demands. This cause abandonment led social-justice advocates to also call for a boycott. Given that everybody had a reason to boycott and no one had a reason to buycott, it’s not surprising the boycotts against Anheuser-Busch and Target succeeded.
Nike, a brand that also has the disadvantage of selling to the majority of Americans, illustrates a more productive response. It partners with the same transgender influencer, Dylan Mulvaney, as Anheuser-Busch did and faced the same social-media calls for a boycott. But instead of capitulating to those burning its products on social media, Nike remained firm in its position. In fact, while social media feverishly attacked Anheuser-Busch’s partnership with Mulvaney, Nike launched commercials featuring her. There’s little doubt that the athletic company lost some sales but, as covered earlier, it may have gained more than it lost. Since social media started calling for a Nike boycott, the company’s sales have been unexpectedly high.
The media covers only successful LGBTQ+ boycotts precisely because they are rare. Yet, social media harbors images of people burning, shooting and otherwise maligning Crest toothpaste, Kate Spade clutches and KitchenAid appliances as these brands also partner with Mulvaney. Yet, they — and the thousands of other brands that support the LGBTQ+ cause — haven’t been bruised by boycotts.
Moral of the story? If your company is prepared to remain firm on its LGBTQ+ stance, its sales will likely weather any boycott such stance provokes.