Corporate political stands may lead to consumer alienation

Corporate political stands may lead to consumer alienation

Chick-fil-A same-sex-marriage fallout offers lessons to industry

The firestorm that engulfed Chick-fil-A following comments made against same-sex marriage by leader Dan Cathy may have ebbed, but the fallout continues.

More than a month after Cathy, president and chief operating officer of the 1,600-unit quick-service chain, stated to the Baptist Press that he was “guilty as charged” in his support of “traditional marriage,” angry students at the University of Maryland circulated a petition to shut down a campus outpost of the chicken purveyor.

Meanwhile, in late August a local official in Eldersburg, Md., threw his support behind the proposed opening of a Chick-fil-A unit in his town. According to reports, the town’s commissioner took the mayors of Boston and Chicago to task for saying the brand was unwelcome in their cities following Cathy’s comments in late July.

Clearly, Cathy’s statements have polarized Americans nationwide, leaving experts somewhat divided on the impact to Chick-fil-A’s business. The incident not only illustrates the dangers of mixing a business leader’s personal politics with the accelerant of social 
media, but also shows what happens when a business unintentionally alienates a segment of the population.

“This was not net a good thing for Chick-fil-A to get into,” said Ted Marzilli, senior vice president of YouGov BrandIndex, adding, however, that the chain’s fans and political supporters would likely help it recover. 

But branding consultant Jeff Lotman said he sees it differently.

“I think overall this is a great publicity coup for Chick-fil-A,” said Lotman, chief executive of Global Icons, a brand-licensing and marketing agency. “They’ve gotten exposure that’s just enormous. Not that I believe for one second that [Cathy] did it on purpose.”

For its part, Chick-fil-A is now mum on the incident. The 
Atlanta-based company refused to comment after making this post to its Facebook page:

“The Chick-fil-A culture and service tradition in our restaurants is to treat every person with honor, dignity and respect — regardless of their belief, race, creed, sexual orientation or gender. We will continue this tradition in the over 1,600 restaurants run by independent owners/operators. Going forward, our intent is to leave the policy debate over same-sex marriage to the government and political arena.”

Careful what you say

Cathy’s comments were made July 16 to a Christian news wire service. In explaining his views on marriage, he said, “We are very much supportive of the family — the biblical definition of the family unit. We are a 
family-owned business, a family-
led business, and we are married to our first wives.”

Within days the story had launched heated discussions in mainstream news outlets and social media, and protesters and supporters alike had taken to Chick-fil-A parking lots.

Just as detractors began denouncing Cathy’s stand, supporters rallied. Former Arkansas Gov. Mike Huckabee declared Chick-fil-A appreciation day Aug. 1, prompting thousands to rally around the beleaguered chain. Chick-fil-A did not divulge sales results but called it “an unprecedented day.”

Still, the court of public opinion was not kind. Chick-fil-A’s rating by YouGov BrandIndex, a New York-based firm that measures consumers’ perceptions of a company based on its “buzz,” plummeted. The index reflects six metrics, measuring quality, value, satisfaction, willingness to recommend, general impression and reputation. 

Before July 16, Chick-fil-A had a score of 64.9 on a scale of negative 100 to positive 100, well ahead of most QSR chains. By July 25 it had slipped to 38.7. Meanwhile, it had fallen to negative 52 among people who identified themselves as lesbian, gay, bisexual or transgender, or LGBT.

Chick-fil-A had already been the target of a boycott by people protesting the company’s financial support, through its WinShape Foundation, of organizations that, among other agendas, advocate against same-sex marriage. The Baptist Press story likely magnified the intensity of those feelings, said Bob Witeck, president of Witeck Communications, a firm specializing in marketing to LGBT consumers.

“Gay consumers aren’t that different from anybody else,” Witeck said. They want to feel respected where they spend their money, he said.

Witeck estimated that 6.7 percent of the adult U.S. population self-identifies as LGBT, or between 15 million and 16 million people, based on research by Harris Interactive. He put their collective disposable income for 2012 at $790 billion. 

While that figure is not substantially higher than in other demographics, the LGBT population tends to spend a greater share of wallet on dining and travel, in part because fewer of them have families, he said.

He pointed out that while a smaller proportion of LGBT individuals are part of a couple, the same percentage of same-sex couples as straight couples — about 65 percent — are raising children, according to the U.S. Census Bureau.

Given Chick-fil-A’s contributions to companies that oppose gay rights, “these customers can’t feel respected at all,” Witeck noted. “That’s something a company wants to avoid if it can, and this company failed.”

A growing consensus

The number of Americans expressing support for same-sex marriage is on the rise, according to the Pew Research Center. In an October 2011 poll the group found that respondents were split almost evenly, with 46 percent supporting same-sex marriage and 44 percent opposing it. Fifteen years earlier, in 1996, only 27 percent favored same-sex marriage while 65 percent opposed it.

Demographic shifts have played a big role in that change, according to Pew Research, which found that 59 percent of Millennials support same-sex marriage, compared to 42 percent of baby boomers.

Regardless of the size of a community, Margot Cairnes, founder of Sydney-based consulting firm Zaffyre International, advised against offending anyone.

“We want people on our side,” she said. “[We want] their word of mouth, their positive blogging. If you own a hotel and only want people with purple hair, you can insult everyone else you like. Otherwise, it’s a really dumb thing to do.”

Further, she noted, a single person can start a campaign against a company.

“If you upset them, they just might want to upset you,” Cairnes said. “In fact, you don’t have to say you don’t like Chick-fil-A; you can say you went there and got sick.” 

Observers noted that statements about a brand’s food quality can be more detrimental than others.

By early August, Chick-fil-A’s buzz scores were leveling out, according to Marzilli, who said he expected a recovery in four to eight weeks. By comparison, it took Taco Bell four months to recover from the publicity surrounding a lawsuit filed in January 2011 claiming that the chain wasn’t serving real meat, he noted.

And it took Domino’s longer to recover from a video released in early 2009 of employees contaminating the food they were making. The company blamed a 0.7-percent drop in domestic same-store sales that quarter on the negative publicity.

“With Domino’s and Taco Bell, the issue was related to food quality,” Marzilli said. “That potentially sticks with people for quite awhile.” 

With Chick-fil-A, consumers are considering politics, he said, “and there are people on either side.”

Still, Lotman of Global Icons said companies should not take political stands. “I think this is fraught with danger. It could really blow up in your face,” he said. 

Contact Bret Thorn at [email protected] [3].
Follow him on Twitter: @FoodWriterDiary [4].