Should Brands Be Picky About Their Customers? - The Case of Rishi Sunak and Adidas
A recent LinkedIn post featuring Rishi Sunak wearing Adidas sparked debate among marketers. Some saw it as a negative reflection on the brand, while others argued that brands shouldn't be so selective with their customers. Let's delve deeper into this question and explore the complexities of brand-customer relationships.
Branding vs. Marketing:
Marketing and branding are often conflated, but they are distinct aspects of a company's strategy. Branding focuses on the brand's identity, including its tone of voice, values, overall vision, and mission. It's about establishing a unique personality that differentiates it from competitors offering similar products. A strong brand serves as the foundation for a successful relationship with customers, similar to how "love" (the product) isn't enough to sustain a relationship without compatibility between partners (brand and customer).
Customer Retention is Key:
According to a report by McKinsey & Company (https://www.mckinsey.com/~/media/mckinsey/email/rethink/2023/08/2023-08-16c.html), retaining existing customers is 5 to 10 times more cost-effective than acquiring new ones. Building strong brand loyalty fosters customer retention.
Marketing's Multifaceted Approach:
Marketing looks at the bigger picture beyond branding. It considers a company's business objectives, target audience, and data analysis. From studying user behavior on websites to understanding target demographics, data plays a crucial role in strengthening brand-customer relationships. Today's consumers increasingly make choices based on values alignment rather than simply needs.
Oatly's Strategic Shift:
A prime example is Oatly. They shifted their target audience from lactose-intolerant individuals to environmentally conscious consumers interested in plant-based milk alternatives. This strategic move contributed significantly to their success, culminating in a Nasdaq listing (https://www.nasdaq.com/market-activity/stocks/otly). Articles discussing Oatly's growth strategy often mention their target audience shift, highlighting how focusing on sustainability resonated with environmentally conscious consumers (e.g., https://www.forbes.com/sites/simonmainwaring/2023/01/09/whats-the-big-idea-oatlys-extensive-support-of-small-coffee-entrepreneurs/).
The Rise of Social Responsibility:
The 2024 Edelman Trust Barometer ([https://www.edelman.com/trust/2024/trust-barometer]) revealed that consumers have more faith in businesses than their governments. This highlights the growing expectation of social and ethical responsibility from brands. Many companies are becoming more environmentally conscious, reducing their carbon footprint and promoting sustainable practices. However, "greenwashing" and "wokewashing" tactics employed by some large corporations undermine consumer trust.
Scrutiny on Environmental Claims:
A 2022 Bloomberg feature by Michael Cohen (https://www.bloomberg.com/news/articles/2024-01-18/biggest-cocoa-rally-in-decades-is-leaving-top-producers-behind]) criticized companies like Coca-Cola and Nestle for their role in plastic waste pollution and endangering communities in Ghana and West Africa. This incident underscores the importance of authenticity in a brand's social responsibility efforts. More importantly, according to a 2022 brand audit report by Break Free From Plastic, a global environmental organization advocating for plastic pollution solutions [Break Free From Plastic: https://www.breakfreefromplastic.org/], The Coca-Cola Company has been named the world's worst plastic polluter for five years in a row [ Greenpeace USA: https://www.greenpeace.org/international/story/47293/coca-cola-its-time-to-stop-your-pollution-at-source/ (This source mentions Coca-Cola being the worst plastic polluter in the 2022 Brand Audit)]. This highlights the ongoing issue of plastic pollution and the need for corporations to adopt more sustainable practices.
The Reality of Consumer Economics:
While consumers value alignment with brand values, economic factors often play a significant role in purchasing decisions. Customers may share a brand's values but lack the financial means to afford their products. Conscious consumerism is gaining traction, but it's important to remember that consumer power is just one piece of the market puzzle, alongside businesses and governments. Companies like Shein, a fast-fashion platform catering to low-income consumers with very low prices, are criticized for unethical labor practices and poor working conditions
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Shein's Labor Controversies:
Several investigations have shed light on Shein's labor practices. A 2022 investigation by Public Eye, a Swiss NGO, found evidence of garment workers in Guangzhou, China, working excessive hours (up to 75 hours a week) with limited days off and receiving wages as low as $20 per day (often docked for mistakes). The report also documented unsafe working conditions in some factories. (Source: Public Eye: https://stories.publiceye.ch/en/shein/)
Shein's low prices come at a potential human cost. While the exact financial impact of these controversies on Shein remains unclear, the ethical implications raise concerns for conscious consumers.
In conclusion, the discourse on whether brands should be selective about their customer base delves deep into the intricate dynamics of brand-consumer relationships. While branding establishes identity and tone, marketing employs a multifaceted strategy integrating business goals, audience insights, and data analytics. The emergence of socially responsible consumerism underscores the significance of authentic brand values and ethical practices.
As we navigate this landscape, brands must strike a delicate balance between values alignment and economic realities. Despite growing consumer demand for ethically aligned brands, financial constraints may impact purchasing decisions. Moreover, brands must remain vigilant about the ethical implications of their operations, exemplified by controversies surrounding companies like Shein.
Conscious consumers, however, face a multitude of constraints beyond economic factors when striving to make ethically aligned purchasing decisions. Accessibility, limited information, affordability, time constraints, greenwashing, social pressures, limited options, and infrastructure challenges all contribute to the complexity of the decision-making process.
In essence, the relationship between brands and consumers is multifaceted and dynamic, shaped by an array of factors including brand identity, consumer values, economic considerations, and ethical practices. By understanding and navigating these complexities, brands can forge deeper connections with their audience, fostering long-term loyalty and success. Collaborative efforts among businesses, governments, and consumers are essential in addressing these constraints and creating a more sustainable and equitable marketplace.
In the end, it's like the age-old debate of whether to pick the pineapple off your pizza or embrace its tropical twist. So, what do you think: should companies be picky or not?
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