How To Measure Brand Value

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In the wake of George Floyd's murder and the resurgence of the Black Lives Matter movement, companies of all stripes rushed to release statements citing the need for "change" and "solidarity." A meaningful subset of those companies promised to review internal policies for racial bias, improve hiring practices, or make cash contributions to nonprofits at the forefront of the movement. Nike and Brand Jordan pledged $140 million to support Black communities, Quaker Oats retired Aunt Jemima, and television networks pulled the plug on the shows "Cops" and "Live PD."

But in the midst of all this activity there was also blowback and backlash. Peloton, after stating unequivocally that Black Lives Matter and pledging $500,000 to the NAACP Legal Defense Fund, found itself apologizing for the lack of diversity on its leadership team. Facebook, despite committing hundreds of millions to racial justice groups and Black businesses, found itself battling an internal and external revolt over its refusal to flag President Donald Trump's (and others') often false and misleading posts. And Starbucks stepped into it more than once, including flip-flopping on whether employees could wear Black Lives Matter shirts and pins to work.

These, and countless other examples — we're looking at you L'Oreal and Popeyes — point to what we have long known, namely that navigating the waters of social advocacy is far more difficult for brands than many want to acknowledge, and that the price of getting it wrong can be extreme. If you have any doubt about this, Google "Pepsi and Kendall Jenner." So let's take a step back and evaluate both why and how companies can better position themselves for critical social action.

Let's begin with the motivation — the "why." In short, the answer is because there is no alternative. Today's consumers, and Millennials and Gen Z specifically, expect companies to establish and advance clear stances on social or political issues. They are increasingly using the power of their pocketbook and social media feeds to shape corporate behavior. A 2018 survey from DoSomething found that 76% of respondents said they have purchased, or would consider purchasing, from a company to show support for the issues the company supports, and 67% had stopped purchasing, or would consider doing so, if a company stood for something that didn't align with their values. As to the "how," that's more complicated.

From our work in advocacy communications and collaboration with dozens of companies, we've had a front row seat to assess both what works and what fails. In the process, we developed the Brand Advocacy Map to help guide companies through potentially fraught cultural and social terrain. In its most basic form, our framework uses two axes to assess issue fluency (how credibly and authentically the company engages with a topic, on a spectrum from willfully ignorant to issue fluent) and depth of engagement (how deep the company engages with or invests, on a spectrum from scratching the surface to making structural investments).

When positively combined, being issue fluent and making structural investments lands companies in the "Living Their Values" quadrant of the framework, which in turn generates credibility and builds consumer confidence. When negatively combined, being willfully ignorant and scratching the surface without supportive investment lands companies in "Brand Purgatory." In the top left quadrant, "Owning their Position," we have companies who demonstrate issue fluency and engagement, but where structural investments are still missing. Conversely "Swing and a Miss" is assigned to companies that have made structural investments but have come out with the occasional willfully ignorant campaign or tactic.

Living Their Values

To make structural investment, a company must consistently dedicate time and resources into making change both externally and internally in a given issue area. A company cannot, for example, decide that it wants to invest in racial equity and expect to make structural change overnight. Rather, the company must first infuse equity into their internal operations, values, and mission before taking a public stand, lest they be accused of hypocrisy.

Next, the company must invest in the issue in a comprehensive manner, meaning going beyond making donations or running a one-time ad campaign. To be issue fluent, a company must communicate about the given issue area in a way that demonstrates the company understands the nuances of the issue and deeply cares about the topic. By definition, issuing a public statement now and then, trumpeting the value of diversity against an all-white backdrop, or expressing outrage while providing law enforcement with facial recognition tools that encourage racial profiling all fail the "Living Their Values" test.

When measured against this yardstick, companies like Netflix and Ben & Jerry's stick out as positive case studies, politics aside. Ben & Jerry's, for example, has a decades-long track record of speaking out about racial injustice, climate change, and refugee rights. Even though the company was founded by two white men, their board is a paragon of diversity, and their history of corporate advocacy goes beyond simply writing a check — its founders have been arrested for their social activism. These actions provide a buffer for the company from being labeled as hypocritical.

In addition, the company regularly blurs the lines between brand and activism with the release of specialty flavors, including "Justice ReMix'd," which launched with a monthlong ice cream bus tour in St. Louis to promote criminal justice reform and close a St. Louis jail. "Pecan Resist" was similarly created to protest Trump administration policies it described as "regressive and discriminatory." It should come as no surprise, then, that its statement in response to Mr. Floyd's murder was both forceful and widely lauded, even if it wasn't coupled with immediate additional actions. The company had a track record to build on — including a long history of high issue fluency demonstrated by its statements and visible action.

A more recent example of a company in the top right quadrant is Netflix. The organization has increased its commitment to equity and inclusion in the last two years. In 2018, Netflix hired a head of diversity and inclusion who launched new programs, such as Strong Black Lead, which supports Black Americans in lead roles. It has also increased its number of Black employees and Black leaders over the last three years. Most recently, Netflix announced that it would move $100 million of its investments to Black-owned banks. The idea came from an employee suggestion that was shared at a dinner among Netflix leaders from underrepresented groups. This was a powerful move that represented high issue fluency and structural change. Because Black-owned banks are historically underfunded, Netflix made a deep impact by investing the capital needed to service more loans and attract more investment capital. After the investment, shares of these lenders skyrocketed, proving it is more impactful to invest in Black-owned banks than to donate money to a charity or non-profit.

While Netflix doesn't have as long of a history of making structural change as Ben and Jerry's, it is a good example of a new entrant into the "Living Their Values" quadrant. Paypal and Gap are also in this quadrant because they had been making structural investments in racial equity previous to the George Floyd murder, and their responses to the recent Black Lives Matter protests were issue fluent. In 2013, Paypal established a working capital loan program with the goal of eliminating factors in credit assessment that were related to race, and recently pledged $530 million to support Black and minority-owned businesses. Gap created its "This Way Ahead" program in 2007 with the goal of closing the youth unemployment gap for low-income youth of color, and recently donated $250,000 to groups fighting racial inequality.

Owning Their Position

The same progress has not been made for entities like NASCAR or Twitter. Though both took powerful recent actions, including NASCAR banning Confederate flags from races and Twitter flagging President Trump's tweets, declaring Juneteenth a company holiday, and donating to the cause, neither brand has a similarly established record of social engagement. While they get credit for their response — for "Owning Their Position" — they still have work to do and credibility to establish if they want to move along the Brand Advocacy Map's X-axis.

While approaches at either end of the X or engagement axis can be both well-executed and beneficial, the Y or the issue fluency axis clearly distinguishes between the good and the bad. "Issue fluent" engagements capture the cultural zeitgeist exceptionally well and deftly align a brand with an issue(s), while "Willfuly Ignorant" engagements lack authenticity, credibility, and issue fluency. These are the efforts for which apologies often follow. But the distinction between a "Swing and a Miss" and "Brand Purgatory" are significant and worth pointing out.

Swing and a Miss

In the "Swing and a Miss" quadrant, let's return to the Starbucks example. This wasn't the company's first foray into social action or its first encounter with race as a topic — for better or worse. Its 2015 "Race Together" campaign, an effort to start an honest and productive conversation about race by printing "#RaceTogether" on its cups, backfired. Looking back, then-CEO Howard Schultz wrote that the campaign was "called tone-deaf and patronizing" and that Starbucks was accused of "overstepping acceptable bounds for a corporation, seizing upon a moment of national crisis to promote our brand, and preaching through the company megaphone." Compare that to its 2018 response to the inappropriate arrest of two Black men at a Philadelphia store. Not only did the company respond by closing more than 8,000 stores for racial bias training, but it pledged significant internal policy reform as well. While imperfect, it is clear that Starbucks is doing more than paying lip-service. The company is repeatedly engaging and trying to get it right — on this topic and others, including climate change and sustainability. We believe it has been rewarded for that engagement through customer loyalty.

Also in this "Swing and a Miss" quadrant are Sephora and Spotify, companies that have in the past invested in equity but whose recent efforts were willfully ignorant. Sephora created an option for customers to donate reward points to the National Black Justice Coalition. The initiative was criticized because the company stood to benefit from the move. Sephora could claim the tax write-off for the donation rather than customers claiming the tax benefit directly. Spotify participated in "Black Out Tuesday," a day of collective action encouraging people to disconnect from regular work and social media, to express solidarity with the Black Lives Matter movement. One of Spotify's Black Out Tuesday initiatives was substituting playlist logos with black squares. This tactic ended up sowing significant confusion. Across social media, everyone began posting black boxes to "mute" themselves for the day, which quashed all meaningful dialogue happening via the #BlackLivesMatter hashtag. The initiative was castigated by activists as a hollow and even detrimental distraction, and Spotify was blamed for being one of its most prominent promoters. Both Sephora and Spotify will likely bounce back from these missteps since they have built up advocacy credibility in the past.

Brand Purgatory

While these are but a few examples, they contrast with the many brands that engage once and then walk away or never engage in the first place. Taken together, a failure to engage, or engaging in a manner that is hypocritical, willfully ignorant, or lacks cultural competence, is a recipe for disaster. "Brand Purgatory" ensures that, at best, consumers build no deeper affinity for your brand, or at worst, abandon it out of disgust — neither being a particularly enviable outcome. And yet, companies find themselves in this position again and again, including dozens who bumbled their response to the Black Lives Matter movement and countless others who preceded them; for an example, Google "Volkswagen and flicking."

Companies Can Do Better
Regardless of their position on the map, companies must move beyond statements toward actually making change. While every company is unique in their needs, we believe all successful brand impact campaigns or reactions must include:

Ensuring your house is in order before going big on public actions. Your internal culture and diversity should match your external posture. If it doesn't — change starts there.
If your house is not in order, being humble is key. Acknowledge where there have been missteps and be transparent about your plan for change.
Understanding that public statements of support are not enough. Successful public statements admit where you have fallen short, share the actions you are planning — and implement those actions.
Investing in structural change. Acknowledge your role in perpetuating power structures and actively work to dismantle them.
Donating to those doing the work. While you strategize brand actions and commitments, fund those who have been on the ground working to uproot systemic injustice. However, companies cannot catapult themselves into the top-right or top-left quadrants by simply throwing money at an issue. In other words, companies cannot simply donate money and expect to be publicly rewarded. Instead they need to put time into the previous three actions as well.

These examples show clear patterns. Companies that blur the lines between their brand and their advocacy are doing so by engaging early, often, and in meaningful and lasting ways. They aren't passive, caught flat-footed, or merely reactive. They are consistently engaged. On the flip side, those that dip a toe in the water, ignore clear contradictions, and see no connection between what they say and do, expose themselves to ever more ridicule and backlash from consumers who are demanding more and more from the brands they support. Luckily there is a roadmap to help avoid that outcome.

In sum, consumer behavior demands that companies engage on social issues, but that any engagement must be coupled with issue and cultural fluency, a willingness to check for blind spots, and the ability to execute across marketing, communications, and public affairs. It's also work that never ends, whether for us at RALLY or companies like Ben & Jerry's.