Do Boycotts Actually Work? Yes, but There’s a Right Way … And a Wrong Way

Advocates of government regulation of business frequently represent corporations as holding too much power. They have lots of money, and if their product is good, many loyal customers continue to feed their operations regardless of any moral or ethical violations.

Such people usually take a pessimistic view of the ability of consumers to regulate business via the threat of withholding their money. The implication is that people care more about low prices and convenience than they do about social causes, and that, therefore, businesses can get away with murder.

There is a certain amount of truth to this, in that in most cases, the cause du jour is only important to a small but vocal minority, while the rest of us are happy to continue shopping at our favorite stores. But if we don’t care enough about an issue to shop elsewhere, why should we care enough to impose government sanctions, paid for by all of our tax dollars whether we approve of the regulation or not?

But let’s not be too hasty to dismiss the power of the boycott. Companies have shareholders to answer to, and bad publicity coupled with declining sales never sits well with stockholders whose chief concern is profit. This is far from a theoretical argument; there are plenty of examples of effective boycotts.

The most prominent example from this year is the boycott of Target for its announcement that transgendered shoppers are permitted to use any bathroom they choose. Social conservatives fear that this opens the door to predatory behavior and decided to withhold their business in protest of the policy.

The boycott has had a significant effect on business, reducing sales by 7.2 percent and costing the company $20 million. While Target has yet to reverse its transgender policy, the company has responded by installing larger bathrooms with more privacy in an effort to appease critics, proving that the boycott is working, at least to an extent.

Target is far from the only example. After Mozilla CEO Brendan Eich donated to a campaign to protect traditional marriage, a large Internet backlash resulted in his being removed from his position.

Similarly, the blogger and professional liar known as Food Babe succeeded in whipping up enough ill-informed outrage about an ingredient called carrageenan to convince a major producer of natural foods to stop using it.

There’s a lesson here that it matters what the customer base of a company looks like. Target is suffering because a large number of its customers hold traditional values. Mozilla primarily serves younger, more progressive users. And while companies that rely on the left-leaning, nutrition-focused demographic have to worry about bad publicity, other companies with more conservative customers were immune to the criticism about food additives.

The most striking example of this comes from addictive chicken purveyors Chick-fil-A, which drew outrage for a statement opposing gay marriage. But Chick-fil-A is located in primarily in the South and one of the few places that still closes on Sundays. Far from condemning the restaurant, the majority of Chick-fil-A’s customers redoubled their support, and the company actually saw an increase in sales as a result of the boycott.

The moral of the story is that boycotts work, but you have to know your target. You can’t get Whole Foods customers to boycott by claiming the company employs illegal immigrants, and you can’t get Cracker Barrel customers to boycott over the use of GMOs. It has to be something the existing customer base already cares about.

Consumers have a lot of power to influence corporate behavior if they are willing to use it. It’s worth remembering that no company, however large, can make you buy something you don’t want. And once people stop wanting their products, they will be forced to change or else face the prospect of bankruptcy. (For more from the author of “Do Boycotts Actually Work? Yes, but There’s a Right Way … And a Wrong Way” please click HERE)

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