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July 29, 2020

How do boycotts impact customer satisfaction? The answer might surprise you

David Vanamburg

Not too long ago, we were discussing how everything in our lives feels like it’s politicized. At the time, we were talking about satisfaction in federal government services. This time, the topic is different: Boycotts.

The recent call to boycott Goya Foods after the CEO’s public endorsement of President Trump has people on both ends of the political spectrum picking sides. But, while this latest call for action will likely have ramifications, what will those effects be? How do boycotts impact customer satisfaction?

We decided to look at the data and see for ourselves.

Calls for boycott vs. customer satisfaction scores

We looked at several high-profile calls for boycotting in recent years and examined the subsequent customer satisfaction scores for the companies involved.

Take Nike, for example. In 2018, the company named Colin Kaepernick one of the faces of its “Just Do It” campaign to commemorate the slogan’s 30th anniversary. While many responded to this decision by burning their Nike apparel and calling for a boycott, the company’s ACSI score climbed 5% to 81 – a near record high for the brand.

The same thing happened to Home Depot. Last year when shoppers railed against the company after cofounder Bernie Marcus said he planned to donate to President Trump’s reelection campaign, Home Depot’s ACSI score didn’t drop. It climbed 2.6% to an ACSI score of 78 – the only specialty retailer to improve considerably.

Despite repeated controversies from founder John Schnatter, Papa John’s managed to weather the storm from a customer satisfaction perspective, holding steady between 2018 and 2019 with an ACSI score of 80. At the time, Papa John’s remained tied for the lead in the pizza segment.

A public outcry to boycott a company might seem like it would have an adverse effect on customer satisfaction. But that hasn’t been the case. Yet, even if it were, it’s not something that would be reflected in ACSI measurements.

Why boycotts have no bearing on ACSI scores

The reason is boycotts aren’t factored into ACSI scores isn’t complicated: ACSI only measures consumers who purchase a service or product; it’s not interested in those who don’t.

ACSI scores reflect customers’ personal experience with the products, level of quality and service, and overall experience these companies provide, not the emotional reaction associated with customers’ opinions on the political or social perspectives of the company’s leaders or spokespeople.

For instance, during the #BoycottHomeDepot movement, the company improved in nearly every customer experience benchmark, including layout, store speed, variety, courtesy, discount, and inventory. Nike’s biggest issue – from an ACSI standpoint – at the time of the Kaepernick situation was pricing. The company ranked worst in class for value.

In both cases, ACSI scores were directly tied to the quality and value of services and products being experienced, not the feelings of individuals who didn’t use the services and goods for social reasons.

However, while boycotts might not be reflected in ACSI scores, companies can feel the effects just the same.

Brand reputation and the bottom line

Nike’s position turned out to be fruitful for the company’s bottom line. According to data from Edison Trends, online sales jumped 31% in the immediate period following the Kaepernick announcement.

With Home Depot, any potential boycott that may have occurred had seemingly no effect on the company’s revenue.

On the other hand, Papa John’s experienced the opposite. In July 2019, same-store sales fell 10.5% in North America. On the earnings call, executives blamed Schnatter’s controversial comments, and CEO Steve Richie noted that the company needed to move away from a “founder-centric marketing plan.”

Customer satisfaction might not be impacted by social stance, but an organization’s revenue, loyalty, and public perception certainly can be.

What’s important to your customer?

Boycotts don’t negatively impact customer satisfaction; customer-facing elements like product quality, variety, store speed, mobile app reliability, and customer service do. But that doesn’t mean companies can afford to look past calls for boycotts, either.

Organizations must keep customers top of mind — what they want from a product or service, and their expectations for the social positions of companies they buy from.

Both areas influence company reputation, both play a role in public perception, and both can impact whether a customer buys from a brand in the future.

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