When is a boycott more than just PR? What makes it work?
Recent reports of a slowdown in SoulCycle’s business made me wonder about the staying power of customer boycotts. Why do most fade while others gain traction and even force change? If you missed it, famous SoulCycle fans were outraged when billionaire Stephen Ross, who owns both SoulCycle and Equinox, among other companies, hosted a high-dollar Hamptons fundraiser for Donald Trump on August 8th.
Led by Chrissy Teigen and other celebrities, Twitter erupted against the brands. Rival fitness companies lunged at the chance to pummel them. Crunch Gym launched a Summer Break-Up promotion, and some less luxe gyms ran snarky ads tweaking their tony, Instagram-ready image.
Like most brand-watchers, I expected the boycott to fizzle like a summer fling, but I was wrong, apparently. Data analytics company Earnest Research accessed SoulCycle’s August signups and compared them with those of a year ago. Even adjusted for a seasonal dip, SoulCycle showed a marked slump in class attendance. Average enrollment dropped a whopping 12.8 percent across all U.S. locations, compared with a “normal” five percent dip in August in a typical year. That’s unusual.
Well-organized corporate activism, like the 2017 campaign to pull sports and business events from North Carolina after its “bathroom bill,” can be very powerful. Backed by the NCAA and high-spending corporations, the bathroom bill boycott hit the state in its wallet, and it worked. But consumer boycotts are a dime a dozen today. Experts say most don’t hurt the bottom lines of the brands or companies targeted, and barely a quarter of boycotts result in desired change.
So, what makes the difference? Why is SoulCycle feeling the burn? It may be because it and Equinox are lifestyle brands. SoulCycle adherents in particular enjoy strong social bonds and bragging rights that were dampened by the Ross fundraiser coverage. Who wants to Instagram their workout now? Most importantly, both SoulCycle and Equinox convey their social responsibility in their marketing, with sponsorships and positioning that embrace diversity and LGBTQ rights. So, the behavior of their corporate owner can seem flabby and hypocritical to members.
That’s the risk, and the irony, of corporate social responsibility. If a brand spends to build a reputation as a social advocate, it stands to lose more than if it had never invested. According to Mary Hunter-Dowell and Brayden King, who studied activist targeting of major companies, “Building a strong reputation as a socially responsible firm creates certain expectations, making incongruent behavior more noticeable and damaging to the firm’s image.” That’s logical, and it’s why some brands approach any kind of advocacy with caution.
The study also shows that the key to a successful boycott – if success is defined as desired change – isn’t financial pressure. It’s – wait for it – negative media headlines. “The no. 1 predictor of what makes a boycott effective is how much media attention it creates, not how many people sign onto a petition or how many consumers it mobilizes,” notes King. The bad PR is typically most effective when it targets a high-profile company, because reputation damage is perceived as notably harmful over the long term.
The SoulCycle and Equinox boycotts may run out of steam as time passes. Yet the short-term success offers a lesson about social activism and PR. It’s about making it a story, and refreshing that story when the initial news cycle is over. To succeed, a social action must be orchestrated to create press coverage and social media noise above all. For major brands, reputation damage may be more important and more effective even than damage to the bottom line.