Price and prejudice

There is a thing in business called goodwill. Accountants will tell you goodwill is defined as the established reputation of a business regarded as a quantifiable asset and calculated as part of its value when it is sold.

Recently, several businesses have paid a heavy price for being associated with or in some way tied to racism or various forms of prejudice. As the world comes to terms with the past, the present and re-imagines the future, businesses have found themselves – sometimes wittingly, sometimes unwittingly – at the centre of the ongoing discussion.

To wit, one company was forced to fire an employee who made vile racist remarks after the general election. A merchant group imposed a boycott, though later lifted it. Another company trended on Twitter for all the wrong reasons after posting an inappropriate Emancipation Day message. One retailer was forced to apologise, another faced a backlash – both because their owners expressed denigrating, insensitive or belittling views in public.

All of this has been amplified by the prevalence – nay, dominance – of websites and applications that enable users to create and share content or to participate in social networking. Each issue involved a post, a picture or some inappropriate hashtag.

In fact, some might say it is social media that has made these controversies possible, even if we have good reason to believe social media has merely given us a clearer view of issues that have long been bubbling under the surface. So instead of shooting the messenger, business would do well to understand two things.

Firstly, they need to adapt their managerial mindsets and to acknowledge that we are not simply living through strange, frenetic times. No, what all of these controversies point to is the failure of businesses to appreciate that goodwill is real. It has value. And that value can evaporate in the blink of an eye because of insensitivity.

Secondly, now more than ever businesses need to be attuned to the needs of customers. This is not rocket science. In fact, notwithstanding the “newness” of all of this, it all underlines an age-old principle: the customer is always right.

It is because customers come from diverse backgrounds, it is because customers make purchasing decisions not only due to the product but also the context, it is because customers understand how commerce exists within a healthy democracy with respect for the fundamental rights and freedoms of all, it is because of all of these things that a business must take particular care to ensure it is on the right side of history.

Instead of viewing all of these dynamics as a minefield to overcome, business should, in fact, embrace them as an opportunity to refine practices relating to marketing and communications, as well as approaches to the social context in which it exists.

There is a healthy debate going on, as we have seen by the different views on the extent to which a company should pay. Whatever the case, companies literally cannot afford not to be a part of it.