As corporations lean left, they risk tipping over

We’ve already covered the recent news of some companies cutting ties with the NRA and others, like Dick’s Sporting Goods and Walmart, implementing their own form of gun control based on minimum age rules. Does that seem risky from a business perspective? Ross Douthat penned an interesting article on “woke capitalism” recently which contained some useful, cautionary tales on that subject. Now we’re hearing from the other side of the aisle. Josh Barro at Business Insider makes the argument that having corporations lean to the left in their public-facing policies is actually a smart move.

Why? Mostly because they’re keeping an eye on their target market demographics and the customers they most want to attract are decidedly more liberal and anti-Trump. So if that’s the case, why wouldn’t they?

Think about who companies most want to advertise to: people who have a lot of disposable income and aren’t too old. This advertiser preference is why television ratings are reported in terms of adults 25 to 54 (or sometimes even 18 to 49) and it’s why networks like Bravo tout their unusually upscale viewer base to potential advertisers.

Appealing to senior citizens is a good way to win an election, but it’s not a good way to sell most consumer products and services.

Meanwhile, in recent decades, American politics has become much more polarized by age than it used to be, and much less polarized by income than it used to be. Affluent people are not (yet) a Democratic-leaning demographic, but they’re not the strongly Republican-leaning demographic they were 30 years ago. And young people report strongly liberal attitudes on social issues and strong opposition to President Donald Trump.

If you were looking at this question from the perspective of a high school math teacher, I suppose it makes sense to some degree. You want to select offerings which cater to those most likely to buy from you. But that traditionally applies to the products and services themselves. You aren’t going to sell a lot of surfboards to retirement home residents, nor will you do as well pushing denture cream to millennials.

But that’s not what the gun policy debate is built upon. When you decide to drop a particular model of firearm or raise the minimum purchase age in response to demands from Democrats and liberal organizations, you’re not really making a significant change to your offerings. You’re making an obvious and biased political statement. Historically, this is bad news for the company’s bottom line.

Barro is basing his argument on the premise that younger consumers tend to skew more to the left in significant numbers. While that’s actually a regional phenomenon which national brands need to handle at the local level, overall it’s a fairly accurate statement. But how heavy is the tilt? Let’s say it’s as warped as 70/30 liberal (which is preposterous). So as a corporation, you’ve now dropped yourself in the middle of a political fight, putting all your chips on blue. That leaves one very pertinent question which every business has to face unanswered:

Can any company really afford to lose 30% of their traffic in a competitive climate?

If you have to think about that one for more than two seconds you’ve never operated a business. This is the same problem that plagues Hollywood every time they invest heavily in a tilted political screed like Miss Sloane. You immediately tick off the portion of your potential pool of consumers who take the other position. Barro is treating this proposition as an either/or decision. The company either tilts left or it tilts right. That’s a false choice. The third, and by far more preferable option is to not tilt at all. Ignore the tempting bait of the 24-hour news cycle and focus on providing the best goods and services possible which might appeal to everyone.

Dick’s Sporting Goods may have just sent a positive, uplifting message to the most liberal wing of the “woke” public. But they also just angered a lot of potential customers as well. People on the left who weren’t already in the market for the types of products Dick’s sells aren’t suddenly going to start rushing in there to purchase camping equipment. But conservatives who do buy such things may be thinking of going down the road and doing their shopping elsewhere.