The number of international brands suspending operations in Russia, moving to divest assets or provide donations or special offers to people affected by the humanitarian crisis in Ukraine continues to grow. These swift actions are part of a trend in recent years that’s seen more companies willing to take a public stand on a cause that’s important to their employees, customers, investors, or other stakeholders.

Two recent polls show broad US consumer support for taking commercial action against Russia. Morning Consult says its survey from February 26-27 shows many US adults (75 percent) support brands cutting business ties with Russia and/or stopping sales of products and services in Russia. Similarly, a Reuters/Ipsos poll from March 3-4 shows 80 percent say the US should stop buying Russian oil exports.

Yet how do consumers in general respond to these relatively new forms of corporate activism?
Findings from our past research into consumer preferences globally can give an idea of how corporate initiatives related to social and political causes might influence purchases. Ultimately, companies, apart from adapting to sanctions imposed by their governments, have to decide whether and, if so, how to take a stand on the current crisis in words and deeds. Any action—or inaction—can impact corporate reputation.

Insights for What’s Ahead: Factors affecting consumer willingness to switch brands

Consumer views on a brand’s stance can differ by geographies. Our consumer survey in 64 global markets in 2019 shows that many consumers have moved to a brand that supports a social cause that they believe in. Yet there are wide geographic differences, ranging from 85 percent in Vietnam to 48 percent among US consumers and 29 percent in Russia (see chart above).

At the same time, the share of consumers who abandoned a brand because of its support for a social cause they disagreed with tends to be smaller. These findings suggest that consumers are more likely to express their sentiments by deliberately buying from brands taking a stance that aligns with their own instead of boycotting brands taking a stance on a social issue that they disagree with.

Consumer views can also differ by issues. In research conducted with The Harris Poll in September 2021, we asked US consumers to what degree certain corporate actions, including support of democratic values and philanthropic initiatives, would influence the brands they buy. Over half (58 percent) said that a brand’s “support for democracy, voting rights, free speech and press” would “very much” or “quite a bit” influence their purchasing decisions in a positive way. And 51 percent would be swayed by a brand’s “corporate philanthropy, support of historically disadvantaged communities”.

Our findings suggest that consumers’ purchasing preferences can be impacted positively by corporate action on issues, yet not all issues are equal. For example, US consumers are more likely to buy a brand that provides information on its efforts around fair pricing or labor conditions than on climate change.

Communications and longer-term planning are crucial to protecting reputation

By ceasing business with Russian entities, companies are reacting to their employees, customers, sports fans, investors, and other stakeholders who are focused on the humanitarian crisis. Companies want to disassociate to prevent potential reputational damage.

Yet actions taken under time pressure during any crisis can have long-term implications for reputation and for ongoing management because of the precedent they may set. Here are six recommendations to help you and your company define, communicate, and measure corporate responses to pressing current issues:

1. Adopt a decision framework to respond to a cause. Deciding whether and how to respond to current events, including crises, is much easier with a general playbook for the process and decision criteria. The Conference Board’s Choosing Wisely report adapted here, lays out such a framework with a playbook for communicating the decisions, including to people that may disagree with the company action.
2. Preempt perceptions of inconsistency or mere virtue signaling. Keep in mind that any action can set a precedent and consider what other current or future situations might be similar (or will be perceived that way) and how the company might react—or not react—to them. Try to be consistent in your decisions on how to respond to preempt potential claims by stakeholders of perceived hypocrisy or inauthenticity.
3. Communicate promptly and continuously. Things move fast during a crisis, so communications teams need to be ready to communicate quickly and on an ongoing basis to their various stakeholders—employees, customers, investors, and the community at large—to explain actions taken, ideally tying them to the core business, company values, and brand DNA. Even if the communications channels, format, and frequency may vary by audience, the messaging needs to be consistent.
4. Be specific about commitments. This step helps companies set the right expectations. Consider how some mobile services providers are offering free calls to and from the Ukraine during the crisis for a specific period (even if they might see a need to change in response to developments). This can help to preempt disappointment due to ambiguity.
5. Have a long-term plan. Even actions decided under time pressure need to be thought through as much as possible in terms of long-term implications. You may want to consider potential alternative “exit plans” which, depending on the uncertainty of the situation, could be communicated upfront in parts or in full.
6. Measure impact. Keeping track of the perceptions of employees, customers, investors, and other stakeholders to corporate actions is typically an underleveraged piece of the process. It can be so valuable for learning how corporate reputation is built and maintained. Perceptions can be tracked via pre/post-action surveys, social media listening, job applications and other data-based analyses that relate to company investments in a cause.