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Use The Power Of Your Wallet To Drive Change In The Business World

Companies hate having to take a stand, but they will if you force them to by withholding your money.

Use The Power Of Your Wallet To Drive Change In The Business World
[Photo: João Silas via Unsplash] [Photo: João Silas via Unsplash]

Consumer-led change is primed to become one of the most effective strategies in this moment for one simple reason: In a country where consumer spending accounts for nearly 70% of our nation’s gross domestic product, whether and where we choose to spend our hard-earned dollars matters to a company’s bottom line and to the broader health of our economy. We are all consumers, and that purchasing power represents huge untapped influence to encourage companies to do better.

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As we enter month three of Donald Trump’s presidency, people are finding a myriad of ways to make their voices heard, and that includes flexing the power of their wallets. Already, several consumer-driven efforts have led to some major changes. From the #DeleteUber campaign, which forced the company’s CEO Travis Kalanick to leave Trump’s business advisory council, to the #GrabYourWallet movement targeting several Trump family brands, it’s clear that when enough customers speak up and call for companies to take a stand, they listen.

Underlying these recent efforts are the changing attitudes toward the role of businesses and corporations in promoting social change. In a 2016 study of millennial consumers between the ages of 21 and 36, 8 out 10 people surveyed said they would like to see brands and businesses take a stand on issues they care about. And it’s not only millennials who want corporations to be a force for good: A different study from 2013 found that 9 out of 10 Americans said they want businesses they support to make a positive difference, and it also found that 88% of consumers would stop buying a company’s products if they believed it was engaging in irresponsible behavior. Assumptions by businesses about what consumers care about has led to a decades-long race to the bottom, but they are beginning to see how wrong they are. Businesses have been responding to these changing consumer attitudes, recognizing that in today’s environment, supporting social causes can build customer loyalty, drive sales, and burnish their brand.

[Photo: Flickr user Haydn Blackey]

These new expectations by consumers and companies alike create the unique potential for consumer activism to become both a carrot and a stick and to transform business as usual. Beyond boycotts, our shared purchasing power can also incentivize better practices and reward companies and brands that demonstrate they are aligned with our values. At its best, doing the right thing can be a win-win for both companies and consumers.

Take the example of paid family leave, a critical issue where the United States lags far behind other countries. A 2016 poll found that an overwhelming majority of American voters supported requiring companies to provide paid leave for new parents, yet despite this broad support, Congress has yet to advance this key policy issue on a legislative level. In response, consumers and advocates who care about paid leave have begun pressuring individual employers and corporations to change their policies, and some companies, like Netflix, are taking action.

While these campaigns have for the most part relied on symbolic petition gathering, it is now possible to imagine a situation where consumers who care about this issue show their support by rewarding the best actors financially and voting with their dollars to get others to catch up. Want Starbucks to extend paid leave to its hourly workers? Pledge to not buy your morning coffee there until they do, and even better, pledge to reward them with your dollars if and when they change their policy. The possibilities for social impact are vast when consumers begin to develop fluency in speaking up with our spending, which can then be applied to everything from encouraging your favorite neighborhood restaurant to support workers’ rights to convincing corporations to take action on climate change.

At a time when traditional sources of economic power like labor unions are declining and Congress is unlikely to pass progressive reforms, voting with our wallets is proving to be one of the most effective tools communities have for influencing decision-makers, and if recent efforts are any indication, more Americans are comfortable connecting our spending to our values in increasingly visible ways. Whether it’s boycotting companies who engage in practices contrary to those values or rewarding businesses who change the way they operate, active consumers are changing the math for CEOs and raising expectations for what it means to do business in today’s political economy. And from the success of #DeleteUber to #GrabYourWallet, so far it looks like the customer is always right.

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Eric Shih is the founder of Spendrise.