consumer boycotts

Here's When Consumer Boycotts Actually Trigger Change

consumer boycotts
Demonstrators protest the BP oil spill, June 4, 2010.

It might sound like a cop out, but the answer is truly both "yes" and "no."

The difference between the ones that led to company change and the ones that might as well have not happened lies within the boycott's actual intent...

What Makes Consumer Boycotts Work

If the aim of a consumer boycott is to hurt a company's bottom line, then they rarely succeed.

Take the 2010 protests in response to the massive BP Plc. (NYSE: BP) oil spill. ABC News and CNN, among myriad other media outlets, reported that millions of people were suddenly vowing not to fill up their gas tanks at BP stations after the disaster in the Gulf of Mexico.

Yet, even if some folks really did follow through on this promise, the protests hardly put a dent in the oil leviathan's pocket. While the company reported a loss of $17.15 billion for the quarter in which the oil spill occurred, BP swung to a profit of $5 billion the quarter that followed.

However, British Petroleum did suffer from the protests in another way...

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It spent $90 million trying to clean up its public image. And it cost one top BP exec his job...

You see, BP CEO Tony Hayward botched attempts at damage control in the wake of the spill by claiming the accident was not the company's fault but the contractor's. And in May 2010, he even stated that the amount of oil leaked into the Gulf of Mexico was "tiny" compared to all that seawater.

consumer boycotts

BP's reputation suffered immensely because the boycotters redirected their attention from protesting the company to protesting Hayward's every misstep (and there were several) instead. They made memes and various social media posts pillorying BP's then CEO.

In fact, Hayward found himself so thoroughly vilified that in May 2010, following his formal termination from the company, he told the media that he "would like his life back."

Hayward's downfall was made possible thanks especially to social media and the rise of the Internet consumer boycott, which the American public has seen play out recently with similarly devastating effects...

Consumer Boycotts Are Most Effective on Social Media

The power and speed of social media has allowed consumer boycott campaigns to evolve in recent years. A vastly freer, wealthier, and better informed world is putting new pressures on businesses to take a political stand.

And not responding to mass consumer protest isn't an option, either.

Case in point: the recent #DeleteUber boycott campaign on Twitter Inc. (NYSE: TWTR) that began on Jan. 28.

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Twitter and Facebook Inc. (Nasdaq: FB) users flooded social media that day, spurred by claims that Uber had broken a taxi drivers' strike in New York City and to express their broader dissatisfaction about the firm's connections to President Donald Trump.

The real aim of this particular social media boycott was to punish the ride-hailing company for placing profit over community after Trump's travel ban was instated on Jan. 27.

consumer boycotts

The boycott worked.

By Monday, Jan. 31, Uber rival Lyft surpassed the company in daily downloads on the App Store for the first time ever, according to a report from Mobil Action that day.

Then, on Feb. 2, as the barrage of social media criticism continued heavily into its sixth day, Uber CEO Travis Kalanick resigned from his position on Trump's advisory council.

While the Internet protest did not, of course, reverse the POTUS' executive order, it did prompt Uber to make some massive changes in order to maintain a positive image in the public's critical eye.

Up Next

Money Morning Chief Investment Strategist Keith Fitz-Gerald has over three decades' worth of experience analyzing how consumer emotion drives the markets to all-time highs and to devastating lows.

And there's one tough-love lesson he's happy to impart to Money Morning readers...

"That every investor needs to own Wall Street's most dangerous stock at least once in their investing lifetime," he says.

Here's Fitz-Gerald's surprising reason why - and how much you can profit from it...

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