How Donald Trump’s inflammatory words may cost him
Ever since Donald Trump made his anti-immigrant tirade during his 2016 presidential bid announcement, he's lost partnerships with many large companies including Univision, NBC Universal and Macy's.
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While the strategy may have given him a bump in political popularity—he trails only front runner Jeb Bush in the latest CNN/ORC national poll of GOP presidential hopefuls—several public relations and brand strategists believe the statements will severely affect Trump's businesses and personal brand, with one industry insider, who asked to remain anonymous, saying it was "the equivalent of professional suicide."
"For businesses and brands, it's one thing to be associated with a divisive and disrespectful force that you don't as a company believe in, but when you combine that with moronic behavior it's a double whammy," said Lenny Stern, former political consultant and partner at agency SS+K. "It's the idiocy of his statements and how he's handled it."
Trump did not immediately respond to a request by CNBC.com for comment.
According to his Q Score—a industry standard measurement of the public's familiarity and reaction to a brand—Trump has always had a low positive score, meaning the majority of people sampled enjoy criticizing him.
But Henry Schafer, executive vice president at Q Scores Company, explained that it doesn't necessarily lead to bad business. When one trends negative in the public, they can build a successful brand out of upsetting and inflammatory stunts. For example, he pointed out that the Kardashian women also tend to have low Q scores despite the fact that Kim has been estimated to be worth $52.5 million, according to Forbes.
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What's more, Trump's strategy of being the man people bond together over due to collective contempt seems to have worked in the past, if you believe the self-reported fact that his net worth is $8.7 billion.
"They create the love-to-hate relationship," Schafer said.
At this point, it is virtually impossible to estimate exactly how much in dollars these lost business relationships will cost Trump. And even with this modus operandi, there is such a thing as going too far, said Stern, whose company worked on the Obama/Biden 2012 campaign.
"It's served him well in his personal endeavors and business," Stern said. "But what we find is that brands, politicians and businesses can quickly go off the deep end."
Stern explained while Trump will always have his core political supporters, the problem is the business world is looking to expand to emerging markets and millennials. Unlike the generations before them, these demographics are more likely to consider company ethics when purchasing a product, not just the quality of the item.
"One hundred percent you can be associated with a politician with strong views but be a non-political business," he said. "You can avoid taking sides on political issues… But if you are proactively associating yourself with someone who is crossing over from strong points of view to disrespect, businesses can no longer afford to associate themselves with those types of partners if they are going to want to be taken seriously by those audiences."
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It's also giving brands a free marketing vehicle to emphasize their commitment to social responsibility, said Alfredo Muccino, chief creative officer at branding marketing consultants Liquid Agency.
Muccino explained while Trump always made his political stances clear throughout working with Univision, before he made these statements there was some business value to aligning itself with "a smart businessman who had character and some entertainment value." But when Trump emphatically stated he was not in line with the core values of Univision's audience, it was clear they needed to protect their reputation and cut him.
Severing partnerships with Trump can become a tool for consumer brands to cement their corporate reputation, especially if his business wasn't worth that much to them anyway, Muccino added.
"Think about it this way about Macy's dropping him," he said. "People don't think you're going to be a better businessman for buying his shirt or tie. You're certainly not going to be a fashion maven. They might as well have been selling his hair products."
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Not to mention the fact that Trump has several businesses in areas with a large Hispanic population, like Miami. While it isn't clear if many people will move out of properties he owns, Muccino said it may curb future profits with less people wanting to move into his buildings or stay at his hotels.
SS+K's Stern said it's also likely to make companies less inclined to want to book golf outings at his courses, lest they be tarnished by his antagonistic reputation.
Ken Ungar, president of advisory group U/S Sports Advisors who previously worked in Indiana politics, added that unless he begins to work on repairing his image and apologizing, it's highly unlikely that many other companies will want to align themselves with what he called Trump's "toxic" brand, which will severely limit his future business potential. The public tends to be forgiving, but it takes time, he explained.
"That process can takes months and even years," he said. "It really depends on what he does and goes about it. That will be the key issue if he recovers."
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Ungar added that the problem is Trump is in the middle of a political campaign, where backtracking on statements can be seen as being flaky. So while an apology now may save his business, it may hurt his presidential ambitions.
But the anti-immigration strategy might not be the smartest political move either. While the primaries are all about tapping into small, niche support, Ungar said for the general election Trump is going to need to appeal to the mainstream—which means getting votes from a lot of people he's alienating right now. Most people, from President Barack Obama to George W. Bush, run on messages of hope, which is completely opposite from Trump's personality, said Ungar.
Q Scores' Schafer said the problem is while you can build a career on negative Q scores, when you switch personas and try to become positive (or vice versa), it almost always leads to pulling away from that celebrity, similar to what happened to Justin Bieber.
"It will be interesting to see him come from a combative brand to an aspirational Trump brand," Ungar said. "For the general election, he's going to have to pivot back to the audience that serves consumer brands."
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