• by Sarah Mahoney , Staff Writer @mahoney_sarah, October 2, 2008

Animal-rights activists. Environmentalists. Anti-gay religious groups. Marketers have never had so many well-educated - not to mention Internet-fortified - critics. But when consumers try to change a company, how well does it work?

The Humane Society of the United States found itself stymied. Despite years of letter-writing campaigns, political lobbying, and raising consumer awareness with the most graphic, vivid and just plain adorable images known to conservationists, it couldn't save Canada's baby seals. So in 2005, Wayne Pacelle, president of the 10.5 million-member group, found himself invoking the activist version of thermonuclear warfare: the boycott.

"But we did so very reluctantly because we believe it's a strategy that is so difficult to execute," says Pacelle. And even then, the organization used a tempered, controlled approach. "We deliberately did a targeted boycott - only Canadian seafood - and didn't go for something broader," he says, such as asking members to shun all Canadian goods, or scratch the country off their vacation plans.

Like a growing number of activists, Pacelle and his organization have become increasingly gun-shy about full-frontal boycotts. For one thing, the stakes are higher for everyone. Companies are more vulnerable because the Internet has provided activist groups with the means to discover and publicize every dirty secret, whether it's a Third World sweatshop or a simmering landfill. And activists live in the same world: Whistle-blowers are watching them more carefully, too. If a boycott fails to gain traction - perhaps because the member base is distracted by actions against too many companies - the organization comes across as wimpy, ineffective and toothless.

"Many groups decide it's better to try and make an impact on a company's reputation, rather than its business, and experiment with a whole arsenal of tactics," says Daniel Diermeier, Ph.D., a professor of managerial economics at Northwestern University's Kellogg School of Management, who has researched the economic impact of consumer boycotts.

It's hard to imagine how 19th-century Irish peasants, who are responsible for the coinage, would interpret such nuances. The B-word came into use in the 1870s in calorie-deprived County Mayo, when locals led by politician Charles Parnell banded together to shun English estate agent Capt. Charles Cunningham Boycott when he refused to lower rents. No one would look him in the eye, say hello, deliver his mail or pick his turnips. Life became so bad for Boycott that he caved and eventually fled back to England. Organizers of subsequent efforts, worried they could never teach the peasants to pronounce ostracization, went for the pithier boycott. The word soon became common in English and has been incorporated into French, Russian, Dutch, German and even (albeit in a slightly modified version) Japanese.

Pulling a Boycott

Things have become more complicated than a simple refusal to do business. Consider this tale of two rainforest organizations. Recently, the San Francisco-based Rainforest Action Network made headlines when its members, protesting forestry policies, got arrested for blocking shareholders from entering the annual meeting of Weyerhaeuser, one of the world's largest makers of wood products. RAN is known for playing hardball, and thrives on confrontations like this one. Even its home page is hard-core: Above the tagline, "Environmentalism with teeth," a prowling jaguar seems ready to eat a few hapless CEOs. But it's an extremely effective organization, too, best known for pressuring Home Depot to adopt in 1999 its now famous policy against selling old-growth wood, a move that quickly created a domino effect among many retailers.

Now take the Rainforest Alliance, which fills its Web pages with cute little Amazonian frogs and has a policy of working with businesses. "We would never attack a company," says Jennifer Bass, spokeswoman for the Washington, D.C.-based group. "We decided 20 years ago that it was much more radical to engage businesses." The group certifies farms and forests and, so far, claims more than 106 million acres of success. Recent coups include quietly bringing Chiquita on board. And Yuban coffee, a Kraft brand, is now made solely from Rainforest Alliance-certified coffee beans.

"There are plenty of people who are saying 'boycott bananas' or 'boycott timber,'" Bass says. "But that's just not realistic. There will always be demand for those products, and boycotts put people out of work. Our mission is to improve consumer demand for products that are grown in a responsible, sustainable manner. And as more companies recognize that many people want these goods, they are making these business decisions now - they're not waiting for boycotts."

Some groups have taken boycotting one step further along the consumer food chain, organizing protests by customers who have already purchased the product. Last year, the Natural Resources Defense Council enlisted Prius owners to pressure Toyota to support raising national fuel standards. While certainly not a boycott - after all, these people had already paid for their cars - more than 100,000 were motivated to e-mail Toyota and protest.

That's not to say boycotts can't work. Some groups, like PETA, with its lengthy boycott résumé, are especially skilled at using them to make headlines. And on other side of the fence, some companies are adept at ticking off activist groups, purposely courting headlines that can increase sales. Having so many adults beat up on Abercrombie & Fitch, for example, has certainly enhanced its appeal to defiant teens. American Apparel delights in playing to the socially responsible activists on the one hand (all its clothes are made in downtown Los Angeles) and outraging feminists on the other, using ads that border on porn. And despite massive calls by some Christian groups to boycott the 2006 The DaVinci Code, the controversy helped propel the film to box-office-smash status: It grossed $217.5 million in the United States and an amazing $540.7 million overseas.

The ingredients necessary for a successful boycott don't come along every day. For one thing, consumers aren't very good at saying no to products they like or need. "If someone takes a drug, for example, getting them to boycott Merck will be tough," says Diermeier. "And efforts to boycott Disney have failed. No one wants to tell their 5-year-old he can't see Finding Nemo just because Disney also owns Miramax, which makes Quentin Tarantino films."

"The problem with any boycott is that there is always an incentive to cheat," adds Timothy C. Haab, professor of agricultural, environmental and development economics at Ohio State University. Take a recent proposed boycott of ExxonMobil by truck drivers in protest of diesel prices. "Even if the group is effective in driving prices down, the individual has an incentive to defect, and gain for yourself."

That's why the most effective boycotts are those that make it fairly painless, with cheap substitutes, for consumers to switch to. (It's worth noting that despite many groups' attempts to start boycotts against Wal-Mart, for example, it continues to be the largest company in the world - it isn't easy to convince people to shop at places that will cost them more, Haab says.)

Outrage is also useful, adds Diermeier, whether the cause is animal rights, toxic toys or downtrodden workers. And the Internet has increased the access consumer groups have to potentially offensive corporate behavior, and also amplified the ability to let others know about abuses. "These days, it's much more difficult for companies to get away with something," he says.

The most successful efforts, Diermeier says, don't always target the most egregious offenders, but the most vulnerable. When Greenpeace called for a Shell Oil boycott in the mid-1990s, for example, members of the activist group targeted an outdated oil facility in the North Sea. While Shell UK was the responsible party, the group protested Shell Germany, "where global environmentalism has wide appeal and recycling is a national passion. The fact that the targeted business unit may have nothing to do with the practice - indeed, may not even know about it - makes it much more difficult to anticipate and prepare for proactive boycotts," he says.

Winner Take All

But perhaps the biggest risk in boycotts is losing, which can create massive image problems. For companies, there's little upside to admitting that they're caving under pressure. "Companies don't have an incentive to look like they collaborated," says Diermeier. "That can make them seem weak to other constituents, including employees and shareholders." And when organizations allow boycotts to drag on for years with little sign of progress, they risk losing credibility.

That's why grasping at that perception of a win is vital. Take the Tupelo, Miss.-based American Family Association, which recently declared itself victorious in its two-year boycott of Ford Motor Co. It argued that Ford, with its same-sex partner benefits and marketing programs aimed at the gay, lesbian and transgender market, promoted homosexuality. It gathered about 780,000 signatures on its "Boycott Ford" petition.

In March, the AFA declared itself the victor, and said Ford had met all its conditions, including to stop buying advertising in any gay media, except for a $100,000 Volvo allowance. What's more, its press release pointed out that Ford's sales had fallen an average of 8 percent a month during the 24-month effort. (AFA declined further comment, and Ford did not return phone calls. The Gay & Lesbian Alliance Against Defamation, which has received sponsorship support from Ford in the past and is specifically named in AFA's boycott materials, also declined comment.)

Ford already had its hands full dealing with billion-dollar losses, plummeting consumer satisfaction, and the need to jettison such divisions as Jaguar and Land Rover, and possibly Volvo. Despite the press release to the contrary from Tupelo, no reasonable person would be likely to credit the AFA for all of Ford's spectacular business failures. The boycott wasn't painless, however, reportedly hurting dealer groups in the rural South. And Ford has probably lost credibility with both gays and Christians.

"It's just a no-win situation," says Diermeier. On the one hand, few marketers can afford to alienate the
15 million gay, bisexual, lesbian or transgendered in the United States, about 6.7 percent of the population. Many are extremely affluent and influential, and together they represent about $723 billion in buying power, reports Witeck-Combs Communications. On the other hand, who can afford to tick off the Christian right? While estimates of the size of that group vary, some pollsters believe as many as 15 to 18 percent of Americans fall into that category. "Any public comment just drags the company into a political battle that is bound to offend or upset one or both sides," Diermeier says.

In planning his effort to save the seals, Pacelle was careful to make sure the Humane Society emerged with some kind of measurable win. Research worked in his favor: Polls have shown that about 79 percent of Americans and 80 percent of Europeans think the seal hunt should be illegal. Even 70 percent of Canadians are opposed to the commercial hunt, not including the right of native Inuits to continue sealing. "We were confident that any additional exposure is going to work in our favor," he says.

And it has. Three years into the boycott, the group has generated widespread support. More than 3,500 restaurants and grocery stores have pledged to boycott Canadian seafood, including Whole Foods Market, Legal Sea Foods and Trader Joe's. Holdouts, including Red Lobster, have had to endure plenty of protests as a result. Last year, the U.S. House of Representatives unanimously passed a resolution calling for an end to the hunt. And recently, the European Union indicated it might ban seal imports entirely, which just might be the death knell for sealing: To ship furs to Asian markets, sealers need to use European ports.

"The hunt isn't just inhumane," Pacelle says. "It's archaic. It's hurting Canada's image, and it represents the old economy. We just hope we can be a catalyst." After 150 years, the means of coercion have become more sophisticated, but they're still something those Irish peasants would understand.