CEOs behaving badly put customers off

There have been many cautionary tales of businesses hitting the headlines for either bad behaviour in company culture or controversial opinions from the CEO or C-suite.

However, new research has now drawn a direct line between this and consumer buying habits. 

The data was collated by business title, Raconteur and consumer research platform, Attest. It found that 49% of those interviewed would “feel uncomfortable” buying a product or a service from a business whose CEO or founder had expressed a view or acted in a way that they disagreed with. 

The findings reveal that buying is emotive; that business leaders do not exist in a vacuum and that, in an increasingly polarised and turbulent world, consumers want to make a statement with where they spend their money.

Cautionary tales

The researchers reveal that if a customer disagrees with what a CEO does or says, the majority (92%) will take action. Of these, nearly half (48%) will stop buying from the company as much and 44% will stop completely. It is a mere 7.6% who will not change their buying habits. 

Brewdog is one of the most pertinent cautionary tales. The brand quickly won disciples with its punk vibe and ‘bad boy of brewing’ image. However, the mask quickly slipped with rumours of a toxic culture. As well as a saga when a marketing ploy promising solid gold beer cans went wrong, stories emerged suggesting that the brand was not living up to its B-Corp status (which it has since lost). 

In a 2021 letter, employees complained of being exposed to a “toxic culture” and “cult of personality”, and the BBC reported that staff had levelled accusations of “inappropriate behaviour and abuse of power” at co-founder James Watt. 

However, even Watt’s departure wasn’t enough to save the business, nor was going into administration enough of a wakeup call for the management. There have since been recriminations about the way employees were told that their jobs were being axed and even accusations of a firing and rehiring spree.

Trust and belief

Brewdog’s demise is a prime example of a business which did not match the expectations that its persona had promised. Instead of a disruptor that would rock a traditionally corporate industry, customers stopped trusting the brand’s core values and didn’t want to support it.

It is also a venture, much like Tesla, whose founder’s behaviour is so divisive that it impacts sales. Elon Musk’s tirades on X, his behaviour in public (remember that salute?) and his well-reported, nefarious treatment of employees across all of his ventures have frequently caused Tesla’s shares to tumble and sales to drop. 

The lesson to take away for all business owners is that if they create a persona online – for example, are a frequent poster on social media – they need to make sure that their views and actions are not going to alienate their customers. 

In a world where some topics are deeply divisive, businesses need to think hard about what to share and how it will land.

Brand identity and consumer identity

As Ranconteur states, this is another example in which “…the line between corporate reputation and personal conduct is blurring”. People want to shop with brands which align with their beliefs and views. They want to feel good about where they shop. 

It is also two-way, as brand choice says a lot to other people about that consumer’s views. The Raconteur research found that 80% of consumers say that their own identity absolutely influences which brands they choose. Customers know that their brand choice shows more than just what they like but also what they believe in. 

For founders, this is an impetus to really get to know their customers and what is important to them. A brand that builds trust is more likely to keep loyalty, even in the face of fierce competition. But trust is really easy to lose, and even multinationals like Tesla have faced consequences when they didn’t manage to get their founder away from his keyboard.