The age of transparency is upon us. Consumers have access to just about every bit of information out there. More than that, consumers want access and demand influence in business and policy.
It is more important than ever that businesses not just say the right thing or appear to do the right thing but actually do the right thing. It can seem risky for a company to alter business practices or offer transparency, but it’s increasingly riskier not to conduct honest business practices and let everyone know you are doing so.
As young professionals and consumers, we seek out companies that are honest in their communications and business strategy. And we are not the only ones doing so.
For all their suggested faults, Millennials are doing some good for the economy and the world. We are volunteering more, we are donating, and we are buying from companies we believe in, not just the ones that create good products. We believe in quality not just in goods, but in services and communications. PR is not just about making things look good or right; it can and should be a part of the business strategy. A PR move is a business move; it is strategic, bold, honest, and in keeping with the company’s stated mission and values.
We recently conducted a case study on CVS Health. You may remember that in February 2014, CVS Health announced it would take all tobacco products off its shelves by that October. One month ahead of schedule, in September, the company followed through. It also rebranded and made the bold claim, "Health is everything."
Not only would its pharmacies no longer sell tobacco products, but the clinics would proudly offer smoking-cessation programs. The company encouraged consumers and supporters to share their reasons for smoking, and the response was impressive. Very few people expressed dissatisfaction, and those who did were merely suggesting CVS Health should take it a step further by removing candy or alcohol, as well.
But don’t just take consumers’ word for it; stock prices soared for CVS Health in the latter part of 2014. Its biggest competitor, Walgreens, was put on-the-spot about its tobacco sales, smack in the middle of its tax-inversion controversy with Alliance Boots. Walgreens claimed that ending the sales of tobacco would have little impact on the amount of smoking in the US, and its efforts were better spent on its smoking-cessation programs, which it began to ramp up in the months following CVS Health’s announcement. At least for the time being, Walgreens will continue to sell cigarettes and other tobacco products, despite CVS Health’s decision to remove them from its stores. Clearly, companies continue to succeed catering more to their investors than the morals of some consumer groups. It may very well continue that way for years to come.
Keep in mind that CVS Health was the second-largest pharmacy chain in the US at the time, with sales well over $100 billion according to Yahoo Finance. The company did not need a change in strategy to stay afloat. While consumers could have wondered why a "healthcare company" was selling tobacco products, they had not yet began questioning it. Company leaders took a hard look at their mission, business strategy, and their consumers, and decided it was time to do what is right. The best part? It paid off – consumers and investors alike loved the change.
While CVS Health anticipated a nearly $2 billion loss in 2014, its leaders trusted consumers would take notice and, by doing the right thing, the business would recover from the potential loss and thrive in the new age of honest and wholesome communication. CVS Health embraced its corporate character and was rewarded for its bold decision.
Maggie Christ is a marketing and PR coordinator at Lumity, and Renata Sandor is a relationship manager at Mabbly and an executive producer and show host at MeetAdvisors. They met at DePaul University.
In April, Christ, Sandor, and their classmate Andrew Tonne won the Jack Koten Principles Case Study Competition for their research on the CVS Health rebrand and the value of corporate character.