So much for the tarnished Trump brand.
Just as many forecasts of the U.S. presidential election got the results spectacularly wrong, so did those who expected that Donald Trump’s business empire – much of which is built on the value of licensing his name – would be in shambles.
In September, billionaire Mark Cuban tweeted, in a message that has since been deleted: “If @realDonaldTrump loses this election, im betting he personally goes bankrupt w/in 7 yrs. Thats how toxic his brand now is. [sic]”
Toxic, maybe. But America has picked its poison. The campaign was riddled with misogynist language, divisive politics and threats of xenophobic policies that should have been harmful to both Trump’s political and business prospects. Now that the results are in, president-elect Trump’s brand is more powerful than ever.
“Certainly they’ve got to feel better about brand Trump today than they did a few days before the election,” said Howard Opinsky, a former Republican campaign strategist and now executive vice-president at branding and public-relations consultancy Hill+Knowlton Strategies in Washington.
“We’ve been tracking the Trump brand for about 25 years, and most of the time it’s been consistently one of the most powerful we’ve ever seen,” said Robert Passikoff, founder and president of New York-based Brand Keys, a consultancy that researches customer loyalty and brand perception. “When he entered the political arena, some of his product categories went up, some stuff went down. When the Access Hollywood tape was revealed [in which Mr. Trump bragged about grabbing women’s genitals without consent], everything went down. We did an overnight when he was made president-elect, and everything went up.”
Brand Keys’s post-election survey spoke with 1,203 registered voters in nine U.S. census regions – only surveying those who actually are target consumers for a product – to test the value of “Trump” across product categories. (Other surveys which serve as a benchmark on brand values over time typically speak with a much larger sample.) Those include real estate (including hotels), country and golf clubs, TV and entertainment, and clothing and accessories.
Comparing groups who see Trump-branded merchandise against control customers who see the same products without, the firm estimates the price bump consumers might be willing to pay for the name.
Before Mr. Trump entered the race, in April, 2015, the firm estimated that his brand provided 37-per-cent added value in the TV and Entertainment category, for example; after the tape was released it fell to 30 per cent; and after the election it rose again to 40 per cent.
In real estate, its added value was 30 per cent before the campaign; 22 per cent after the tape; and is now up to 43 per cent, higher than ever. The brand’s value has fallen slightly in apparel and accessories.
“Any time you mix a brand with politics, you’re immediately going to be alienating a lot of people,” Mr. Opinsky of Hill+Knowlton said.
“That may not matter. In branding you’re not necessarily looking for 100 per cent of the consumer audience. If you get your share of dedicated consumers, who are not only going to engage with your brand but advocate for it, then it will have a wider appeal.”
And yes, that’s still true despite some of Mr. Trump’s rhetoric.
“I do think that destructive comments still harm a brand,” Mr. Opinsky said. “… That being said, it was a clear strategy to be provocative. And that’s a trend that does transfer across business.”
What he means is that more companies are willing to be provocative in order to define their brands more clearly and perhaps to align them with the values of people to whom they are trying to appeal.
Often those values skew to the other side of the political spectrum from Trump, however, such as when Starbucks Corp. chief executive Howard Schultz publicly asked customers not to bring firearms into his cafés, even in “open carry” states; or when those such as Intel CEO Brian Krzanich and Yelp CEO Jeremy Stoppelman openly opposed ballot measures that would limit LGBT rights.
“Businesses are making decisions that are dividing their consumer base over issues that have nothing to do with the quality of the product,” Mr. Opinsky said. “We’ve moved away from a traditional view of business where the wisdom was to say nothing that could possibly alienate the consumer public.”
Trump’s brand has proven resilient before, maintaining its luxury image despite lawsuits and a number of failed business ventures.
What happens to the business empire now is an open question: There has never been a president – a political brand in and of itself – who at the same time has such a vast brand-licensing business to his name.
“It’s a new kind of hybrid brand that I don’t think anyone’s ever seen before,” Mr. Passikoff said. “You’ve got a new paradigm. We don’t know what it means yet.”Report Typo/Error