Friday, October 20, 2006

Citgo Responds to a Boycott

What do you do when your company is the target of a boycott? That's a question that Citgo is facing right now; the company is owned by the Venezuelan national oil company, and since Venezuelan president Hugo Chavez has been running around calling President Bush "Satan," the company has become the target of a boycott.

Boycotts almost never accomplish their goals. When they do, it's because the goals are very specific, because the boycott is widespread, or both. The Citgo boycott thus far has been relatively small and has no particular goal (there's no specific action that boycotters want; Citgo can't stop being owned by its Venezuelan parent). Moreover, this boycott doesn't actually affect its target (the Venezuelan government); as Houston Chronicle business writer Loren Steffy points out in his blog, because of the way that gasoline distribution works, the only people who will feel the impact are local American station owners.

Nevertheless, Citgo has launched an ad campaign to counter the bad publicity they're getting:

In the first ad, which appeared Monday in the Washington Post, Citgo President Felix Rodriguez said critics are doing more damage to Citgo's thousands of U.S. employees and small-business owners who sell Citgo gasoline than to the company itself.

"We understand that, as a corporation, we cannot always control the environment in which we operate, but we feel compelled to set the record straight out of respect for our employees, business partners and consumers," he said.

Other national and regional newspapers, including the Houston Chronicle, will run the ads later this week, and TV commercials are on the way, Citgo spokesman David McColluma said.

But one analyst said it remains to be seen whether many consumers connect Citgo and the Venezuelan national oil company, Petroleos de Venezuela, better known as PDVSA.

"For all intents and purposes, most people don't even know they're owned by PDVSA," Fadel Gheit, with Oppenheimer & Co. in New York, said.

There's some risk in the company's response; if a lot of people don't know about the Citgo/Venezuela connection, they may be actually spreading the word and attracting new boycotters.

If you become the target of a boycott, there are a couple of things you should do when formulating a response:

  1. Assess the real impact of the boycott. Nobody likes seeing their brand dragged through the mud, but you need to take a cold, unemotional look at what's happening so that your response isn't out of proportion to what's happening. Reacting too strongly to a boycott that doesn't have legs might just feed the boycott, rather than counteract it.
  2. Look honestly at what the boycotters are demanding. First of all, they might be right; if you're engaged in a bad business practice, you should stop and ask yourself, "Do these people have a point? Are we being a bad neighbor?"
  3. Talk to the boycotters. Boycotts often happen because people feel like a company is an impenetrable fortress that won't respond to their concerns. If those concerns about about the impact of your business on a community, or an environmental practice, or workplace policies, emotions can run high. It's worth the effort to understand the motivation of boycotters, have an opportunity to tell them why you do what you do, and see if there's some common ground.
  4. If false claims are being made, rebut them in a calm way. It's tempting to paint your boycotters are fanatics or lunatics, but that will often appear to be a defensive reaction that stinks of guilt. Your problem is the boycott, not the people.

Our businesses are part of the communities in which we operate. A boycott will feel like a strongarm tactic, and the natural human reaction is to fight back right away. But your response should be calculated, not emotional.

And - needless to say, I hope - if you really are doing something damaging, a boycott might be an opportunity to make your organization a better corporate citizen.


Maureen said...

In Boston, there's a crank trying to get the Kenmore Square Citgo sign taken down in protest against Venezuela. The sign is an iconic part of the city's landscape, and closely associated with the Red Sox. (Fenway Park is just outside of Kenmore Square, and you can see the sign from the stands.)

John Whiteside said...

Kenmore Square without the Citgo sign?!? To this former Bostonian, that just seems WRONG.