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We get attached. It’s part of what makes us human. When that attachment is to a brand, it’s known as “brand loyalty”. The Business Dictionary defines it as “The extent of the faithfulness of consumers to a particular brand, expressed through their repeat purchases, irrespective of the marketing pressure generated by the competing brands.” In the field of electronics, Apple is a company that is known to have a very loyal customer base. This Jimmy Kimmel video is a great example.

People on the street were presented with what they were told was the newest iPhone, but they were actually being shown an 8 year old model. They still praised it though, saying things like “Apple has done it again”. The device was obviously old and obsolete. Faith in Apple caused these people to ignore their instincts telling them that the phone was a piece of junk. Customers like these are essential to Apple’s (and countless other companies) success. After all, 80% of revenue for most companies comes from 20% of their customers — the loyal ones. The uninformed praise, unconditional love, or whatever you want to call the disregard of common sense displayed in the video is essential for business owners today to be aware of. For many companies, the quality of their products is not nearly as important as the techniques they use to create loyal customers.

“Business Ethics” source

After reading The Social Responsibility of Business is to Increase Profits by Milton Friedman, it occurred me that I had never really considered what the idea of “social responsibility” (as it applies to the business world) really means. On most companies’ websites there is a page or tab dedicated to a “mission statement” or “business model”. Take for example BP’s. The first sentence claims that they strive to “improve quality of life for millions of people”. While this may be true to some extent, it is by no means their first priority. As Friedman points out, the first priority of any for-profit organization is just that, to make profit. So why wasn’t that the first sentence? The issue is that these days, businesses (and those in charge) are being scrutinized like never before when it comes to ethics. In his article on the Huffington Post, Terry Newell gives the example of Mary Barra, CEO of GM, who had to go to extreme measures to “repent” for a faulty ignition switch which caused 13 deaths. In some ways it is no longer a CEO’s job to focus on the prosperity of the company, but instead on the prosperity and happiness of customers and others who could be indirectly or directly affected by it’s actions.

What all of this says to me is that public opinion is priority #1 for most companies. Many people boycotted Chik-fil-A recently not because they were selling bad chicken, but because it became public knowledge that a small percentage of all profits go to anti-gay organizations. This is just one example of countless others out there today.

I think it’s good that companies are being forced to be ethically conscious, but ultimately I agree with Friedman that almost without a doubt the first priority of any business is to make money, and so they should stop hiding under their “ethical” masks.

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