Why Sticking with Lance Armstrong, Tiger Woods is Smart Business
Steve Strauss, founder of www.theselfemployed.com, explains why standing by struggling spokespeople, partners, vendors or employees is a smart decision for your business.
I am not sure what is more amazing –
- That Lance Armstrong was banned for life and stripped of his 7 Tour De France championships, or
- That Armstrong decided to drop all challenges against the allegations that he doped during his unprecedented run, or
- That his sponsor, Nike, decided to stick by Armstrong.
While all three developments are fairly remarkable, if you know anything about Nike, you know that, like Loretta Lynn, they stand by their man, and therein lay a good lesson for smaller businesses.
When Pittsburgh quarterback Ben Roethlisberger was accused of sexually assaulting a college student, Nike didn’t drop him. When Kobe Bryant was accused of rape, Nike stuck around. And when Tiger Woods went through his crisis, although Accenture, Gatorade, and AT&T dropped Woods, Nike never wavered in its support of the golfer.
Regarding Lance Armstrong, in a prepared statement, Nike said, “Lance has stated his innocence and has been unwavering on this position. Nike plans to continue to support Lance and the Lance Armstrong Foundation, a foundation that Lance created to serve cancer survivors.”
So, while Nike clearly has a policy of standing by troubled athletes, that doesn’t make their show of loyalty any less significant. Especially in this hyped-up, always-tuned-in age, that a company would choose to stand by a troubled partner is pretty impressive.
It is also smart business, for several reasons:
For starters, for Nike, it turns out that the company was stronger with Tiger than without him, despite the scandal. According to researchers at Carnegie Mellon University, “we find that by sponsoring Tiger Woods for 10 years, in golf balls alone, the Nike golf ball division reaped additional profits of $60 million through the acquisition of 4.5 million customers who switched as a result of Tiger Woods’ endorsement. [And while] the recent scandal regarding Tiger Woods’ infidelity had a negative impact resulting in Nike losing approximately $1.3 million in profit . . . the overall profit was greater by $1.6 million for Nike with Tiger Woods than without him.”
Tiger is profitable, and money talks.
But beyond that, consider what this means to other athletes who are considering various endorsement deals. One thing they will know is that if they team up with Nike, they will have a corporate friend through thick and thin. How valuable is that? And how many athletes have gone with Nike because of that? Plenty, I bet.
And what about the public? No, no one likes to see athletes behaving badly, but people do love a come from behind victory. By sticking with a guy or gal when he or she is down, Nike also assures that it will be part of whatever redemption story may result.
As I said, I think this is a valuable lesson for we small business people. All too often when someone in our world gets in trouble, they are cut loose and/or shunned by their employer and/or fellow employees. It is somewhat understandable – after all, who needs the headache?
But on the other hand, consider the value of sticking by an employee, partner, or vendor who is in trouble. Your loyalty fosters their loyalty. Your allegiance becomes noticeable. Your brand is strengthened once you stand for more than just the bottom line. People respect guts. People respect loyalty. Employees, customers, and other stakeholders will remember your loyalty to a friend in need.
So, while Lance Armstrong will never race again anytime soon, you can be sure that Nike decided that business success is a marathon, not a sprint, and that remaining true to your friends is one way to help ensure that you will make it to the finish line.
Good lesson, that.
Today’s Tip: One last note: While loyalty is clearly a lofty value, there are limits, as there should be. Nike decided to remove Joe Paterno’s name, for instance, from the child development center at Nike World Headquarters in Oregon.
Steven D. Strauss is a lawyer and writer and is one of the country's leading experts on small business as well as an international business speaker. The best-selling author of 17 books, his latest is the all-new 3rd ed. of The Small Business Bible. You can listen to his weekly podcast, Small Business Success Powered by Greatland, visit his new website for the self-employed, TheSelfEmployed, follow him on Twitter, and "like" TheSelfEmployed on Facebook. You can e-mail Steve at: firstname.lastname@example.org. © Steven D. Strauss