Clout, Do You Have Enough? How to Gain Legitimacy With Customers
The Brief: Institutionalism describes how organizations gain legitimacy, trust and acceptance by society (customers, investors and communities). This legitimacy can be used to create, acquire and maintain customers. This concept is similar to ‘clout’ which describes the influence in social media acquired through followers, likes and shares.
There are 3 approaches to building legitimacy: 1) mimetic forces: copying or mimicking the strategies, practices, and behaviours of industry leaders or respected peers, 2) coercive forces: complying with industry regulations, government policies or consumer demands and 3) normative forces: aligning with norms and embodying values that resonate with an organization’s target audience.
To develop legitimacy by applying these approaches organizations should: • conduct market research to identify the strategies and practices of industry leaders, • establish partnerships & alliances with reputable organizations to leverage their credibility and brand awareness, • promote compliance with appropriate regulations, industry standards and commitment to stakeholders, • demonstrate long-term obligation to sustainable and environmental causes and alignment with organizational objectives and, • establish a brand identity that demonstrates a connection with the values and ethics of the target customer.
In today's marketplace, where businesses can be started overnight, success is not just about having a great product or service. It's also about having the right amount of clout. Clout? What is clout? Clout is defined as “power and influence over other people” (Cambridge Dictionary, 2024). From a social media perspective, clout refers to the number of followers and levels of engagement i.e., likes, shares and comments.1 A key or perhaps the primary benefit (outcome) of having a high amount of clout (influence), is that it can translate into customers.
The concept of clout aligns closely with the principles of institutionalism in organizational theory. According to Daft & Ann Armstrong’s Organizational Theory and Design, institutionalism emphasizes the importance of organizations conforming to societal norms, values, and expectations to gain legitimacy and support. Organizations seek to gain clout or legitimacy by adhering to established norms and structures within their respective industries. With this legitimacy, organizations become an ‘accepted’ part of society. That acceptance or trust is used to convert prospects (or followers) into customers.
There are three (3) forces through which organizations can gain legitimacy: Mimetic Forces, Coercive Forces and Normative Forces
Mimetic forces involve organizations imitating the actions of others, particularly those that are perceived as successful or legitimate. This can involve copying or mimicking the strategies, practices, and behaviours of industry leaders or respected peers. For example, a start-up may adopt similar branding and marketing tactics, or provide similar product features as a well-established competitor to gain legitimacy and recognition from customers. When Uber disrupted the traditional taxi industry with its business model, other competitors emerged like Lyft in the United States and Grab in Southeast Asia, to capitalize on the proven model for transportation. Lyft and Grab mirrored Uber's strategies, branding, and user experience, which allowed them to gain legitimacy in the eyes of consumers and investors.
Coercive forces refer to the pressure exerted on organizations to comply with external regulations, standards, or expectations. This could include industry regulations, government policies, or even consumer demands. By conforming to these coercive forces, organizations demonstrate their commitment to operating ethically and responsibly, which enhances their legitimacy in the eyes of stakeholders. In the case of Nike, it responded to coercive forces which helped it to gain and maintain its legitimacy with customers and regulatory bodies in response to pressures to address labour rights issues and improve working conditions. Nike collaborated with industry organizations, non-governmental organizations (NGOs), and other stakeholders to address labour rights issues3 and enhance transparency in its supply chain e.g., the development of the Nike Supplier Code of Conduct.
Normative forces revolve around the social norms, values, and beliefs that shape collective behaviour within an industry or society. Organizations build legitimacy by aligning themselves with these norms and embodying values that resonate with their target audience. For instance, a company that prioritizes sustainability and environmental stewardship can earn admiration and loyalty from environmentally-conscious consumers, which strengthens its legitimacy in the market. The food and beverage industry demonstrates this well with the rise of plant-based alternatives. As societal attitudes towards health, animal welfare, and environmental sustainability evolve, consumers are increasingly shifting their preferences towards plant-based diets and products. In response to these shifts, established fast-food chains like McDonalds have introduced plant-based alternatives to their menus, to the new Hart House quick-service restaurant, which is 100% plant-based.4,5,6
How Do You Apply Institutionalism to Gain Legitimacy
With an understanding of the approach to building legitimacy, the next question is how an organization applies that knowledge to attract and maintain customers.
Market Research and Analysis: Conduct comprehensive market research to identify industry leaders, competitors, and emerging trends. Analyze successful organizations within your industry to understand their strategies, practices, and brand positioning. Identify key areas where your organization can mimic the actions and approaches of established players to gain credibility and recognition.
Strategic Partnerships and Alliances: Forge strategic partnerships and alliances with reputable organizations and industry influencers. Collaborate with established brands or industry leaders to lend credibility and legitimacy to your organization. Leverage the reputation and networks of your partners to enhance your brand's visibility and trustworthiness in the marketplace.
Compliance and Certification: Ensure compliance with relevant regulations, standards, and industry best practices. Obtain certifications, accreditations, or endorsements from recognized authorities or industry bodies to validate your organization's commitment to quality and integrity. Showcase your compliance efforts and certifications to customers, investors, and other stakeholders to build trust and credibility.
Social Responsibility and Sustainability Initiatives: Implement social responsibility and sustainability initiatives that align with prevailing societal norms and values. Demonstrate a genuine commitment to environmental stewardship, ethical sourcing, and community engagement. Engage with stakeholders through transparent communication and reporting on your organization's social and environmental impact.
Brand Positioning and Communication: Develop a strong brand identity and positioning that resonates with your target audience and reflects your organization's values and mission. Communicate your brand story, values, and commitments through various channels, including marketing campaigns, social media, and corporate communications. Engage with customers, influencers, and the broader community to build relationships and foster trust in your brand.
While clout is a term commonly used in the social media industry to describe the number of followers, likes, and shares, it relates to the fundamental importance of developing legitimacy and the necessity it plays in organizations acquiring and maintaining customers. You may build it, but will they come, and if they come, will they stay? //
1. Clout, Later, Social Media Management, 2024. 2,. Organization Theory & Design, 4th Edition, Richard L. Daft and Ann Armstrong. 3. Impact Partnerships & Collaborations, Nike, 2024. 4. McDonald’s Tests New Plant-Based Burger in Southwestern Ontario, McDonald’s, September 26, 2019. 5. McPlant TM, McDonalds, 2024. 6. Hart House, 2024