When can turning away customers be a good idea?

A few days ago I received a surprising email from Airbnb, asking users to accept a Community Commitment to treat everyone with respect and without bias, in response to widespread prejudice in their bookings. It’s not surprising that Airbnb is concerned and making an effort to address this troubling issue. What made me raise an eyebrow was that Airbnb is refusing to do business with anyone unwilling to agree to their pledge.

How can it possibly be a good idea to walk away from potential customers? Because Airbnb is more keenly aware than most businesses that they don’t just provide an awesome experience, although that’s already pretty great. Airbnb is masterful at building their brand. And that’s what makes their insistence on living that brand’s values with true authenticity a really smart move.

While it requires courage to walk away from potential customers in the pursuit of what a brand believes in, it’s more than just morally right. It’s absolutely great business! This move will make Airbnb’s brand stronger, clearer, and I'm convinced that it will ultimately be more successful.

Like many moves that are truly brand-building, it might require a longer time horizon to reap the benefits, but that doesn’t mean that it won’t pay out in the end. Airbnb’s move reminds me of CVS’ decision in early 2014 to stop selling cigarettes, in order to live in alignment with their brand commitment to consumer health. Although they walked away from a staggering US$ 2 billion in direct sales, two years later the brand is showing a positive growth trend, having replaced lost cigarette sales with healthier foods and expanded beauty lines. More importantly, their smart and clear brand-building, through authenticity, has them better poised for continued growth.

Want more background?

NYT articles on the Airbnb discrimination here and here

Coverage of CVS’ cigarette ban here and here

Financial advisors feel that CVS is stronger bet for the future than rival Walgreens here and here