Can You Buy Brand Loyalty?
It remains to be seen if the latest move from coffee brand giant Starbucks will get their brand loyalty program back on track. Whilst they, like Google, Amazon and Vodaphone, have been using loopholes in the UK tax law to avoid millions of pounds payable to the government, they started to feel the effect of the bad publicity this tax evasion has created.
Even without considering the effect their behaviour has on local small business competitors, who have to face not only the massive branding and marketing budgets of Starbucks, but also the fact that they do pay 20%VAT on every cup they sell, the public is less than impressed especially since everyone feels the economic downturn and personal tax burden of us living in the UK.
Perhaps someone thought that offering to pay 10million Pound to smoothen the waves is a good idea, but it will have to be seen if they are that easily forgiven or if in fact it fuels the anger and conception that they are trying to buy their way back in…
This Guardian article has some more details.
Brand trust is a quick one to be broken and I for one will continue to avoid the bitter taste their actions left and go to a coffee brand that shares the pain of being taxed.