Corporate social responsibility, Starbucks, and Reputation rehab
Accusations of tax avoidance are never good for a brand. Least of all one that prides itself on ethics- from fair trade to gay rights. But, as the last few months have shown, the world’s biggest coffee chain is back on the boil.
This is despite the fact that all is definitely not well at Starbucks PR HQ. After questions were raised about its contribution to the British economy, or lack thereof, and denials were issued- along with assurances that this year things would be different- the company unarguably suffered a huge blow to its reputation. And the fall out has been significant.
The first move to wipe clean the tarnished company name came with a promise to pay some corporation tax over the next two years, to the tune of £20million. And, by making good on that promise, the brand has taken a big step in the right direction- commitments, after all, are useless, irrespective of how good the press release is, unless you actually commit.
In real terms, though, this was never going to get Starbucks back to where it once was in the eyes of consumers. Its Buzz score, calculated by BrandIndex based on what members of the public hear about a company, stood at +1.9 before the fiscal revelations, but plummeted to -45.2 by Christmas 2012, once the headlines hit. And that kind of loss comes with a long recovery.
As such it would make sense to focus on personalisation and intimate customer interactions. Which is just what the coffee company did, so soon we were offered our name emblazoned on mugs. The suggestion being those serving us, and in turn the people paying their wages, wanted to be our close friend, or an ally to rely on, not just representatives of another faceless hospitality experience between the public and a multinational.
This idea was then taken even further by the introduction of reusable cups. Anyone ordering a drink in the recycled vessels will receive a 25p discount off their purchase- an offer that achieves two things. By focusing on an environmentally friendly campaign the brand builds on its established reputation for ethics. Meanwhile, this also encourages repeat visits amongst those customers keen to keep the bill down.
And, finally, we have the admirable Suspended Coffee initiative, whereby people buying a drink now have the option to reserve another for the homeless. Again, the incentive to buy Starbucks hinges on the image of supporting a business that wants to improve the world, rather than simply profit from it. All in a good day’s reputation re-building work, impressive as these initiatives are we’ll have to wait and see if further action is still needed.