Why the Robinhood-GameStop saga is an important lesson for disruptive brands
From its name to its purpose to its stunning visual identity, Robinhood is a wonderfully constructed brand that is unequivocal about its mission to democratize the financial system.
This has led customers not only to flock to the app, but to become fans. Some were even evangelists. They bought. They believed.
Perhaps this is why the backlash against Robinhood’s decision to restrict trading on GamesStop and other topical actions has been so strong. The greater the trust in a brand, the greater the feeling of betrayal when that trust is broken.
We can only speculate that Robinhood’s actions were business as usual. What we do know is that brands are held to a higher standard than ever before by their consumers.
More than two-thirds of people buy from brands that share their values, according to Havas’ Meaningful Brands study. Brands seen as contributing positively to society outperform the stock market by 134%.
The benefits of a compelling goal-driven brand – loyalty, love, a shared commitment to positive action – are captivating and widely discussed. We talk less often about the equally dramatic inconveniences that can arise when the brand acts in conflict with its objective: to think about the exodus of users, to 1 star reviews and to be seen as hot air.
The bolder and more unequivocal a brand’s mission, the more likely a company’s actions are going against it. The more closely a brand’s communications are related to its purpose, the sharper the double-edged sword.
Consumers are increasingly using their purchasing power to take a stand. More than half of those polled by Havas believe that brands can play a bigger role in creating a better future than our governments. Buying today can be a political act, and the power of consumers to influence change is greater than ever.
In a letter to clients days after the GameStop fiasco, Robinhood said the clearinghouse filing requirements forced them to put the trading restrictions in place. Not exactly a mea culpa. Following that, Robinhood made a bold statement: “We didn’t want to stop people from buying stocks and we certainly weren’t trying to help hedge funds. ”
It remains to be seen whether customers will judge Robinhood by what he says he wants to do, or what he has done.
What has played out is the damage that can be done when a successful disruptive brand follows the line of an industry for which it claims to be an antidote. The challenge that Robinhood and brands like it face is that very often they continue to operate within the same systems that they seek to upset.
Robinhood can do very well. In fact, he’s just raised over $ 3 billion in the past few weeks, some from venture capital firm Ribbit Capital, whose own website proclaims that “it takes money to make money. money ”and that he has“ a unique and relentless mission: to change the world of finance.
Many still want the future that Robinhood represents. The question is whether they still believe Robinhood wants him too.
Christina Falzano, Managing Director, Conran Design Group