From its name to its purpose to its stunning visual identity, Robinhood is a wonderfully built brand that’s unequivocal about its mission to democratize the financial system.
That’s led customers to not only flock to the app, but become fans. Some were even evangelists. They bought in. They believed.
This may be why the backlash against Robinhood’s decision to restrict trading on GamesStop and other hot topic stocks 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 on whether 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 viewed as contributing positively to society outperform the stock market by 134%.
The upsides of a compelling purpose-driven brand — loyalty, love, a shared commitment to positive action — are heady and widely discussed. Less often talked about are the equally dramatic downsides that can occur when the brand acts in conflict with their purpose: think user exodus, 1-star reviews and being written off as hot air.
The bolder and more unequivocal the brand’s mission, the more likely a company’s actions are to run afoul of it. The more tightly a brand’s communications are tied to its purpose, the sharper the double-edged sword.
Consumers are increasingly using their buying power to take a stand. More than half of people surveyed by Havas believe brands can play a more important role in creating a better future than our governments. Buying today can be a political act, and consumers’ power to impact change is greater than ever.
In a letter to customers days after the GameStop fiasco, Robinhood said clearinghouse deposit 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 or not customers will judge Robinhood by what it says it wants to do, or what it has done.
What played out is the damage that can be done when a successful disruptor brand is toeing the line of an industry for which it purports to be an antidote. The challenge that Robinhood and brands like it must reckon with is that, very often, they continue to operate within the same systems they are seeking to turn upside down.
Robinhood may very well ride this out. In fact, it just raised over $3 billion over the past few weeks, with some coming from VC firm Ribbit Capital, whose own website proclaims that “It takes money to make money” and that it has “one single, relentless mission: to change the world of finance.”
Many still want the future the Robinhood represents. The question is if they still believe Robinhood wants it too.
Christina Falzano, Managing Director, Conran Design Group