Brand is the sum total of everything a company does and how it interacts with the world. One of the benefits of having a clearly articulated brand position is that when events occur, whether internal or external, you have a guide for how to react.
And with the AMC/GameStop stock scenario last week, we were given insight into two brands — one that is mostly business-centric and one that is customer-centric.
Both trading apps Robinhood and Public.com halted the ability to buy AMC Theatres and GameStop stock last week. I won’t get into the details as to why, as it has been exhaustively covered already. But one handled the situation in an opaque and rather sloppy manner. The other not only stuck the landing but used it as an opportunity to modify their business to be even more customer-centric.
Wait, Robinhood gives to the rich?
But when Robinhood stopped the ability of customers to buy, all they did was send out an email and notify customers via the app saying that they were halting functionality due to “market volatility.” This gave the appearance that Robinhood was favoring Wall Street hedge funds over their own retail customers as the funds were not restricted from shorting the stock. Only later in the day, after the brand damage was done, did they send a second email and go on financial TV channels attempting to explain.
Public.com — a customer-centric company
Unlike Robinhood, Public.com was transparent from the start, provided updates, and were able to allow trading of the stocks later in the day. But they went further than that. Both apps got paid by something called Payment for Order Flow (PFOF). Brokerages are paid to route orders to market makers for trade execution, which creates a potential conflict of interest between brokerage and customer. Basically, “if the product is free, you are the product.” Today, after reflecting on whether or not that was really the right thing to do for their customers, Public.com announced they were ending their participation in PFOF.
The entire situation lays bare what happens when a company only thinks about business and ignores brand (see also Qwikster). Robinhood was caught out both in trying to communicate why they were doing what they were doing and then having to defend what they were doing as a business.
Public.com on the other hand stepped up, communicated clearly, and was thoughtful as to whether or not a core business practice was ultimately the right thing to do for the customer.
The takeaway for any company watching is to get clear on what your brand position is — brand promise, brand attributes, and brand story. If you know those and they are rooted in what your customers need you to be, you’ll not only be better prepared to react to outside events like this but you’ll be in a much better starting place to begin with.
Thanks to Marc Röger for sharing the original post from Public.com with me.
If your company needs to clearly establish its brand position, get in touch. My business partner, Gary McMath, and I have done that and more for companies like Netflix, AT&T Wireless, Gametime, Wild Earth and others.