B4BExchange

During the pandemic, I launched a newsletter and a series of webinars, collectively called the B4BExchange, to stay connected with clients and prospects. I’m now relaunching this initiative with a renewed focus on delivering news and educational content to businesses and professional traders in the exchange trading community. I will offer insights from the clearing side of the industry, while also highlighting products and developments from key players in the global exchange trading space. If you’d like to contribute and add value to the B4BExchange, please feel free to reach out.

01/31/25

This morning, I read a LinkedIn newsletter titled "How Consultants Almost Destroyed Nike’s Brand" by Erik Mashkilleyson of Avidly. Erik highlighted several missteps he believes Nike made under new management, influenced by consulting advice. The company prioritized easily measurable metrics over the deep insights of specialized teams. As a result, Nike’s marketing shifted toward existing customers at the expense of broader brand-building. This approach led to a decline in product innovation, strained relationships with wholesale partners, and a significant drop in market value. In essence, they overlooked the expertise of staff and partners who truly understood their customers.

In the brokerage business, "Knowing your Customer" is not only an essential part of developing new business but it's a regulatory requirement designed to protect the firm and the firm's clients. See RULE 2-30. CUSTOMER INFORMATION AND RISK DISCLOSURE.

Before joining Phillip Capital Inc., I spent over 20 years as a traditional client-facing broker. One of the most valuable pieces of advice I ever received came from a former exchange president, who told me, "Never assume your customer knows what you know." Customers vary widely, and in the futures industry, many use futures to hedge their core businesses, while others speculate alongside traditional assets like equities.

A significant portion of clients rely on brokerages not just for execution but for guidance on new and existing products. Every client depends on their brokerage for risk management, collateral management, and clearing services. Over time, consistently delivering on these fronts fosters trust between broker and client, leading to retention and referrals. The best brokerages don’t rely heavily on outbound sales; instead, clients seek them out. These are intangible advantages that can’t always be measured. While product, price, and convenience are important, a strong brand is built first by knowing your customer.

Nike exemplified this approach by understanding its audience. Who doesn’t remember the "It’s Gotta Be the Shoes, Michael" commercial by Spike Lee or the iconic "Just Do It" campaign? I had a "Just Did It" poster of Jerry Rice on my wall as a kid. Of course, when I transitioned from hockey to basketball in sixth grade, I quickly learned—it’s not the shoes.

The key takeaway? Know your customer. Understand their motivations. Value your key partners. Define your brand—then build an accessible product. Pricing comes last.

JG

The views and opinions expressed in this post are my own and do not represent those of Phillip Capital Inc. This content is for informational purposes only and should not be considered as investment advice, solicitation, or an offer to buy or sell any futures contracts. Futures trading involves substantial risk and is not suitable for all investors. Past performance is not indicative of future results.