Brothers Tom and David Gardner started writing a 16-page investment newsletter for their family and parents’ friends. In August of 1993, The Motley Fool was born. Embracing the power of the Web to harness a community, the Fools quickly established the largest financial community—first on AOL in 1994 and then on their own website in 1997.
Celebrating its 15th year anniversary this summer, the financial advice business created by these two financially-savvy yet playful brothers has evolved to serve and support the Fools community with 250 full-time employees. Their flagship monthly subscription investment newsletter, Motley Fool Stock Advisor, has become the largest investment newsletter of its kind with more than 100,000 subscribers (within five short years).
Taking a methodical approach, let’s see if The Motley Fool (TMF) deserves Cult-Brand status by evaluating the brand through the Seven Rules of Cult Brands. I must disclose that I’m a member of the TMF financial community; that’s part of the reason why I’m convinced they are nearing Cult-Brand status.
Applying the Seven Golden Rules to this “Foolish” Brand
Following the Golden Rule of Social Groups, TMF has one of the most vibrant communities on the Web with over two million monthly visitors and is starting to orchestrate live events around the world—both at investor-related locations and at Foolish headquarters in Alexandria, Virginia.
TMF goes head-to-head with Wall Street—calling out financial analysts and celebrity stock pickers who may be entertaining to watch, but are awful at picking winning stocks in the long run. Not courageous enough? They recently invested $1 million of their own cash with the mission of turning it into $1 billion (that’s right, I said one billion) over the next 50 years. Through their exclusive Million Dollar Portfolio service, Foolish subscribers can trade alongside TMF. This level of transparency demonstrates how TMF has put their money where their mouth is. Following the Golden Rule of Courage? Check.
One of the best qualities of TMF is that they’ve found a way to make investing and other financial matters fun. In fact, it’s part of their mission and even their tagline: to educate, amuse and enrich. Through witty commentary, playful jabs at each other, and comical writing, TMF is committed to helping their Brand Lovers save for retirement and entertaining them in the process. And, of course, the TMF internal culture propagates a similar level of freedom and fun: In a land of political bureaucracy, the Virginia-based headquarters was listed as one of the “Great Places to Work” by Washingtonian magazine.
One might argue that helping people improve their financial situation is linked to lower, survival needs on Maslow’s Hierarchy of Human Needs. But TMF is helping its customers save for their kids’ college tuitions and build towards their nest eggs for retirement. More importantly, TMF empowers millions of investors to take control of their own finances. This Cult Brand has “self-actualization” from the Golden Rule of Human Needs written all over it.
The doors at TMF are always open: Anyone is welcome to join the Foolish Community. The only criterion is the desire to take control of your own finances and to have some fun in the process. Over 50 TMF staffers monitor the forums, offerings insights and data not just as financial “experts,” but as additional members of the community.
As already stated above, TMF exudes freedom—freedom from having to put your hard-earned money with a mutual fund (where over 80% under-perform the market) and having to trust some celebrity stock pickers like Jim Cramer who are wrong 80% of the time over the long run. TMF draws power from the financial institutions at large and through their CAPS rating program. Launched in September 2006, CAPS is a free online stock-rating service that enables users to predict successfully which stocks are more likely to beat and lose to the market average. CAPS creates star ratings for over 5,500 stocks (at present), providing full transparency on how all the major financial players are performing. With this knowledge, you are in the driver’s seat.
A little too foolish, not Foolish enough
What’s keeping this powerful brand out of Cult Brand stardom? First, the long-form sales landing pages used to enroll new members into one of its dozen paid yearly newsletter services is off-putting. This Internet marketing tactic does not project the kind of quality and integrity aligned with the actual service. Communities like TMF grow by word-of-mouth and consumer education, not clever marketing copy. Second, do you want to cancel one of your yearly TMF newsletter subscriptions in order to focus on a different investment strategy? Surely you can cancel your online service online, right? Nope. They make you call to cancel your service over the phone, hoping that you won’t take the time to call—a similar tactic used by gyms that know you’ll procrastinate canceling your membership.
Will these oversights halt TMF’s rise to Cult Brand status? Only time will tell.
Overall, The Motley Fool is a powerful brand that listens to its customers, makes improvements, and serves its customers better than anyone else in its category. Other businesses can learn a lot from this Cult-Brand-in-the-making.