The Cult Branding Company has been studying the unique qualities of Cult Brands for over ten years. The initial research introducing the concept of Cult Branding and profiling 9 magnetic brands including Apple, Oprah, and Harley-Davidson was published in The Power of Cult Branding (Random House) co-authored by BJ Bueno in 2002. The Cult Branding Company’s research team continues to study the factors behind true customer loyalty.
We don’t take this certification lightly. A panel of reviewers including Cult Brand expert BJ Bueno evaluate each potential brand, analyzing it from the perspective of the Seven Rules of Cult Brands.
Do you think you know a brand that qualifies for Cult Brand status?
In an April 18, 2007 post on our virtual office, I predicted that Google would unveil an operating system (OS) accessible from anywhere. Although not exactly what I had envisioned, I was excited when, in November 2007, Google announced the Android OS.
Android is the product of the Open Handset Alliance (OHA), which consists of thirty-four technology companies. Android is built on Linux and is the first open-source mobile OS. It is highly customizable, allowing mobile phone companies and developers to customize the software to provide the best experience for the user. It’s like having a suit—the OS—tailored to the person—the mobile phone—rather than expecting one suit to fit the body of ever person—the traditional approach of mobile operating systems, like Windows Mobile.
The HTC Dream, the first Android-equipped phone, is set to be released through T-Mobile in October, with presales for existing customers beginning on September 17. Like every major release, Android-equipped phones were initially dubbed possible iPhone killers. But, some recent industry reports have started to look less favorably on Android’s potential.
Android is going to be anything but a surefire hit. The leaked pictures of the HTC Dream make it clear that at least the first phone is going to live or die by the functionality of the Android OS.
Android’s greatest asset is also going to be its greatest liability: companies will have to customize Android for each phone. In effect, the viability of the product is going to depend on how well the phone integrates with the OS, and vice versa. And this is ultimately out of Google’s hands in the hands of the carriers and mobile developers that are part of the OHA.
It will probably take awhile before a company releases a phone incorporating the Android software that will stack up well against the functionality of the iPhone. This says more about the mobile companies’ abilities to create an integrated user-friendly design than the viability of Android.
And, turning Android and the phone into a match made in heaven is going to be a problem amplified by many of the OHA members also being members of the Symbian Foundation—another open-source mobile platform in the works. This could lead to the same companies attempting to design phones using competing open source mobile platforms that require their operating systems to be tailored to the needs of each phone. It sounds like a huge potential headache that could compete for resources.
The best use of Android won’t be an attempt to make an iPhone killer; the best use won’t even compete for the same market—the all-in-one, portable, multimedia device. It’s best use will be to embrace the power of customization and allow mobile devices to be fully tailored to an individual’s needs. If Android is successful, this will probably result in mobile phone devices aimed at specific functional requirements, which will then be able to be customized further according to a certain business’s or individual’s needs. Phones will be able to be tailored to the individual on a mass scale at an affordable price. Perhaps Android will take on the Long Tail of the mobile industry, enabling niche phones.
Beyond the mobile-handset market, Android may, if Google has anything to say about it, play a major role in bringing mobile marketing to life. How mobile marketing will pan out is anyone’s guess, with the $1 billion question being how to not annoy the user. If open source is leading the way, I wouldn’t be surprised if we eventually see phones and possibly even monthly contracts subsidized by advertisers. And that may go a long way to lowering the annoyance factor.
The future of Android is uncertain. I don’t plan on trading my iPhone in for a GPhone anytime soon, but I can’t wait to see what Android holds for the future of the mobile market.
What are archetypes? And why are they important to branding building? Watch our latest slideshow presentation to learn how to create authentic customer loyalty and develop a powerful brand that customers can’t live without.
How 9 Magnetic Brands Turned Customers Into Loyal Followers (and Yours Can, Too!)
(Random House 2002)
>>Like religious cults that attract thousands of devoted disciples, is it possible for company brands to build legions of loyal followers?
>>Can certain products with the right combination of positioning and branding take on magnetic characteristics and galvanize die-hard customers who become walking, talking viral marketers?It’s a marketer’s dream come true!
>>Can your company harness the power of Cult Branding without blowing a fortune on advertising?
According to authors Matthew W. Ragas and Bolivar J. Bueno, the answer is “Yes.” In fact, you need not look much further than a Harley-Davidson rally, a Star Trek convention, or a Jimmy Buffett concert to see the Cult Branding phenomenon at work: thousands of passionate, faithful fans spreading the good word and spending lots of money.Not all brands have the dash of edginess, the devoted fan base, or the niche positioning to manifest Cult Brands. But those that do tend to share similar characteristics, the Seven Golden Rules of Cult Branding, that make them successful.Through meticulous research and scores of interviews, Ragas and Bueno have uncovered the remarkable, untold stories behind nine very successful Cult Brands:
These nine brands follow the Seven Golden Rules and have millions of fans and billions of dollars in revenue to show for it. Now, you can learn first hand what these special brands did to set themselves apart and how to apply the Seven Golden Rules to your own marketing strategies.Written for advertisers, marketers, sales executives, and business owners who want to thrive in an increasingly competitive marketplace, The Power of Cult Branding is the ultimate guide to creating a loyal core of repeat customers and winning the positioning battle.
Praise for the Power of Cult Branding
“Who wants a cult brand? After reading The Power of Cult Branding, you are going to want to create one as soon as possible. The logic, the strategies, and the tactics are spelled out for you in comprehensive detail.”
—Al Ries, author of The 22 Immutable Laws of Branding and chairman, Ries & Ries Inc.
“Ragas and Bueno have not only demystified branding in their brilliant book but also revealed the heart of how to do it with aplomb. And, at the same time, it’s fun to read.”
—Jay Conrad Levinson, author of the Guerrilla Marketing series
“Cult brands, while not easy to create, are among the most powerful. This book will show the way.”
—Jack Trout, coauthor of Positioning: The Battle for Your Mind and president, Trout & Partners Ltd.
“The most insightful look at brand positioning since The 22 Immutable Laws of Marketing.”
—Roy H. Williams, author of The Wizard of Ads series
Business leaders instinctively know that customer loyalty is important, but many feel it is a fruitless endeavor to try to truly win the hearts and minds of their customers. Instead, the “merchant mind” takes over and the focus becomes on the next transaction instead of building a long-term relationship with your customer.
When executives first hear about the notion of building a Cult Brand, they often wonder, “Can we really do it? Can our brand achieve “cult” status? And if so, what would that look like?”
The answer, of course, is, “Yes, you can.” To see what a Cult Brand looks like, watch this brief video of an IKEA store grand opening.
But don’t worry, you’ll learn all about these Seven Golden Rules and how you can begin applying them to your business in the Cult Branding Workbook you just downloaded!
If you’re ready to learn more about Cult Branding and share the information with your team, check out this tutorial.
The Cult Branding team joined HOGs from around the world in Milwaukee for the 105th Anniversary event to learn more about their love for Harley-Davidson.
We have tracked businesses with unprecedented brand loyalty since 2001. A Certified Cult Brand is a designation we hold for brands that fulfill specific market criteria, including upholding the Seven Rules of Cult Brands.
Quick Stats
IKEA was founded by Ingvar Kamprad in 1943.
There are 11,000 IKEA workers in America, and 120,000 around the world
IKEA’s designing process starts with determining the price
The IKEA Catalog is the world’s most distributed annual free publication — 191 million copies are printed in 56 editions and 27 languages
In 2009 660,100,000 people visited an IKEA store worldwide.
Globally, IKEA is the largest corporate donor to UNICEF.
As of October 2010, the chain has 313 stores in 38 countries
Profile Summary
People are camping outside. Traffic jams are so severe that highway exits must be shut down. Traffic lights are rendered useless requiring police to direct traffic. Is it a new Star Wars film? No, it’s the opening of a new Ikea store.
Started in 1943 by Ingvar Kamprad to sell a random assortment of products that he could sell at a cheap price from his house, Ikea has grown into a multinational furniture store. Ikea’s rapid growth continues to be driven by a strong attention to what their customers want: contemporary products that are affordable and functional. This isn’t a concept that is integrated into an aspect of the business plan. It is the driving force behind all decisions. The products are simple in design but visually appealing; they are simple to build, eliminating the need to hire an installer. To sell a mug as cheap as possible, Ikea made it available in only two colors—blue and white—because the pigments were the cheapest. Rather than follow traditional outlets for furniture manufacturing, Ikea obsesses over finding the perfect fit between manufacturer, product, and price—when they needed bent wood arms for a chair, they turned to ski manufacturers.
This attention to cost conscious customers doesn’t stop at the products, but extends to other aspects of the customers’ lifestyles. Understanding that most New Yorkers don’t own cars as they are inefficient and not cost effective, when Ikea opened their Elizabeth, N.J. location right outside of New York, they offered free shuttle service between Port Authority and the store every half hour. For cost-conscious customers, such a trip would have otherwise been too expensive.
Knowing that functionality is a big part of their customers’ buying decisions, when Ikea was designing their Chicago store they didn’t only ask for customer input on what they wanted in an ideal store, they asked them to work alongside with designers in conceiving the final product. After it was finished, no one rated the experience as poor or fair, and 85% rated it as very good or excellent. Return visits increased dramatically.
Functionality differs between regions, and Ikea takes it into account when designing their products. They don’t just have people complete surveys to figure out what they want. They go into their homes and see the ways they live. Visiting people’s houses in Italy and the United States led to the understanding that Americans store more clothing in drawers. The result: deeper drawers for their American products.
This attention to incorporating what their customers want is not lost on the customers. In one forum message, a user identified as bcbaird commented, “I like the Ikea cabinets because the money you spend goes towards the things that count … and not the things that don’t.” And, the attention has paid off: from 1997 to 2005 Ikea doubled its market share and tripled its sales from $600 million to $1.7 billion to become the seventh largest furniture store in the United States.
Timeline
1926 – The founder of IKEA, Ingvar Kamprad, is born in Småland, in the south of Sweden. He was raised on a farm called Elmtaryd, near the small village of Agunnaryd. Even as a young boy, Ingvar knew that he wanted to develop a business. He started by selling matches to neighbours from his bicycle. He found that he could buy matches in bulk very cheaply from Stockholm and sell them individually at a very low price but still make a good profit. From matches, he expanded to selling fish, Christmas tree decorations, seeds and later ball-point pens and pencils.
1943 – IKEA is founded by Ingvar Kamprad. In 1943, when Ingvar was 17, his father gave him a gift for succeeding in his studies. The gift was used to establish his own business. The name IKEA was formed from the founder’s initials (I.K.) plus the first letters of Elmtaryd and Agunnaryd, the farm and village where he grew up. IKEA originally sold pens, wallets, picture frames, table runners, watches, jewelery and nylon stockings—whatever Ingvar found a need for that he could fill with a product at a reduced price.
1945 – The first IKEA advertisements appear in local newspapers. When Ingvar Kamprad outgrew his ability to make individual sales calls, he began advertising in local newspapers and operating a makeshift mail order catalogue. He distributed his products via the county milk van, which delivered them to the nearby train station.
1947 – Furniture is introduced into the IKEA product range. The furniture was produced by local manufacturers in the forests close to Ingvar Kamprad’s home. The positive response was gratifying, and the line expanded.
1951 – The first IKEA furniture catalogue is published. The founder of IKEA saw the opportunity of becoming a furniture provider on a larger scale. He soon made the decision to discontinue all of the other products and focus directly on low-priced furniture, and the IKEA that we know today was born.
1953 – The furniture showroom is opened in Älmhult. The IKEA range focused to home furnishing products in the early 1950s. The opening of the showroom was an important moment in the development of the IKEA concept. For the first time customers could see and touch our furnishings before ordering. This came about as a solution to a problem. IKEA found itself in a price war with its main competitor. As both companies lowered prices, quality came at risk. By opening the showroom, IKEA could in three dimensions present its products with function, quality and low price. And people did just what IKEA had hoped: they wisely chose the products with the best value for the money.
1955 – IKEA begins designing its own furniture. There were several reasons for IKEA to start designing its own furniture. But what actually led to this—possibly our best move ever—was quite ironic. Pressure from our competitors caused suppliers to boycott IKEA. This reaction to our early success required us to begin designing our own furniture, and became the basis for future growth. Ultimately, this would lead to innovative design and improved function at lower prices. Then, by lucky inspiration, one early IKEA employee decided to remove a table’s legs so it would fit into a car, and to avoid transport damage. From that point on, we began to think in terms of design for flat packaging. Which led to even further reductions in price for our customers. A pattern had begun to establish itself at IKEA. Turning problems into opportunities.
1956 – IKEA begins testing flat packages. Designing products so that they can be packed flat and assembled by our customers greatly reduces their cost. This was obvious from the very first day we took the legs off a table and put it in a car. We can ship more items in one truck, less storage space is required, labour costs are reduced and transport damages are avoided. For the customer, this means lower priced products and easy transportation home. But all of this began carefully, one product at a time.
1958 – The first IKEA store is inaugurated in Älmhult. 6,700 square metres of home furnishings! At the time, it was the largest furniture display in Scandinavia.
1959 – Gillis Lundgren—the fourth employee at IKEA—designs TORE, possibly our biggest sales success ever. While visiting a kitchen manufacturer, he noticed the simple, practical storage ideas we use in our kitchens and had the inspiration to apply that same thinking throughout the home. As soon as he got back to Älmhult, he sat down and designed TORE.
The hundredth employee joins IKEA.
1963 – The first IKEA store in Norway opens outside Oslo. This was also our first store not located in Sweden.
Marian Grabinski, consul and architect, designs the MTP bookcase.
It was a contemporary classic, and spawned numerous imitators over the years. In building this and other wood products, IKEA forged good relations with Polish suppliers in the 50s and 60s. These relationships still provide the basis for many of our efforts to maintain prices at levels which the majority of people can afford.
1964 – ÖGLA chair is redesigned to fit the IKEA concept of form, function and price.
1965 – The IKEA store in Stockholm is opened. Thousands of people queued for the opening of our flagship store. The 45,800 square metre store has a circular design, inspired by New York’s Guggenheim Museum. The success created huge capacity problems in serving the customers. By opening the warehouse and letting people serve themselves, an important part of the IKEA concept was born.
1969 – The first IKEA store opens in Denmark. The arrival of particleboard makes its mark on IKEA during the 60s. This inexpensive, hard-wearing and easy to process material was a natural fit for IKEA. In 1969, the PRIVAT sofa was designed by architect Åke Fribryter. It had a particleboard base with a white lacquer finish, and brown floral cretonne covers by the textile artist Sven Fristedt. The straight lines, no-nonsense practicality and unbeatable low price were a tremendous success for the times.
1973 – The first store outside Scandinavia is opened outside Zurich, Switzerland.
Its success paved the way for a rapid expansion in Germany, which is the largest IKEA market today.
1974 – The first IKEA store opens in Munich, Germany. SKOPA chair is designed by Olle Gjerlöv-Knudsen and Torben Lind. Modern plastics give designers lots of new ways to construct good furnishings. But choosing the right production method becomes an important question in the design process. When it came to choosing a manufacturer for our SKOPA chair, the answer was wonderfully simple, even if it did cause a few raised eyebrows. After months of fruitless searching, we took another long look at the shape of the chair and hit upon the idea of asking a manufacturer of plastic bowls and buckets to lend us a hand. Neither form or function were compromised by this unorthodox solution. On the contrary, the final lines were even cleaner.
1975 – The first IKEA store in Australia opens.
1976 – The first IKEA store opens in Canada.
1977 – The first IKEA store in Austria opens.
1979 – The first IKEA store opens in the Netherlands.
1980 – The KLIPPAN sofa appears.The same year that the United Nations declared “The Year of the Child” , IKEA declared “The Year of the Children’s Living Room.” Our KLIPPAN sofa was tough enough to soak up the kind of punishment only children know how to dish out, yet soft enough to fall asleep on when bedtime stories grow too long. The entire cover was removable for machine washing.
1981 – The first IKEA store opens in France.
1982 – LACK shelves are born.
1983 – The six-thousandth employee joins IKEA.
1984 – The first IKEA store in Belgium is opened. The Stockholm range of furnishings appears. IKEA designed a series of high quality furnishings using some of our favourite materials—birch wood, leather and cretonne. Our STOCKHOLM range had everything you would expect of classic high quality, except the high price tag. STOCKHOLM was a winner of the Excellent Swedish Design award.
1985 – The first IKEA store opens in the USA. At first, we weren’t sure the USA needed IKEA. After all, what could we bring to the country that has everything? But we discovered there is a need everywhere for useful, attractive home furnishings at prices for every wallet.
1987 – The first IKEA store in the UK opens.
1989 – The first IKEA store opens in Italy.
1990 – The first IKEA stores in Hungary and Poland opens.
1991 – The first IKEA stores opens in Czech Republic and United Arab Emirates.
1993 – IKEA reaches 114 stores in 25 countries.
1994 – KUBIST storage units appear.This was one of the first IKEA products built with board-on-frame construction. We used a technique for door manufacturing to create inexpensive, sturdy and lightweight storage units. To make beautiful, functional and affordable products for the majority of people, IKEA designers try to carry out product development on the shop floor. Working with existing manufacturers of board-on-frame doors, IKEA saves money. In this case, old factories in Poland were retooled to make parts for KUBIST and other IKEA products.
1995 – DAGIS kids’ chair, by Richard Clack, is born. He obviously took a long, hard look at kids before he designed it. Children do not have sharp corners, they are fairly soft but can stand up to a little rough and tumble now and again. They are cheeky but cute and they just love the hurly-burly of childhood. In this spirit, he designed his chair for children. And then he added one little improvement. As far as we know, children do not yet come in stackable versions to save space and facilitate moving them. DAGIS, on the other hand, does.
1996 – The first IKEA store opens in Spain.
1997 – IKEA introduces Children’s IKEA. IKEA has always provided furnishings for the entire family. But since kids are the most important people in the world, IKEA decided to put them in the spotlight. We worked with two groups of experts to develop products. Child psychologists and professors in playing helped us develop things that are good for kids’ motor skills, social development and creativity. Then the other experts, kids, helped us choose the winners. Play areas, children’s room settings, baby areas, special meals in the restaurant and still more play areas make IKEA a place kids love to visit.
The first version of www.IKEA.com launches.
1998 – IKEA opens its first store in China.
1999 – IKEA numbers 53,000 co-workers across a global network of over 150 stores in 29 countries on four continents. IKEA founder Ingvar Kamprad initiated the Big Thank You Event as a millennium reward to the many co-workers within the IKEA group. The total of all sales worldwide on this special day was given to the employees. The goal for the day was high, but the actual result was higher—approximately 187 million NLG. Every co-worker, from the snack bar staff and stock clerks to the president, got the same bonus. For most, this bonus was more than a month’s pay. It turned out to be a great way to thank the hard working IKEA co-workers for contributing to the success over the last millennium. And this is only the beginning.
We have tracked businesses with unprecedented brand loyalty since 2001. A Certified Cult Brand is a designation we hold for brands that fulfill specific market criteria, including upholding the Seven Rules of Cult Brands.
Quick Stats for Southwest Airlines
Founded March 16th 1967 by Rollin King and Herb Kelleher FORTUNE has ranked Southwest Airlines in the top five of the “Best Companies to Work For” in America.
Southwest ranked first in 1997 and 1998, second in 1999, and fourth in 2000. Southwest has chosen not to participate since 2000. Stock name LUV In 2005 and again in 2008 The American Customer Satisfaction Index (ACSI) recognized Southwest Airlines as leading the industry in customer satisfaction.
The ACSI, conducted by the University of Michigan, independently tracks customer satisfaction levels by measuring the household consumption experience. Among all industries in 2005, FORTUNE has listed Southwest Airlines as number three among America’s Top Ten most admired corporations.
In the wake of September 11th, airlines suffered a major setback. Even after a $15 dollar attempt by the government to save airlines, American, Delta, and United collectively lost $4 billion; the major airlines laid off 16% of their workforce. Southwest managed to make $151 million in profit, but with an entirely different approach: they didn’t lay off any employees and offered customers full refunds on their flights. Southwest’s maintenance of financial reserves to counter major setbacks allowed them to focus on what really matters: the employees and the customers.
The employees and the customers were both grateful: Southwest employees donated $1.3 million to help the airline and customers began sending in donations and sending back gift cards to help with the financial struggle.
Southwest’s company is built on the idea that loyalty begins with the employees. In fact, their ability to be profitable depends entirely on them. Flying short distance flights is, according to conventional wisdom, an unprofitable approach, as planes are forced to spend a greater portion of time on the ground than the air. Rather than cutting labor costs and buying cheap equipment, Southwest relies on their employees to create profit by putting more planes in the air through quick turnarounds.
Strong internal relationships ensure that proper information is passed between individuals when they need it. Employees are hired for their perfect fit into the Southwest culture as much as they are for any job-related qualifications. When something goes wrong, unlike most airlines, there’s no quest to blame an individual or department.
Instead, a much more positive work environment is created in which everyone works together to find out what went wrong and how it can be prevented in the future. Most airlines favor a method where one individual is in control of many flights via a computer system.
For Southwest, the focus remains on person-to-person interaction. Agents are assigned to only one flight at a time and directly interact with other people in the operation, rather than through a computer or telephone. Not only does this face-to-face interaction facilitate relationship building, but it also helps minimize time deficits produced by unforeseen circumstances that would otherwise result in untimely delays caused by lack of communication.
This strong focus and dependence on employee relations ensures that everyone who is working for Southwest really wants to work at Southwest. There’s no hierarchy between pilots and baggage handlers. Everyone is working together to best serve the customer and they’re happy to do it. Not only does their state of mind create a positive atmosphere for the customers, but their efficient, communication-focused approach has resulted in fewer lost bags, fewer delays, and, inevitably, fewer complaints.
Herb Kelleher, ex-CEO of Southwest, demonstrated the understanding that customer loyalty began with the employees, when he claimed profit to be a byproduct of customer service. This driving concept has led Southwest to 33 years of profitability without any layoffs, figures that seem impossible in the airline industry.
Southwest Airlines Timeline
Timeline provided by the Associated Press.
1971 – Southwest begins flying between Dallas, Houston, and San Antonio. The idea for the airline was hatched over drinks by San Antonio lawyer Herb Kelleher and one of his clients, Rollin King, who ran a small charter service in Texas.
1972 – Southwest was forced to sell one of its four planes to meet payroll. Employees made up for the lost jet by turning planes around and starting the next flight in 10 minutes. In a 2008 interview, Kelleher called this the airline’s most challenging time.
1973 – Southwest makes money, starting a string of 36 straight profitable years.
1978 – Herb Kelleher becomes interim CEO for several months, and gets the job full-time in 1981.
1979 – Southwest begins service in New Orleans. Until Congress deregulated the airline industry (in 1978), Southwest couldn’t fly beyond Texas.
1982 – Expands service to California.
1985 – Begins service at Chicago’s Midway Airport. Acquires a competitor, Muse Air.
1989 – Annual revenue passes $1 billion.
1993 – Expands to the East Coast with service at Baltimore-Washington International Airport. Acquires Morris Air to expand into the Pacific Northwest.
1996 – Expands to Florida.
1999 – Begins service at Long Island MacArthur Airport but avoids more congested New York City airports.
2001 – Kelleher steps down as CEO, replaced by general counsel James Parker, but remains chairman. Kelleher’s former legal assistant, Colleen Barrett, is named president.
2002 – Begins phasing out plastic reusable boarding passes. New rules after the 2001 terror attacks required boarding passes with passenger’s name.
2004 – Gary Kelly replaces Parker, who became entangled in difficult labor negotiations with the flight attendants’ union.
2005 – Begins selling travel to Hawaii and other places aboard partner ATA Airlines.
2006 – Congress votes to repeal a law in 2014 that prevents Southwest from operating long flights from its home base at Dallas Love Field.
2008 – The Federal Aviation Administration proposes a $10.2 million civil penalty against Southwest for using planes that hadn’t been inspected for fuselage cracks. Several planes were later found to have cracks. After negotiations, the penalty is reduced to $7.5 million. At the annual shareholder meeting, Kelleher steps down as chairman.
2009 – Southwest launches service in Minneapolis and announces plans to expand to New York’s LaGuardia Airport, Boston’s Logan Airport, and Milwaukee.
