THE BIG IDEA: How do you build a marketing program that attracts the maximum number of customers while simultaneously fostering loyalty? You start by segmenting your customers based on their commitment toward your business.

__________________

Let’s meet three very different customers: Susan, Lisa, and Stanley.

Susan is looking for a stylish, new fall sweater. She makes her rounds to Target, Kohl’s, JCPenney, Macy’s, Banana Republic, and H&M. Susan is a non-committed shopper. We call her a Nomad.

Lisa needs a new pair of running shoes. She first stops at Dick’s Sporting Goods. If she doesn’t find something she likes or if they don’t have her size, she’ll drive over to Gander Mountain or perhaps Sports Authority. Lisa relates to Dick’s first. We call her an Enthusiast.

Stanley needs a new smartphone. He doesn’t have to research which one to get, he just has to walk into his local Verizon store and pick up the latest iPhone. Stanley loves Apple. We call him a Brand Lover.

Susan, Lisa, and Stanley represent three very different customers for your business: Nomads, Enthusiasts, and Brand Lovers. All three are important, but all three are NOT created equal. All three should not be given equal attention in marketing or product development.

The Customer Loyalty Continuum

To help chief executives better differentiate between different classes of customers, we created the Customer Loyalty Continuum.

Visualize loyalty on a straight horizontal line with less commitment or loyalty toward the left and more commitment and increasing loyalty toward the right.

Nomads are consumers who are not committed to any business in your category, nor are they even exploring a commitment.

Enthusiasts are consumers who have a preference for one or more brands, but have not yet made a commitment to any one particular brand.

Brand Lovers are customers who are unapologetically committed to a brand, because in their eyes, there is no equal.

In essence, the Customer Loyalty Continuum places your customers on a gradient of love, like, and indifference.

Relational and Transactional Mindsets of Customers

You can also classify your customers based on their overall mindset. You have customers with a transactional mindset and others with a relational mindset.

Susan is an example of a customer with a transactional mindset. Transactional shoppers think first. They shop on convenience, price, and location. The commodity, rather than the brand, is the main factor that counts.

Stanley is an example of a relational customer. Relational customers feel first. They have an emotional connection to the brand. They will often purchase from the brand based on how they feel, rather than what they think.

Even in a downturn economy, Apple offers some of the highest priced products on the market, yet this doesn’t dissuade their customers from making repeat purchases. Rationally speaking, it doesn’t make sense. But emotionally, it does.

The farther you go to the left of the Customer Loyalty Continuum, the more transactional your customers are. The farther you go to the right, the more relational they are.

Relational customers are more loyal customers.

How to Best Segment Your Market for Higher Profitability

So how do you build a marketing program that attracts the maximum number of customers while simultaneously fostering loyalty?

You start with customer segmentation. Customer segmentation is the process of dividing your customers into specific groups with similar characteristics.

Common characteristics for customer segmentation include age, gender, interests, common needs, and priorities.

Customer segmentation can help identify target customer groups and underserved market opportunities.  It can be used as a means to allocate resources for marketing and innovation initiatives. It can help you differentiate yourself from your competitors.

But what’s the best way to segment your customers?

The Cult Branding Method for Customer Segmentation

Businesses with a cult-like following tend to focus on their best customers, their Brand Lovers. They learn what drives their best customers’ behavior: what motivates them; what tensions and needs they hold; what they believe; what they aspire to be.

Then, they serve this customer group better than anyone else. Numerous studies highlight that chief executives of outperforming businesses tend to focus on knowing their customers. This customer obsession becomes an organizational focus.

In our work, we’ve witnessed time and again how when you apply penetrating consumer insights about a business’s best customers to a marketing program, staggering growth follows.

Does this mean you ignore the other customer segments on the continuum? Of course not. They are all important for your business.

But you can’t focus all of your marketing efforts on everyone, so why not focus the lionshare of your resources on attracting and serving relational, loyalty-driven, profitable customers (Brand Lovers)?

If you do, you’ll likely pick up more Enthusiasts and Nomads along the way.

THE BIG IDEA: Archetypes are at the core of effective marketing. They provide the most powerful way to attract the right customers. But archetypes are often misunderstood. This week, we examine the archetypal power of one of the world’s strongest brands.

__________________

A line of mindless drones in identical colorless uniforms march in unison through an underground industrial tunnel. The atmosphere is cold, lifeless, and gray.

They enter a large auditorium, sitting down in front of a movie-sized monitor. On the screen, Big Brother celebrates the anniversary of the “Information Purification Directive” that put an end to contradictory thought.

A woman with striking blond hair and an athletic build with bronzed skin charges toward the screen. Dressed like an Olympian in sharp red shorts and a white tank top, she is pursued by the Thought Police who wear riot uniforms and helmets.

As Big Brother declares, “We shall prevail!” our heroine hurls her Thor-like hammer at the screen, which explodes with a flash of light.

The voiceover reads: On January 24th, Apple Computer will introduce Macintosh. And you’ll see why 1984 won’t be like “1984.”

Steve Job’s Vision

This famous ad that debuted as a 1984 Superbowl commercial alludes to George Orwell’s novel 1984, where a futuristic totalitarian government controls its citizens through propaganda, surveillance, and brute force.

This totalitarian regime represents the status quo, the convention, the suppression of new and different ideas. The blond Olympian represents the outlier, the Trailblazer, someone who defies the odds and dares to be different.

Apple isn’t for people who accept the status quo. It’s for Trailblazers and Luminaries committed to changing the world, just like Steve Jobs was.

Here’s to the Crazy Ones

Apple’s 1997 Think Different campaign highlighted the same message with a different approach.

The spot highlighted footage of luminaries including Albert Einstein, Martin Luther King, Jr., Richard Branson, John Lennon with Yoko Ono, R. Buckminster Fuller, Thomas Edison, Mahatma Gandhi, Amelia Earhart, Martha Graham, Jim Henson, Frank Lloyd Wright, and Pablo Picasso.

Richard Dreyfus’s voice-over pays homage to the Trailblazers and Luminaries:

“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”

Apple has become a symbol of creativity, self-expression, originality, and nonconformity. Apple’s marketing team has exhibited a masterful ability to communicate the company’s core idea through images and symbols.

To better understand why Apple is so effective, we need to first understand how images and symbols influence the human mind.

The Power of The Image

Images affect us in ways we don’t consciously appreciate. Images excite emotion. Images can bind us together. They can also tear us apart.

When you learn how to effectively use images in your business, you have a powerful means to influence your customers, trigger emotions, establish trust, and inspire loyalty.

If you don’t have this knowledge, it is all but guaranteed that you will dilute your brand and weaken your position in the market over time.

What is an Archetype?

For psychologist Carl Jung, archetypes are the fundamental units of the human mind.

He pointed out that every civilized human being is still an archaic man in deeper levels of his mind. And within this ancient level of the mind, there are archetypes.

Jung describes archetypes as the forms or images of a collective nature that occur all over the earth. These images find their way into ancient religions, myths, legends, and fairy tales.

Their symbols are everywhere in our daily lives. We find evidence of archetypes in our own dreams, fantasies, and behavior.

We can observe archetypes in the characters in the stories we read, the films we watch, and the plays we attend.

Archetypes are pervasive throughout the arts, media, advertising, and pop culture. They silently influence our relationships with family, friends, and colleagues.

Archetypes are everywhere, even if only a select few know how to identify them.

The Archetype of The Apple

It’s just a simple piece of fruit, right?

Even something as commonplace as an apple is ripe with ancient symbolism and embedded meaning. (Sorry, we couldn’t resist the pun.)

The apple has always been a symbol of knowledge and freedom.

In the Garden of Eden, Eve is tempted by the serpent to eat the forbidden fruit from the Tree of Knowledge of Good and Evil. This act of rebellion leads to their expulsion from the garden.

The moment that Adam and Eve bit into the fruit, “the eyes of the two of them were open.” They became aware of their nakedness for the first time. With the loss of innocence, they wake up, setting the evolution of humanity in motion. The image of a bitten apple symbolizes this acquisition of consciousness.

The apple is also commonly associated with teachers, the bearers of knowledge. A student gives an apple to the teacher as a token of gratitude for this knowledge.

Apples were also considered a food for the gods. In Greek mythology, it is a symbol for Aphrodite, the supreme goddess of love and beauty.

In Celtic tradition, the apple tree is a symbol of creativity.

How Apple Capitalizes on Archetypal Symbolism

Apple (the company) didn’t have to create the association of an apple to awakening, creativity, knowledge, and freedom. Its customers were already hardwired with that information (on a subconscious level).

Apple just had to link its brand with the symbol.

The 1984 commercial did this effectively by retelling Orwell’s classic story in 60 seconds, positioning Apple as the company for people who wanted intellectual and creative liberation.

In the Think Different campaign, Apple associated itself with existing symbols of Trailblazers and Luminaries by simply paying homage to contemporary recognized bearers of knowledge and creativity.

The Apple Logo Makes You Think Different

The Apple logo is now one of the most widely recognized images in the world, associated with creativity, self-expression, innovation, and nonconformity.

In fact, an empirical study published in the Journal of Consumer Research substantiates this association.

The researchers exposed participants to imperceptible images of brand logos for Apple and IBM. Prior to the exposure, participants reported feeling similarly about both brands except for creativity (Apple’s perceived strength) and competence (IBM’s perceived strength).

After the exposure, the participants were asked to describe as many uses for a brick as they could. Results showed that most participants described common uses such as doorstop or paperweight.

The Apple-primed subjects, however, gave an average of 30% more answers. Independent raters also deemed their answers as more creative. The IBM-primed subjects were strikingly uniform in their answers.

Overall, subjects exposed to the Apple logo demonstrated greater creativity compared to participants exposed to the IBM logo.

Through consistent messaging of its brand’s archetype, Apple has seeped into our collective mind. It has established itself as a harbinger of change, creation, and inspiration.

What’s Your Archetype?

Determining what archetype best represents your brand is a worthy endeavor that many national brands undergo. When you know your archetype, you can develop powerful messaging and product innovations that consistently attract the right customer.

Self-starters can begin the process by using a book like Mark and Pearson’s The Hero & The Outlaw. These authors provide 12 different archetypes to choose from.

Based on our research, we take a different approach. Although we maintain a database of over 3,500 active archetypes, we don’t select an archetype for a business.

A brand’s archetype already exists in the customer’s mind (even though they don’t know it). The goal is to probe your customers’ minds with questions designed to measure their unconscious associations to your brand.

Then, the archetype reveals itself.

Some customers have a religious devotion to a particular brand. They may go so far as to permanently scorch their skin with the logo or image of the brand they love.

While this may appear extreme to you, fifteen years of research into Cult Brands has shown us that the psychological reasons behind cult followings illuminate the drivers behind customer loyalty in any business.

So even if you don’t aspire to have customers tattoo your logo onto their heads, if you’re interested in creating loyal, profitable customers, there’s a lot to learn from Cult Brands.

Cult Brands create emotional experiences that lead to feelings of belonging, a sense of shared consciousness with a group of people. The customers of Cult Brands often feel like part of a family instead of consumers of a business. This is a powerful, emotional connection.

Apple, Harley, IKEA, Star Trek, Zappos, MINI, and The Motley Fool all invite their customers into their clan.

So how do they do it?

7 Rules for Cultivating Customer Loyalty

We’ve identified seven core rules that all Cult Brands tend to share. These rules are the fundamental tenets that all Cult Brands consciously or instinctively follow as they do business.

Keeping these rules in mind makes it easier to decide how to grow your business and foster loyalty.

The Seven Rules of Cult Brands provide a framework for ongoing business success. As you read through each rule, think about ways you can apply it to your organization.

Rule #1: Differentiate

Cultural anthropologist Margaret Mead summed up the challenge facing today’s marketers: “Always remember that you are absolutely unique. Just like everyone else.”

Your customers are driven by two simultaneous desires that appear to be diametrically opposed to each other. They want to stand out from the crowd and be a unique individual while simultaneously wanting (and needing) to be part of the crowd, receiving the social support and approval of like-minded individuals.

How do people meet these opposing needs? By belonging to a group they identify as being unique, often outside of mainstream society.

If you’ve got a home, you need furniture. The community of people who need furniture is considerable. But the community of people who need furniture with minimalist charm and serious organizational capacity (and enjoy quirky Swedish names) is smaller and distinct—just different enough to make IKEA irresistible to legions of their fans.

Your customers want to be part of a group that’s different. It’s that simple.

Rule #2: Be Courageous

Even in the face of doubters and critics, Cult Brands dare to be different—and succeed. Cult Brands are successful because they are wholly unlike every other company in the marketplace.

Cult Brands believe in themselves, their products and services, and their customers. They want to challenge conventional wisdom and transform it when given the chance. Willing to take significant risks, the people behind Cult Brands are fighters and leaders, not quitters or followers.

When Whole Foods started in 1980, there were less than six natural foods supermarkets in the United States. Today, the natural and organic foods market is estimated at more than $28.6 billion.

Cult Brands, however, don’t waste their time or energy worrying about who is following them. Their attention is focused on how to better serve their customers.

Rule #3: Promote a Lifestyle

Cult Brands sell more than a product or a service. Customers want more than just things; they are seeking experiences.

Experiential purchases are more meaningful than material purchases. As such, all Cult Brands sell lifestyles. They develop and sell “the tools” that help their customers pursue their dreams and celebrate distinct lifestyles.

Cult Brands remove barriers for their customers. The would-be musician no longer needs to shell out thousands of dollars for expensive instruments and equipment. They just need to download the right apps onto their iPad, and they’re ready to rock.

Apple promotes a creative lifestyle that facilitate self expression. Jimmy Buffett celebrates life as a party. The Life is good Company promotes a laid back weekend BBQ with friends.

Your customers have aspirations. Those aspirations are powered by emotions. If you can support your customers in the realization of their aspirations, they will associate their positive emotions with your business.

Rule #4: Listen to Your Customers

Cult Brands focus on serving the wants and needs of the customers they have. They have the ability to listen to their customers’ discontent and create solutions that build strong, enduring loyalty.

By listening, Amazon.com discovered that the high cost of shipping interfered with how often their customers made purchases. In response, they launched Amazon Prime in 2005, a program in which members enjoy unlimited free two-day shipping in exchange for a yearly fee.

It’s an initiative that has been more successful than anyone could have ever imagined. Over 20 million people are Amazon Prime members. The typical Amazon Prime member buys as much as 150 percent more than non-Prime members. It’s a powerful example of the results of listening.

Respect your choir. Listen to them. Value their opinions. Reward them. Never ignore an enthusiastic follower of your business. Remember that core followers all want to believe, but first they need to see miracles in the form of unexpected gifts and surprises.

Do extraordinary things for your choir and they’ll become incredible brand evangelists.

Rule #5: Support Customer Communities

Cult Brands know how to start a cult. They build strong, ongoing relationships with their customers by developing and supporting customer communities.

Cult Brands aren’t afraid to use today’s profits to support customer communities to generate powerful, long-term goodwill for their businesses and their brands.

When possible, they establish social events that reflect their missions. MINI created their annual Take the State tour. Life is good puts on their popular Music Festival each year.  Harley supports HOG Rallies worldwide. (We attended their 105th Anniversary event in Milwaukee and recorded the magic.)

Rule #6: Be Open, Inviting and Inclusive

You don’t have to earn your way into a Cult Brand by proving you’re cool enough. Cult Brands take it as a given that you’re already cool enough.

Cult Brands welcome customers of all ages, races, creeds, and socioeconomic backgrounds with open arms. They don’t discriminate against anyone who doesn’t fit into an idealized customer profile. Everyone is welcome.

Cult Brands prove to their customers that they are indeed open and inclusive by helping to fulfill the deep human needs that we all share, including belonging and self-esteem.

Rule #7: Promote Personal Freedom

Deep inside every human being on this planet is a need for freedom.

According to Abraham Maslow, the feeling of freedom is a bridge to self-actualization: we want to be able to grow and express our own unique identity and worldview without fear of consequences.

Harley promotes freedom on the open road. Vans promotes freedom from convention. Linux promotes freedom of information. Apple promotes creativity and self-expression.

Cult Brands are empowering and expansive. When customers engage with a Cult Brand, they come away feeling like they can do more, and do it more effectively.

Tapping into the Forces Behind Customer Loyalty

Integrating the Seven Rules of Cult Brands into your operations expands the number of ways you can tap into the forces of customer loyalty.

Consistent application of these principles will strengthen the bond you have with your existing all-star customers, while simultaneously creating new customers.

As your customers deepen their emotional connection with you, their loyalty will grow. Your organization will become stronger, more resilient, and more differentiated.

Oh, you’ll probably become more profitable too.

Click here for a cool slideshow on these seven rules

A long time ago, humans started telling stories.

Our first stories were drawn on cave walls. We started sharing stories even before we developed language.

Humans have been obsessed with stories ever since.

Stories teach us. They bring order to our lives. In many ways, story define who we are. Stories give us meaning.

Marketers and advertisers have learned that storytelling is a powerful medium for engaging and moving customers. Brands like Coke and Apple are masterful at winning the story wars with their competitors.

But the power of stories goes even deeper.

Stories hold the key to uncovering penetrating insights about your customers. These insights can help you not only generate sales, but build lasting relationships with your customers.

Our Brains Love Story

If you asked the average person why we love stories—in novels, films, or TV—she will likely point to escapism. Stories help us momentarily escape from the challenges and stresses of our lives.

But neuroscience reveals a different truth: if you observe a person’s brain as he watches a story in an fMRI machine, you’ll see that his brain doesn’t look like a spectator, but like a participant.

Even though we know stories aren’t real, the unconscious parts of our brains process them as if they are real.

Stories hook us because our brains make us experience what’s happening in the story.

The Grand Narrative of Storytelling

The great scholar Joseph Campbell loved stories so much that he made studying them his life’s work. His field is called comparative mythology.

He studied the stories of cultures around the world, from different periods in our evolution, spanning thousands of years of storytelling.

While most of his contemporaries focused on the differences between each culture’s stories, Campbell focused on the similarities.

He found many such similarities in various stories from around the world. He encapsulated these similarities in what’s become known as the monomyth, or the hero’s journey.

The Hero’s Journey

The hero starts out in an ordinary world before venturing into a special world.

He meets friend and foe. He undertakes quests. He faces challenges.

Winning a decisive victory, realizing his final goal, the hero returns from the adventure, transformed, bearing wisdom and new powers from his journey.

This hero’s quest is age old. It can be observed in many religions including the stories of Gautama Buddha, Moses, and Jesus Christ.

To better appreciate the commercial power of the monomyth consider: It’s the formula for every modern epic adventure including Harry Potter, Lord of the Rings, The Matrix, and Star Wars.

George Lucas, a good friend of Campbell’s, modeled the original Star Wars film precisely around the monomyth structure Campbell provided in his A Hero with a Thousand Faces.

Adjusting for inflation, Star Wars is the second highest grossing film of all time domestically (behind Gone with the Wind). The Star Wars franchise accounts for four of the top twenty highest grossing films of all time.

No wonder The Walt Disney Company announced the release of the sequel trilogy as soon as it purchased LucasFilms in 2012. Star Wars: Episode VII will be released in December 2015.

Most of the major film franchises in the top 50 highest grossing films of all time follow a similar story structure.

So what’s going on here?

The Power Behind the Hero’s Journey

Why is this monomyth so powerful and pervasive in ours and many other cultures? Why is this structure so effective in storytelling?

Remember that when we engage in story, our brains make us participants, not spectators.

The hero’s journey is ultimately about us. And we are fascinated with ourselves.

We identify with the hero, the protagonist, in the story. We are the hero in our own life adventure.

And your customers are the heroes in their own adventures too. They have their own stories to live and tell.

Your role is to support them in their quests, to provide aid when needed.

To do this effectively, you need to know what fuels the adventure.

The Primary Ingredient Behind Every Hero’s Journey

Compelling stories come down to one thing: problems.

The protagonist faces a problem and tries to overcome it. This is the essence of drama and the key to good storytelling.

Without problems, without troubles and tensions, there’s no story. There’s nothing to engage us.

The hero must face his problem, surmount his fear, resolve his tension.

Great Businesses Help Their Customer’s Win Victories

What’s your customer’s primary tension in relation to your brand, products, or services?

How can you help your customers win a decisive victory in their own lives?

Apple helps their users win the war against the mundane, arming them with tools for creativity and self-expression. Many humans are starving for this.

Nike helps its customers transform into warriors, allowing them to improve their physical conditions and master themselves.

Harley-Davidson helps free its riders from the tyranny of an oppressive, conventional world, if only for a Saturday ride.

Star Trek helps trekkies embrace a utopian, futuristic society, free from the insanities of mankind’s current stage of development, if only for a weekend convention.

Brands like Oprah and The Life is good Company counteract widespread pessimism and negativity with optimism and hope.

The Key to Penetrating Consumer Insights

The purpose of consumer insights is to understand the role your business plays in the lives of your customers.

Your goal is to understand their desires, motivations, emotions, and beliefs that trigger their attitudes and actions.

To accomplish this difficult task, decode your customers’ stories. Learn the adventures they are on and the tensions that drive them.

If you do, you’ll be better prepared to provide vital aid on your customers’ quests and become an unlikely ally to them.

And if you do, you’ll win a special place in their hearts and minds.

How do the world’s top brands create loyal customers?

It’s a question our small firm has invested long hours to answer.

Deciphering the code to undying, raving fan customer loyalty unlocks powerful strategies for market domination and long-term profitability.

Cult brands are businesses that have communities of customers that rally around them. In over a decade of research studying Cult Brands, we’ve unearthed seven specific rules they all follow.

Cult Brands don’t just follow these principles, they live them. They work hard to honor them in everything they do.

What are the seven coveted principles of Cult Brands?