The Power of Cult Branding

Some called them brave—others, crazy. The American motorcycle manufacturer born in a Milwaukee shed in 1903 drifted out of greatness in 1965. Japanese motorcycle makers began churning out less expensive, superior quality bikes. Worse yet, unreliable engines were plaguing this great American legacy—the curse of any manufacturer.

Led by CEO Vaughn Beals on February 26, 1981, thirteen brave Harley-Davidson Motor Company executives decided to buyback their failing business in an $81.5-million leveraged buyout. Now, these thirteen strong had no choice: turnaround the company or let it die.

The Merchant Mindset

Most businesses focus primarily on generating the next transaction. Customer loyalty is perceived as unattainable to merchants who figure, “We might as well try to squeeze one more sale out of them.” But if you’re battling for the next transaction, over time, you’re destined to lose. Customers who choose you based on price will leave you for the same reason.

Businesses with passion and heart build relationships with their customers. There are decision-making factors that far exceed price, selection and location. A company like Wal-Mart is masterful at connecting with customers and offering them an intangible benefit they can’t get anywhere else. Do you think millions of people shop at Wal-Mart everyday because of price alone? If so, why do you think people drove 20 miles past their local K-Mart to shop at Wal-Mart? Both retailers had similar products with comparable prices. Wal-Mart made the customer its boss, an approach heralded by founder Sam Walton himself, and Walton’s loyal patrons felt it.

Cult Branding Defined

A rare few businesses go a monumental step further. A Cult Brand is born when a benign group of individuals rally around a brand’s lifestyle. Psychiatrist Carl Jung called it the participation mystique. These brands spark a magical participation with their customers; they embrace a certain way of being, aligned to a specific set of beliefs.

You can be a corporate attorney running frantically from meeting to meeting, but when you enter a Jimmy Buffett concert you morph into a Parrothead. Litigation, conference calls and the stress of daily life slide into shadow. Now, you’re all about burgers, cocktails and connecting with friends in the paradise of Margaritaville.

Cult Brands embrace what psychologist Abraham Maslow called B-values—values that inspire humans to grow and reach their potential. B-values include truth, goodness, beauty, wholeness, aliveness, uniqueness, perfection, completion, justice, simplicity, richness, effortless, playfulness and self-sufficiency. Within any Cult Brand you’ll find B-values being awakened in their beloved customers. Trekkie conventions and Mac User Groups embrace the value of uniqueness. Margaritaville personifies the values of aliveness and playfulness.

Unlike destructive cults that damage people and their surrounding communities, members of Cult Brands behave in constructive ways towards their communities. Here, people fulfill deeply-rooted human needs and enjoy the lifestyle the brand offers. Within these coveted communities, you get to be who you really are—you are allowed to be happy, to be yourself, to be weird together and feel weird no more.

Few authentic Cult Brands grace the business world, but we know who they are. Their customers make sure we do: Apple, Harley-Davidson, Oprah, Ikea, Southwest Airlines, Linux, Vans, Star Trek, Jimmy Buffett, WWE and VW Beetle—the list isn’t very long. Cult Brands have been in business for an average of over forty years, fueled by the people who love them the most.

Our decade of research and study of Cult Brands shows that great brands don’t happen by accident. Unequivocal customer loyalty—to be chosen over and over by a core group of customers who refuse to shop at your competitors—takes conscious effort.

Embracing Your Brand Lovers

Cult Brands don’t just foster casual relationships with their customers; they find ways to play an integral part in their lives. They embrace their customers like members of a loving family, providing a safe community for them to be who they really are. These brands are bold and courageous — often disliked by many, but loved by a precious few. We call these special few Brand Lovers.

These customers love their brand for reasons they probably don’t fully understand, but they love their brand nonetheless. A small legion of Brand Lovers will do more for the growth and sustainability of your business than all the transactional customers in the world. Not convinced? We’ve found that Pareto’s Law (the 80/20 Principle) holds: a small percentage of customers can drive over 80 percent of profitability. It costs five times more to acquire a new customer than keep an old one. Most importantly, the customers who love you the most—your Brand Lovers—spread the word and create new customers for you (just ask anyone who owns a Mac, an iPod, or an iPhone).

Are all of your customers contributing equally to your profits? It’s unlikely. There are certain customers who choose you more often. These precious few are the lifeblood of your business.

Do you know who your best customers are? Without this knowledge, you will take yourself out of business or your competitors will do it for you.

  • Does your company really listen to the feedback and suggestions of its most loyal followers? What are these customers saying?
  • Customers want to be appreciated. They want their suggestions to be heard and used. How do you reward your best customers? If you haven’t been rewarding them, do it quickly before someone else does.
  • Every company can do more to show its customers appreciation for their business. What are new ways you can show your customers that you “listen” and that you appreciate them?

Oh, and in case you’re wondering, those thirteen Harley-Davidson executives listened intently to their Brand Lovers the way only Cult Brands do. In 1984, they released a new engine called the Evolution that extinguished many of their quality concerns. More importantly, they worked hard to strengthen their relationship with their customers, forming the Harley Owners Group (HOG) in 1983 — an international customer club with over one million devoted owners. Did their $81.5-million buyout pay off? A $10 billion company valuation seems to answer that question quite nicely.

March 15, 2012 by

Meet Mr. Maslow: The Father of Cult Branding

Why are certain brands so important and meaningful to some customers that they feel compelled to tell the world about them? What makes them go that extra mile?

Understanding human behavior—what motivates people to do certain things and act certain ways—is at the very core of successful marketing.

This is where the work of the late, great psychologist Abraham Maslow comes in.

Maslow postulated that we humans have an ascending order of needs and used a hierarchy of needs to prioritize them. At the bottom levels of the pyramid are our physiological needs, which include basic things like food, shelter, and clothing that we all need to survive.

At progressively higher levels in Maslow’s Hierarchy are the needs for safety and security, social interaction, and self-esteem. At the very top is self-actualization, a term Maslow coined to describe the ultimate human need to learn, grow, and reach one’s full potential as a person.

We all desire on some level to self-actualize, both to be at peace with ourselves and to try to be the best we can be. As humans, we are drawn to people, places, groups, causes, companies, and, ultimately, brands that we believe can help us towards our ultimate goal of self-actualization and total fulfillment.

Why the Hierarchy of Needs Is a Crucial Tool for Branding?

Perhaps the most important thing to take away from Maslow’s Hierarchy of Human Needs is his theory that all human beings start fulfilling their needs at the bottom levels of the pyramid.

In short, we fill our low physiological needs first. Higher needs like safety, social interaction, and esteem basically do not exist at this point. Logically, survival comes first.

However, once an individual has satisfied his or her lower level needs, the higher level needs become influential in motivating behavior.

As Maslow notes time and time again in his work, “Man is a perpetually wanting animal.”

Maslow’s writings break down the underlying drivers of human behavior and decision making. Maslow never mentions the phrase “brand loyalty” in his books, but his Hierarchy of Human Needs and concepts like self-actualization are key to understanding why consumers consistently choose one brand over another and enjoy such strong relationships with them.

So, why is fulfilling higher level needs so integral to building strong customer loyalty? What’s the connection, you ask? The answer is, higher level needs influence future human behavior much greater than lower level needs. It is the brands that can fulfill human needs on the higher levels of the hierarchy that become irreplaceable in the mind of the consumer.

That’s what customer loyalty is really all about: being irreplaceable.

True customer loyalty is not only about getting a customer to consistently choose your brand over another. It’s for that same customer to always believe (and then go tell the world) that your company’s brand has no equal!

This article is an excerpt from The Power of Cult Branding.

March 15, 2012 by

The Loyalty Continuum

Most companies try to build brands that no one will hate instead of brands some people will love. Most marketers live in a world where they are constantly searching for the flashy, the splashy—in short, the trivial, often-meaningless brouhaha that has very little to do with the core of the brand.

Cult Brands understand that their brands belong to the customers. Only the customer’s voice counts. A successful Cult Brand embraces its customers by anticipating their basic human and spiritual needs. As a consequence, Cult Brands achieve a level of customer loyalty unprecedented in traditional business.

To help illustrate, let’s map various brands on The Loyalty Continuum:

No Brand Land: No Brand Land is wrought with challenges, and this is a place most small businesses find themselves. Companies in No Brand Land are often stuck working in their business rather than on their business, and they don’t ever develop a solid idea of who they are, what they offer or stand for, or how they can improve their customer experience. These companies tend to change what they offer—and who they are—at the first sniff of a new or different (often perceived as “better”) opportunity, and they don’t have any goals related to the customer relationship; their business is typically “all about them”—their service offering, the “extra buck” they can make, or the new challenge they want to conquer (without regard for how it affects their niche in the marketplace.

Leaky Brand: These companies have set up the basic identifiers: they have a name, a recognizable logo, a tagline, and perhaps a few other pieces of business collateral (brochures, etc.), but ultimately, they haven’t discovered ways of being distinct, memorable, or necessary to their customers.

Average Joe Brand: Here we enter the world of large companies who have marketing departments that actively advertise and sell to their customers. They often take their brand messages in too many directions, which dilutes their brands because of inconsistency and confusion to their customers.

Iconic Brands: Iconic brands are all around us. We shop them and love them—they are part of our culture. They’re easily recognized by their logo. These brands usually spend a lot of marketing money and are constantly monitoring their image and public perception. These iconic brands are top of mind brands and often dominate market share of a category: McDonalds, Microsoft, Dell, Coke, Pepsi, and American Airlines. Many national retail chains have loyal customers, but they don’t occupy an irreplaceable position in the consumers’ hearts.

Cult Brands: Cult Brands are in class of their own as they have mastered the art of building lasting and meaningful relationships with their customers. In the world of Cult Brands, the customer is not only king, but is part of the family. When you buy a Harley Davidson motorcycle, you are not just getting a bike—you’re getting a membership into The Club. These brands have no competition. They rule their customer-defined category. There are no substitutes for Oprah, Vans, Linux, Southwest Airlines, IKEA, Harley-Davidson, Apple, Star Trek, Jimmy Buffett, and Volkswagen Beetle. These brands are profitable even in the most adverse market conditions because of the powerful relationships they’ve forged with their customers.

March 15, 2012 by

Android: Google’s Next Big Move

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.

Where to go from here
March 13, 2012 by

Books to Help You Better Understand Word-of-Mouth

Good Gossip by Robert F. Goodman and Aaron Ben–Ze’ev

 

From Hand to Mouth: The Origins of Language by Michael C. Corballis

 

Blog! How the Newest Media Revolution Is Changing Politics, Business, and Culture by David Kline and Dan Burstein

 

Grooming, Gossip, and the Evolution of Language by Robin Dunbar

 

The Language Instinct by Stephen Pinker

 

The Virtual Community: Homesteading on the Electronic Frontier by Howard Rheingold

 

Growing Up Digital: The Rise of the Net Generation by Don Tapscott

 

Six Degrees: the science of a connected age by Duncan J. Watts

 

Related Links

“Meet Joe Blog”

by Lev Grossman

Article from Time on the popularity of blogs.

“We are the web”

by Kevin Kelly

Wired article on the increase of individual power on the Internet.

“The law of acceleration returns”

by Ray Kurzweil

iPod’s Dirty Secret

by The Neistat brothers’

The Neistat brothers’ popular video on the iPod battery.

“The real slant on gossip”

by Robin Westen

Psychology Today article on the benefits and purpose of gossiping.

“The book stops here”

by Daniel H. Pink

Wired article on Wikipedia.

“Ubiquitous message technology can be powerful tool for good or ill”

Technology Review article on text messaging.

“New Zealand students may ‘text-speak’ in exams”

Report on national exams in New Zealand allowing text message abbreviations.

 

Internet User Statistics

Technorati

Blog search engine.

Wikipedia

Wikipedia encylopedia.

Second Life

Wikipedia overview of Second Life.

“Educators explore ‘Second Life’ online”

Second Life community as an educational tool.

March 12, 2012 by

Why Brand Models Are Important

You have a big family reunion at your home next week. Big decision: Do you set up for a BBQ outdoors or plan for an in-house venue? An outdoors event makes life easier, but what if it rains? Should you invest the money in an outdoor canopy?

Although we don’t have crystal balls to predict the future, we have meteorological modeling to predict the weather. Looks like clear skies on Saturday. Does that mean it won’t rain? Of course not. Models are predictive, but they are not 100% accurate. The more advanced and effective the model, the more accurate its predictive capabilities.

Most mega-brands have their own way of modeling their brands. The purpose of a brand model is to predict consumer behavior. Without a brand model you’re left with major uncertainty on how your present decisions will affect your customers in the future.

There’s a staggering amount of information that crosses the average executive’s desk each day. A brand model helps you focus on what’s most important to the growth of your business, screening out the noise.

What does an effective brand model give you?

An effective brand model is a representation of the most important elements that drive your business. Modeling the brand offers your business four important benefits:

  • An effective brand model describes the consumer’s mindset, attitudes and behaviors toward your brand.
  • An effective brand model predicts the future, turning “what if” questions into observations to consider for future action.
  • An effective brand model provides you with information about what is needed to reach your goals with consistent standards.
  • An effective brand model offers a synthesis of everything your brand does and a quintessential framework for evaluating decisions.

If your chief competitor models their brand and you don’t, you will lose to your competitor over time. Alternatively, if you have a more effective model than your competitor, you will likely gain market share over time.

The benefits of an effective brand model

An effective brand model helps your leadership team:

  • Make better decisions. Better decisions leads to financial results.
  • Quickly pinpoint changes in trends and your “consumer ecosystem” and adjust your strategies in order to stay ahead of your competitors.
  • Uncover emerging consumer needs and highlight where to innovate.
  • Identify what strategic actions will have the greatest impact on your brand (based on the model’s descriptive and predictive power).
  • Solve challenging industry problems. Data without context leads to white noise. A brand model filters erroneous data to help you clarify the problem.
  • Clarify the role marketing, advertising, innovation and the rest of your brand’s assets play in the mind of the customer.
  • Organize and structure information that CEOs, CMOs and brand managers need right away.

The benefits of modeling your brand are plentiful. The potential drawback is that your model isn’t always going to be right. Plus, if your model doesn’t address the human element of your business you’ll end up making decisions that may produce short-term revenue by sacrificing long-term, sustainable profitability.

Of course, not all brand models are created equal.

A solid brand model provides five important advantages in growing your business:

  • Accurate predictions. A solid model gives you accurate predictions of consumer behavior. For example, Harley-Davidson tries to produce only one more motorcycle than they expect to sell—talk about tight inventory!
  • Details on execution. A solid brand model provides a description of the essential details needed to serve your best customers. Harley-Davidson’s brand model provides a structure of how Harley Owners Groups (HOGs) can best operate their chapters.
  • Solution indicators. A solid model provides accurate descriptions of the solution when the problem is solved. Because HOG has a model of what their groups look like at their best, they have a model to measure other groups against.
  • Clarity and direction. A customer-centric model shows you what actions will have the greatest impact on your core customers. If you know the emotional outcome that customers get from doing business with you, you can eliminate anything that doesn’t ladder up to that outcome.
  • Customer-centric innovations. An effective model decodes what your customers want. It will track how people feel about your brand and provide the insights necessary for new product and service innovations. If an auto parts shop knows that time is a major factor for its customers, it can focus on ways to make shopping faster and easier.

Executives often make up what they want to hear. Brand modeling helps you determine if what you’re doing is actually working. Instead of going exclusively with gut emotions—or with just doing what you’ve always done—an effective model can more accurately tell you what’s really going on with your business, with your customers, and in your industry.

Brand Model 3.0

The exclusive focus of the Cult Branding Company is the on-going development of the Brand Model 3.0 for major enterprises committed to serving their customers.

Brand Model 3.0 is the only brand model that focuses exclusively on the importance of decoding the psychological drivers of a brand’s best customers. Our research and experiences working with major corporations demonstrates that focusing on your best customers—your Brand Lovers—is the best way to drive long-term profitability, growth and sustainability for ANY business.

Learn more about Brand Model 3.0 here.

March 9, 2012 by

The Power of Cult Branding – Book

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

March 9, 2012 by

So what is branding really all about?

Listen in as brand expert BJ Bueno educates the Newspaper Association of America on the essence of branding.

Harness the Power of Your Brand (Pt. 1)



Harness the Power of Your Brand (Pt. 2)

March 9, 2012 by

Cult Branding Done Right: IKEA

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.



How does IKEA do it?

Knowingly or not, they follow the Seven Rules of Cult Brands.

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.

March 9, 2012 by