How Do Cult Brands Create Loyalty? (Part 1) on the Make Business Matter Podcast

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Today, we release the sixth episode of our podcast Make Business Matter.

On this episode, I explore how Cult Brands cultivate customer loyalty. And, I reveal our latest thinking on the first three of The Seven Golden Rules of Cult Branding. In part 2, I’ll cover the remaining four principles for building a loyal following of passionate fans.

You can listen to the episode on the player at the bottom of this blog post (if you’re reading this in an email, you need to click on the link in the title to take you to the blog page to see the player) or you can listen and subscribe on the Make Business Matter website or on your favorite podcast app.

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Hello, and welcome to the Make Business Matter podcast where we help you turn purpose into profit and customers and employees into passionate fans. I’m your host, Aaron Shields, partner and director of research for The Cult Branding Company. On this episode, I’ll answer the question: how do cult brands cultivate loyalty?

On episode five, the previous episode, I looked at why most loyalty programs fail and examined how most programs aren’t based on true loyalty and, instead, just trying to get more and more customers to spend more and more without rewarding customers with things they actually want. On episode four, I talked about a particular type of brand that commands a highly loyal following: Cult Brands. These are brands that have mastered the art of building meaningful relationships. The customer is not only king, but part of the family. They understand that the brand isn’t just what they say, but how the customer perceives them. They’re profitable even in adverse market conditions because of the relationships they formed with loyal customers. In other words, they achieve trust, which leads to true loyalty, while other brands struggle to get customers to engage in their loyalty programs.

Even if you don’t want to go to the extreme of these Cult Brands and cultivating loyalty, there’s still things that can be learned from Cult Brands about developing relationships and loyalty that can be applied to any business.

What these Cult Brands do can be boiled down to seven principles. Tackling all seven was a bit too much for one episode. So in this episode, I’ll look at the first three principles, and then I’ll follow up in the next episode with the remaining four in tomorrow’s episode. These principles were originally mentioned back in 2002 in the founder of The Cult Branding Company BJ Bueno’s book The Power of Cult Branding.

A lot has changed in the business world since then. One Cult Brand failed to live up to its principles and is no longer in existence. In the wake of an emissions fraud scandal, VW started to focus on electric cars the same year it pleaded guilty to the fraud. The emissions fraud, which involved the diesel models of the Beetle, tarnished its reputation and what the Beetle stood for. Scott Keogh, appointed president and CEO of Volkswagen of America in the wake of the scandal, said, “Did it have an impact? Absolutely. And the reason it impact[ed] is we broke the trust. And if you look at what the singular thing the Beetle was so fantastic at: trust. It took millions and millions of families to school across America, to Woodstock, on and on. And the fact that this fiasco broke that trust is absolutely the most unsettling thing.”1

VW ceased production of the Beetle—a car that seems ideal for early adopters of the electric car market—the year after Keogh took over, likely because once trust is broken so massively, it’s hard for a brand to recover.

Even brands that have done so well at building trust and loyalty can erode it when they ignore what they stand for and what the customer wants.

Even though a lot has changed in business, these principles for cultivating customer relationships, gaining trust, and creating true loyalty have not. Although back then we referred to them as rules, now we prefer the term principles because rules are imposed from the outside, whereas principles come from an inner desire. And, we’ve rephrased and reordered them based on what we’ve learned studying and working with companies over the last 19 years. But, the essence of the principles remains the same.

Principle 1: Be Courageous. This was originally referred to as The Golden Rule of Courage. If you don’t stand out, people don’t follow. And, it takes courage to stand out.

Sameness is comfort for a company. When you play it safe, what you can achieve is easy to determine, but it’s boring. It doesn’t stand out. People are tired of being bombarded with products and services that all look the same, feel the same, and act the same by being the same. You can’t stand out and you can’t attract passionate fans because how can someone be passionate about something that appears the same as everything else?

Leaders of Cult Brands have the courage to be different. They aren’t content with the status quo. They are willing to take risks and make their brand stand out, often in the face of conventional wisdom. They’re often followed by the same companies that compete in the sea of sameness: once Cult Brands prove it works, many try to follow. But, leaders of Cult Brands are already focused on how they can take the next leap for the business and their customers.

This isn’t just about trying to be different: leaders of Cult Brands actually are different. They truly believe in what they stand for, that their products and services contribute to their customers’ lives in a meaningful way.

Before the original Star Trek series in 1966, Hollywood executives didn’t think American TV audiences wanted a serious, adult science fiction show, but Gene Roddenberry, the creator of Star Trek, took it seriously. They hired Harvey Lynn, a member of the renowned technology think tank RAND, to design the bridge of the Starship Enterprise. And, they never shied away from tackling controversial social issues: the first interracial kiss in TV history was on Star Trek in 1968.

The steadfast belief in Star Trek was with Roddenberry before an episode even aired. As I talked about in episode four, this commitment to Star Trek provided Roddenberry with the resiliency in trying to get Star Trek on the air. Briefly: He pitched it for six years before a studio took a chance on him. The show only lasted three years, but Roddenberry went on the Sci-Fi lecture circuit, evangelizing fans while it was in syndication. Six years later, he got a studio to take a chance on his dream of a movie. But, two years later they decided the budget of a TV format would make more sense. Eventually, after the success of other Sci-Fi movies like Star Wars and Close Encounters, combined with the fan base Roddenberry developed on the Sci-Fi lecture circuit, they believed in it enough to greenlight the movie, which launched the franchise into the success it is today.

Someone who didn’t deeply believe in what Star Trek stood for would have likely shelved the project at some point in its history.

To begin applying the principle of Be Courageous to your business, think about where your brand would be if it had no limits. It’s often easier to be courageous in the company of like-minded peers. So, if you’re working with other forward-thinking people, bring them in on the brainstorm. Don’t be afraid to dream big.

Principle 2: Solve Meaningful Customer Tensions. This was originally The Golden Rule of Human Needs, which really boils down to solving meaningful tensions in your customers’ lives.

Cult Brands focus on solving the primary tensions of the customers they have and they build products and services to continually address those tensions in better and better ways. They don’t get sucked into the trap of creating products and services that could hypothetically attract new customers that haven’t used them in the past or that have sworn off their services.

How do they know what tensions to solve? They listen. They look at the congregation of customers they already have; they respect the choir; they value their opinions; they listen to them; and, they reward them.

They never ignore an enthusiastic follower, no matter how odd they may seem. Companies that ignore enthusiastic followers of the brand—ones that may seem too extreme—usually don’t understand the tensions they are solving and the needs they’re fulfilling. Companies that don’t understand their customers’ tensions tell stories that don’t resonate with the customers.

Understanding customers can be tricky for many organizations because customers are the element of the brand that isn’t actually part of the organization. As we discussed with brands, leadership creates a vision that inspires employees, whose behaviors—through direct interaction and marketing—translate your brand to your customers. These elements influence each other and collectively create a perception about the company. That perception is the brand. The customer is the element that you have to make the extra effort to interact with and the one that you have the least control over.

Cult Brands don’t try to convert pagans—people that don’t believe in what the brand stands for and don’t value the tension the brand is trying to solve. Instead, they preach to the choir and try to satisfy the people that are already happy with them better than anyone else. These customers already listened to their messages, already know their products and the brand. They are much easier to get to buy than ones that have never interacted with a brand.

Guy Kawasaki, former Apple Chief Evangelist, said, “Revise your product or service for the people who are already adopting it, not for the people who say, for example, ‘if you only had a better quality print driver, I would buy a Macintosh.'”2

Cult Brands, listen to their customers’ discontent and create solutions that build strong enduring loyalty.

Take Amazon for an example: By listening, Amazon discovered that the high cost of shipping interfered with how often their customers made purchases. So, in 2005, they launched Amazon Prime, giving members unlimited free two-day shipping in return for a yearly fee. It’s an initiative that has been more successful than analysts predicted. And, they’ve kept improving the service to better meet the customer needs for convenience. Now there are over 200 million Amazon Prime subscribers and the typical member spends four times the amount as a non-member.3 And, they’re willing to pay for a membership.

A brand like Apple takes listening to their best customers even further by being their best customers. This is where many companies start but fall off somewhere along the way as they grow in size. In a 2008 Fortune interview, Steve Jobs said, “It’s not about pop culture, and it’s not about fooling people, and it’s not about convincing people that they want something they don’t. We figure out what we want.”4

Contrast this with most companies where employees don’t even use the products unless they’re forced to.

So how do you apply the principle of Solve Meaningful Customer Tensions? If you’re going to grow your brand, you first need to understand what main tensions you solve for your customers. Then, spend some time each day, even if it’s just a few minutes, viewing your company’s brand through the eyes of your best customers: will the direction the company’s going provide value to the customers by solving their tensions in a way that’s better than how you’re solving them today?

If you need help getting into their mindset, luckily customers aren’t shy about sharing their feelings, thoughts, and impressions about your brand on social media.

Principle 3: Be Distinct. This was originally The Golden Rule of Social Groups, which related to customers wanting to be part of a group that’s different. But what we realized is some people mistake it for being different just for the sake of being different. Instead, it’s about standing out in a way that’s meaningful in a way that makes your brand distinct from other companies in the same space.

This is really about giving your customers a license to be weird. Rick Ross, the cult expert, not the rapper, said, “I think that with many of these groups, such as diehard Elvis fans hanging out in Graceland, that becoming a member of these cult followings is kind of like receiving a license to be weird. You go out and find your kindred spirits—other people that would like to ‘be weird’ also—and then you can be weird together and basically feel weird no more.”5

Humans are social animals. Look at how addicted our society is to staying connected: phones, emails, social media. We have a perpetual need to interact. We want to belong to a community.

But, humans also want to stand out from the crowd and be seen as unique. People want to be weird, but they don’t want to be the lone weirdo. So people identify with and join groups that see some part of the world in the same way they do—groups that they see as unique. They get to fulfill both the need to belong and the need to stand out, often outside of the mainstream society.

Cult Brands help fulfill these needs in people’s lives and create groups based on their values, what they stand for, and the tensions that they solve for like-minded people. Since these groups are tied to relieving some tension in people’s lives and ways customers fill their needs and meaning in their lives, they often see these groups of surrogate families built around the products and services for like-minded individuals.

For companies that want to develop into true cult brands, they must start with a product or service that is distinct from the competition—one that seemingly has no replacement. In the mind of the social animals that are your customers, there can be no substitute for your brand and must stand in a class by itself. Your best customers—your Brand Lovers—must believe that no other product or service can come close to offering the same benefits.

In 1994, Oprah announced that she was going to abandon the sensationalism that pervaded talk shows at the time. She would no longer include tabloid topics and exploit guests. Instead, she would only offer solutions, not problems.

Many competitors probably thought she was crazy. Her ratings had begun to slip as she had started to look tame compared to other talk shows. So, the common wisdom would have been to make the show more extreme in the way shows like Jerry Springer were doing. But, she was determined to buck the trend and turn her ratings around by standing out from the crowd, rather than playing into it. She offered self-improvement instead of sensation.

In 1996, she helped build her community by starting the Oprah Book Club to nurture her fans and make them also feel unique. As pop-TV expert Dr. Robert Thompson said, “What she brought with the Book Club was this appetite people had out there to feel that they were engaging in something intellectually stimulating. Oprah acknowledges that you’re different and unique, but at the same time embraces you into this larger family of Oprah.”6

So how do you begin to apply the principle of Be Distinct? Start to look at how your customers are coming together naturally, and think about how you can make it easier and better for them to come together.

To recap, we looked at the first three principles Cult Brands use to cultivate customer loyalty. Even brands that are not looking to go full Cult Band can apply these principles to cultivate their customer relationships and build their brands.

Principle one is Be Courageous: Cult Brands don’t follow the norms of the industry. They have the courage to take risks.

Principle two is Solve Meaningful Customer Tensions: Cult Brands understand what primary tensions they solve for their customers and find ways to solve them over and over again.

Principle three is Be Distinct: Cult Brands create brands that have no substitute and cultivate the formation of like-minded customer groups around their brands.

In this episode, we looked at how Cult Brands cultivate loyalty. We’ll continue this exploration in the next episode and look at the other four principles Cult Brands use to create passionate fans.

If you’ve liked this episode, please help me out by subscribing to this podcast. And, if you’ve already subscribed and like what you hear, please leave me a rating and a comment.

Thanks for listening. I look forward to hearing from you. Until next time, I’m Aaron Shields and I hope you go out there and make business matter.

  1. Abby Narishkin and Steve Cameron, “Why Volkswagen stopped making its most iconic car, the VW Beetle,”, 2020.
  2. Matthew W. Ragas and Bolivar J. Bueno, The Power of Cult Branding How 9 Magnetic Brands Turned Customers into Loyal Followers (and Yours Can, Too!), 2002.
  3. Marc Bain, “Prime has never been more important to Amazon,”, 2021.
  4. Betsy Morris, “Steve Jobs speaks out,”, 2008.}

    This mindset was true while Jobs ran the company all the way back to the Mac. As Michael Schrage writes in Who Do You Want Your Customers to Become?: “What thrills and excites you should thrill and excite your customers.”[4. Michael Schrage, Who Do You Want Your Customers to Become?, 2012.

  5. Matthew W. Ragas and Bolivar J. Bueno, The Power of Cult Branding How 9 Magnetic Brands Turned Customers into Loyal Followers (and Yours Can, Too!), 2002.
  6. Matthew W. Ragas and Bolivar J. Bueno, The Power of Cult Branding How 9 Magnetic Brands Turned Customers into Loyal Followers (and Yours Can, Too!), 2002.
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