What Are Cult Brands?

Cult Brands have mastered the art of building meaningful, long-term relationships with their customers. Cult Brands exist in every industry. The list of Cult Brands includes companies that have absolutely nothing to do with computers or smartphones:

Did you notice: In each of these examples, we explained to you what the Cult Brands do. In every instance, the explanation was very likely totally unnecessary. You don’t need us to tell you what these Cult Brands do. They are generally so well known that both their branding and offerings have become part of our cultural knowledge.

Simply saying these Cult Brand names tends to evoke an understanding of the visuals and values associated with the brand. This is an understanding that transcends all of the barriers humanity uses to categorize itself into groups: socio-economic, cultural, even language.

Cult Brands aren’t born: they’re made. They all started life in relative obscurity. Steve Jobs planted the seed that eventually became Apple by selling computers he hadn’t built yet in order to raise the money to pay for the parts he needed to build the computers.

The first year that Harley-Davidson was in business, they sold three motorcycles.

Ingvar Kamprad, the founder of IKEA, went into business with a handful of matches he’d bought cheaply in Stockholm.

John Deere started with a single steel plow in Illinois.

Lots of companies have humble beginnings, yet few make the journey to greatness.

The Benefits of Being A Cult Brand

Being a Cult Brand gives businesses significant competitive advantages:

  • Cult Brands are perceived as being the high-value option within their industry; generally, they are the standard that their competitors are judged against.

  • Cult Brands tend to command premium prices, which has an obvious positive impact on profitability.

  • Cult Brands attract new customers at a higher rate than their competitors, and they keep those customers for a longer period of time.

  • Customers tend to do more business, more frequently, with Cult Brands, and they enthusiastically recommend the brand to their family and friends.

  • Cult Brands are the brands customers buy “automatically”: in many cases, they are not only the default option, they are the only option in the minds of their customers. Cult Brands command such fanatical loyalty that when, for whatever reason, they are not available, a customer might wait rather than switch to another brand.


Cult Brands Have Staying Power

Do you remember Beanie Babies? What about Mortal Kombat or TickleMe Elmo? Do Furbies ring any bells? What about America Online?

There’s a difference between fads and Cult Brands. People often get the two confused, but they’re really two very distinct phenomena.

Fads are short-lived bursts of extreme consumer enthusiasm, generally for a specific product or product line. Fads are typically youth-oriented, appealing mainly to teenagers and young adults. Fads have short lifespans, ranging from a few weeks to a handful of years.

Cult Brands enjoy sustained extreme consumer enthusiasm. This enthusiasm is not tied to a specific product or product line, but instead tends to extend to the entire organization, including their iconography and messaging.

Brand Lovers of Cult Brands can be any age. The appeal of Cult Brands endures. Many Cult Brands have been in existence for more than 40 years.

Cult Brands Are Not Infallible, But They Know How To Recover

We’ve spent a lot of time talking about what Cult Brands are, but it’s very important to understand what Cult Brands are not. Cult Brands are not perfect. To err is human, and business is fundamentally a human enterprise.

Every brand we talk about on this blog, and look to as an example of how to do things right, has also done things wrong—in some cases, really, really wrong.

Harley-Davidson is a great example. If you’re not a biker, you might think that Harley has always been a major player in the heavyweight motorcycle industry, and that they’ve always had the sterling (or perhaps chrome!) reputation that they enjoy today. But nothing could be further from the truth.

The sixties were a tumultuous time for America, and they were a terrible time for Harley-Davidson. There was a veritable flood of Japanese motorcycles entering the marketplace, featuring low prices and superior quality. At the exact same time, Harley motors, as a result of a cost-cutting sourcing decision, were becoming notorious for their poor performance and unreliability.

This was not a sustainable situation. Harley-Davidson was headed for that Great Big Junkyard in the Sky, but luckily for bikers everywhere, the brand had a strong core of Brand Lovers who were willing to step up and try to save the company they loved.

CEO Vaughn Beals, joined by a dozen of his colleagues, went all in to save Harley-Davidson. Their $81.5-million leveraged buyout was a bold move, and a big gamble. Would they be able to make the changes the brand had to make in order to recover the customer enthusiasm that had been lost?

You know the answer to this question. Today, Harley-Davidson is a dominant player in the heavyweight motorcycle industry. They control more than half of the domestic marketplace, and a third of the global. The company’s current valuation is $12.4 billion. Not a bad return on $81.5 million.

The Seven Golden Rules of Cult Brands

How did Harley-Davidson’s leadership team create this turnaround? They followed the Seven Rules of Cult Brands. We’ll be illuminating those Seven Rules in the weeks ahead. So stay tuned.

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