Creating a cult brand is no easy feat. It requires a laser focus on your most dedicated customers – the brand lovers who appreciate more than just your product’s price tag. These customers are your most valuable asset and key to your brand’s longevity and profitability. Here’s why.
Research shows that attracting new customers can be five times more expensive than retaining existing ones. Yet, a loyal customer can be worth up to 10 times as much as their first purchase. This ‘customer lifetime value’ is a crucial metric that many businesses tend to overlook. Instead, they focus on short-term transactional customers who might be attracted by price but need long-term loyalty.
But why are brand lovers so crucial for cult brands?
Increased Profitability
A study by Bain & Company found that increasing customer retention rates by just 5% can increase profits by up to 95%. This is because your brand lovers are more likely to buy from you again, spend more on each purchase, and require less marketing investment to convince them to purchase.
Free Marketing
Brand lovers not only buy more, but they also promote more. According to the Word of Mouth Marketing Association, 92% of consumers believe recommendations from friends and family over all forms of advertising. Therefore, your brand lovers are your most effective and trustworthy promoters.
Resilience to Price Changes
Brand lovers value your brand for more than just its price. They’re less sensitive to price changes and more likely to stay loyal even when cheaper alternatives are available. This resilience provides your business with a reliable revenue stream, even in challenging market conditions.
Valuable Feedback
Your best customers are also your best critics. They’re more likely to provide valuable feedback, helping you improve your products, services, and overall customer experience. Their input can drive innovation and stay ahead of market trends.
Cult brands obsess over their brand lovers because these customers are the lifeblood of their business. They bring in more revenue, promote the brand, remain loyal, and provide valuable feedback. By focusing on these invaluable customers, brands can foster a community of brand lovers and build a solid foundation for long-term success.