The power of cult branding

By B.J. Bueno & Scott Jeffrey

Some called them brave. Others called them crazy. The American motorcycle manufacturer born in a Milwaukee shed in 1903 was drifting 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.

On Feb. 26, 1981, 13 brave Harley–Davidson Motor Co. executives—led by Chief Executive Officer Vaughn Beals—decided to buy back their failing business in an $81.5 million leveraged buyout. These 13 had no choice: Turn around the company or let it die.

The merchant mindset

Most companies focus primarily on generating the next transaction. Customer loyalty is perceived as unattainable by companies that 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.

Companies with passion and heart build relationships with their customers. There are decision–making factors that far exceed factors such as price.

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 every day because of price alone? If so, why do you think people would drive 20 miles past their local KMart to shop at Wal–Mart? Both retailers have similar products with comparable prices. Wal–Mart made the customer its boss—an approach heralded by founder Sam Walton himself—and Wal–Mart’s loyal patrons felt it.

Cult branding defined

Few businesses go a monumental step further. A cult brand is born when a group of individuals rally around a brand’s lifestyle promise. Psychiatrist Carl Jung called it the participation mystique. These brands spark an almost magical loyalty within their customers. Customers embrace a certain way of being, aligned to a specific set of beliefs.

During the week, you may be worrying about production rates or flaws in a mattress design, but when you enter a Jimmy Buffett concert you morph into a Parrothead.

Problems, meetings 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, effortlessness, playfulness and self–sufficiency. Within any cult brand you’ll find B–values being awakened in their customers. Trekkie conventions and Mac user groups embrace the value of uniqueness. Margaritaville personifies a sense of aliveness and playfulness.

Unlike destructive cults that damage people and their surrounding communities, members of cult brands behave in constructive ways toward 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.

Few authentic cult brands grace the world, but we know who they are because their customers make sure we do: Apple, Harley–Davidson, Oprah, Ikea, Southwest Airlines, Linux, Vans, Star Trek, Jimmy Buffett, WWE and Volkswagen’s New Beetle. Cult brands have been in business for an average of more than 40 years, fueled by the people who love them.

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 buy your competitors’ products—takes conscious effort.

Embracing your brand lovers
Cult brands don’t 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. These brands are bold and courageous.

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 the Pareto principle applies: 20% of customers can drive more than 80% 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?

In case you’re wondering, those 13 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 customers’ quality concerns. More importantly, they worked hard to strengthen their relationship with their customers, forming in 1983 the Harley Owners Group (HOG)—an international customer club with more than 1 million devoted owners. Did their $81.5 million buyout pay off? A $10 billion company valuation seems to answer that question.

Cult brand expert B.J. Bueno and strategic coach Scott Jeffrey are managing partners at the Cult Branding Co., a brand loyalty consultancy whose clients include Kohl’s department stores, the L.A. Lakers and Turner Classic Movies. The original developer of the cult branding concept, Bueno is the author of The Power of Cult Branding, Cult Branding Workbook and Why We Talk. Jeffrey’s newly released book, Creativity Revealed, shows readers how to uncover the source of creativity and harness it for greater personal and business success. For more information, check www.cultbranding.com.

 

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