The Power of Cult Branding:
In Search of Your Best Customer

By BJ Bueno & Scott Jeffrey

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.

Read other articles and learn more about BJ Bueno and Scott Jeffrey.

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