Matthew W. Ragas - The Power of Cult Branding: How 9 Magnetic Brands Turned Customers into Loyal Followers (and Yours Can, Too! )

Praise for
The Power of Cult Branding

An essential guide for marketing in the 21st century.

A LAN M. M ECKLER,
chairman and CEO, Jupitermedia Corporation

Ragas and Bueno teach us the real principles of creating a symbiotic loyalty between our customers and our brand. We need to make our customers partners.

P HIL L EIGH, vice president of
digital media research,
Raymond James & Associates

A masterfully instructive book on what it really takes to build a powerful brand today. It should be required reading for students at the countrys top business schools. I recommend it wholeheartedly to entrepreneurs, executives, visionaries, and managers, who should not just read it, but also live by it!

E dward P. N ED G RACE III,
managing director, Grace Venture Partners

Copyright 2002 by Matthew W. Ragas and Bolivar J. Bueno

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage or retrieval system, without written permission from Random House, Inc., except for the inclusion of brief quotations in a review.

Published by Crown Business, New York, New York.
Member of the Crown Publishing Group, a division of Random House, Inc.
www.crownpublishing.com

CROWN BUSINESS and colophon are registered trademarks of Random House, Inc.

Originally published by Prima Publishing, Roseville, California, in 2002.

Interior diagrams by Mike Tanamachi

Library of Congress Cataloging-in-Publication Data
Ragas, Matthew W.
The power of cult branding : how 9 magnetic brands turned customers into loyal followers (and yours can, too!) / Matthew W. Ragas, Bolivar J. Bueno.
p. cm.
1. Brand name products. I. Bueno, Bolivar J. II. Title.
HD69.B7 R34 2002
658.827dc21 2002025818
eISBN: 978-0-307-78152-9

v3.1

To God and our families, friends, and loved ones.
Your love and support are immeasurable.

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Jimmy Buffett

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Linux

Harley-Davidson

Star Trek

Jimmy Buffett

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Apple Computer

Vans

Oprah Winfrey

Oprah Winfrey

Jimmy Buffett

Star Trek

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Harley-Davidson

Volkswagen

Oprah Winfrey

Linux

Apple Computer

World Wrestling Entertainment

O LD HABITS die hard. Even after living through the dot-com and Web implosions of 2000 and 2001, far too many marketers and entrepreneurs still seem to be in dreamland when it comes to the very important task of brand building. This frustrates the two of us to no end. Did those responsible for marketing and branding learn nothing from the hundreds of venture-backed technology startups that failed over the past twenty-four months?

We scratch our heads and really wonder.

Sure, we may no longer be blowing millions of our clientsor our ownmoney on flashy Super Bowl ads and extravagant launch parties, but many of us still havent put down the Kool-Aid entirely. We may all talk a good game at industry gatherings about learning great marketing lessons from the recent debacle, but we are an industry that is clearly still in denial.

Many of us are still trying to market our brands like its 1999.

How do we know this? Because every week we invariably encounter a company either through our consulting work or through scanning the business media that has just announced or is planning to announce plans to launch a massive new advertising campaign. Sometimes the companies making these announcements are small and unestablished, but other times they are entrenched multinational corporations. They all have an itchy trigger finger when it comes to advertising.

Of course, there is nothing wrong with advertising or ad campaigns. On the contrary, we are strong believers that even the most magnetic brand will eventually die a slow and painful death without some form of consistent advertising support. No, its the comments by these companies executives and marketing directors explaining why they launch these massive campaigns that really drive us up the wall.

Their rationale can generally be summarized as follows: Were launching this new campaign because we want to build our brand.

There is nothing wrong with wanting to build your companys brand, either. Brand building is a good thing. Whats idiotic about this thinking is that apparently a lot of executives in corporate America and on Madison Avenue still think the most effective (and perhaps the only) way to build a successful magnetic brand is to advertise and advertise and advertise.

After all, if you advertise to death, consumers will eventually have no choice but to fall in love with your brand.

Baloney!

When we see this behavior repeated again and again, it only confirms our belief that brand building is the least understood area in all of marketing. Effective advertising is only one small part of what a company must do to build a magnetic brand and establish lasting customer loyalty.

You dont have to take our word for it. Just look at what happened over the past three years to the majority of dot-com companies that excitedly burned through hundreds of millions of dollars in venture capital on splashy advertising to supposedly build the brand. If there was ever a group of companies convinced that nonstop traditional advertising was the key to brand building, it had to be these firms.

Surprise! Most of these dot-com companies were dreadfully wrong and are now dead and buried six feet under.

Many suffered from what we call the Revolving Door Syndrome. In other words, these firms paid huge dollars to get their initial customers in the door, but because their product or service produced a lousy or inconsistent brand experience, they lost those customers and had to spend more millions luring new ones. In trying to con the new customers, they neglected the ones they already had. Its not surprising that brand loyalty was virtually nonexistent in the old dot-com land.

While the two of us have always been fascinated with marketing, branding, and customer loyalty, weve both had experiences over the past four years that have really heightened our interest in this area. Having worked or consulted for numerous Internet companies during this time (some big home runs, some flameouts), we began to realize that perhaps the biggest factor in the downfall of the dot-com sector was its lack of brand-loyal fans. We think a loyal cadre of core repeat customers could have saved many a dot-com firm from ruin.

Every sustainable business must have a loyal core group of repeat customers. Its that simple. Build and sustain customer loyalty or die.