Going From Brand to Religion
Archives: Daily Issues
Issue# 2689
- WEALTHY: False profits at big banks? (Andrew Gordon)
- HEALTHY: The enzyme that can keep you young (Shane Ellison)
- WISE: Douglas Atkin on the potential of brands
ALSO IN THIS ISSUE:
- 3 keys to becoming a cult brand (Michael Masterson)
- Are you in the right place? (W. Clement Stone)
- It’s Good to Know… about seniors on the Internet
- dd “proselytize” to your vocabulary
* Highly Recommended *
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The Banks Are Back… or Are They?
Their profits are up. Their write-downs are lower. The government is riding shotgun for them. And the worst is over.
The banks are back, right?
Goldman Sachs, JP Morgan, Bank of America, Wells Fargo, and even Citigroup all reported profits for the first quarter of 2009. But a closer look under the hood reveals some “creative accounting”…
- Bank of America arbitrarily increased the value of its Merrill Lynch assets.
- Goldman Sachs bunched much of its losses into the month of December – a month it skipped reporting on this year.
- JP Morgan’s bonds fell in price. And that perversely allowed the bank to increase its bottom line.
Most of the banks did extremely well in fixed-income, currency, and commodities trading this past quarter. So is this the new bank model? Making boatloads of money from Forex and bonds?
Not likely. It looks more like a one-time bonanza to me.
The Fed and European central banks were broadcasting their quantitative easing efforts. It’s not hard to make money when the government is telling you which way rates are going. But now that the run-up to quantitative easing is over, making those oversized profits will get a lot harder. So where else will the banks be getting their money?
A bank’s loans are only good assets if they get paid back. And the brutal recession we’re having is forcing more and more loans into default. When their loans go into default, banks go from earning money to spending money. Each foreclosure, for example, costs a bank about $50,000.
The banks still have some tough sledding ahead.
[Ed. Note: Andrew Gordon is an investment analyst with decades of experience watching the markets. Get his take on the economy, under-the-radar investment opportunities, and more with Investor's Daily Edge, ETR's sister publication. Get your free subscription here.]
“Brands have the potential to become the new centers of community.”
- Douglas Atkin
Going From Brand to Religion
My wife K is a member of a cult. As a loyal member, she never gives up an opportunity to proselytize. Over the years, she has recruited our sons and most of her friends into her religion.
The cult she belongs to is represented by a symbol. It has distinct colors. It has a special language that other cult members recognize. They love their religion. They worship at its altars. They sing its praises. They believe that anyone who is not a member of their cult is silly, stupid, or foolish. And they will argue with you if you say one word against it.
When this cult asks for contributions, they give and will give again. They are happy to do it because it confirms in their minds that they have chosen the right moral path. To give, for them, is infinitely better than to receive.
I am talking about the Apple computer cult. My wife and children are Apple users. And though I have happily used PCs for many years, I can feel the day coming when I will yield to their influence and join them on the higher ground.
Apple is probably the best example of a brand that has achieved cult status, but there are others. LL Bean is one. So is Oprah. And The Grateful Dead. Volkswagen is another. Star Trek is another. BMW is halfway between a brand and a cult. So is Mercedes. And Juicy Couture. And Polo.
The difference between a brand and a cult is the level of passion its customers feel about its products. That passion translates into making easier front-end sales, more back-end sales, and far fewer refunds. It also means more word-of-mouth sales, fewer public relations problems, and higher customer satisfaction.
Wouldn’t it be great if you could turn your customers into fanatics? Wouldn’t it be terrific if they were so loyal to you that they would never even think of buying a product from one of your competitors?
How cool would it be if your customers fervently defended you against any and all criticism? How much richer would you be if your customers actively promoted your products to everyone they knew?
If you are wondering how you could turn your business into a cult, you are thinking smart. It’s not easy to create a cult brand – especially for a small-businessperson – but the closer you can get to it the more successful you will be.
So what does it take?
That’s what we’ll talk about today. I don’t have all the answers. (If I did, ETR would already be a cult.) But I’ll tell you a few of the things I’ve figured out, and you can let me know if you have other ideas. Together, we can figure this out.
The first thing that comes to mind is that most cults have charismatic leaders. I’m not sure how well this applies to businesses, though. Steve Jobs is interesting, but I’d hardly call him charismatic. Still, there certainly are examples of strong personalities in the information-publishing industry.
One of the most successful investment newsletter writers back in the 1980s was Howard Ruff. He was a Mormon conservative from Utah who believed that the road to salvation was paved in gold: gold bullion and gold mining stocks. He was immensely popular in his day, with more than 100,000 subscribers to “Ruff Times” who did virtually everything he said. They bought all his products – even the record he made singing hymns and inspirational songs. And they kept renewing his newsletter despite the fact that he had a very bad record of picking stocks.
They loved him because he espoused an idea they had about the world – that it was going to hell in a liberal handbasket and that those who stuck with “hard money” would eventually be saved. He was a brilliant writer. He spoke clearly. He articulated a strong point of view. He was both humble and megalomaniacal. He was, in short, a guru.
I can name a dozen super-successful investment advisors who have since fit into that mold. Doug Casey, Jim Davidson, John King, Steve Sjuggerud, and Porter Stansberry, for example.
Dr. Robert Atkins was the Howard Ruff of the alternative health publishing industry. He was a visionary as well as an immensely gifted communicator. He challenged the American Medical Association power structure by advocating a low-carb diet. He was pilloried in the press but adored by his following. Eventually, he was proven right.
Following in his footsteps were Andrew Weil, Julian Whitaker, Joseph Mercola, Al Sears, and Mike Adams – each with his own unique view of how to achieve perfect health through natural medicine. And they all became very wealthy by developing fanatically loyal followings that bought virtually everything they sold.
So that is one element of cult-like branding: having a charismatic visionary to spread the word.
But not every cult-like brand has a guru at the top. Who knows who heads up LL Bean? Who can name the mind behind BMW?
The Oxford Club is an example of a very strong brand (not quite a cult, but getting there) that doesn’t have a single guru. But it has always had very good thinkers at the helm of its investment advisory panel. And its members seem to respond to them serially, which means that something else is at play.
What’s working for the Oxford Club – and I’d call this the second most important element of cultish branding – is a worldview that is contained within the unique selling proposition of the product franchise. In the case of the Oxford Club, it is the view that the world of investing is unfairly tipped toward the elite and only by associating yourself with elite investors can you hope to achieve the investment results the elite enjoy.
LL Bean doesn’t have a guru at its helm, but it definitely projects an image of how to dress for success. It is practical. It is outdoorsy. It is quality. Every time an LL Bean buyer slips on a moccasin, he feels that he is making a statement about himself as a practical, outdoorsy, and quality person.
Think about your company and the products it sells. Is it clear to your customers what worldview it expresses?
Another element of cultishness is language. Religions use unique terminology when referring to important concepts. These shibboleths are well known to the faithful but mysterious to outsiders, which lends them a magical power that ordinary words wouldn’t have.
A very successful financial guru named Harry Schultz practically created his own language when talking about economics and investing, including unusual spelling that was difficult for the uninitiated to interpret. Bill Bonner does a good job of this in his Daily Reckoning with neologisms like “lumpeninvestorat” (to describe the average “dimwitted” investor) that his readers understand and enjoy.
Matt Furey uses a mix of Chinese and wrestling terms to keep his readers linked to him. And Jim Cramer has a unique vocabulary that millions of Americans relate to. Cramer also has a host of little rituals – like clanging bells and whistles – that have become part of the cultish nature of his mega-popular TV show.
That’s another thing most cultish brands have in common. Ritualistic tools and symbols that eventually become closely associated with the big message and provide followers with Pavlov-like stimuli. The guru will use them when needed to evoke an emotional response. His followers can’t help but respond on cue.
Religions and religious cults have fundamental tenets. (Heavens Gate members believed that the Earth was about to be “recycled.” Christians believe that Jesus Christ was the Son of God. Scientologists believe that souls are reincarnated.) They also have traditions. (Orthodox Jews walk to Temple on the High Holy Days. Muslims make a pilgrimage to Mecca. Mormons wear special temple garments under their clothing.)
Cultish brands can create tenets and traditions too – prevailing beliefs and ritualistic actions that come to have symbolic meaning. When such actions are tied to products, the result is instantaneous sales. In the 1960s, for instance, fans of The Grateful Dead would follow the band around the country, trying to attend as many shows as possible. Some “Deadheads” even started selling food and clothing at Grateful Dead concerts to finance their pilgrimages, and freely exchanged recordings of past live performances.
Apple lovers are very anti-PC. They will always spring for the updated model of the iPod, iPhone, etc., waiting in line for hours on release day if necessary.
Oprah fans buy anything she recommends, propelling books high up the bestseller lists and crashing websites with a rush of orders.
These are some of the elements of cults that can be put to work for your business. I’ve been thinking about how to make them work for my clients, and I have a few suggestions for you:
- The guru must be authentic. He must believe he has a better way to live, and he must be able to continuously recreate his vision in the form of new and interesting products.
- The worldview of the franchise must be one that is both emotionally compelling and intellectually avant garde. It has to provide a sense that this is a new and better way to live. It must be forward thinking but not too far “out there.” It must be a tipping point worldview. Then it will sell.
- The language and rituals and tenets of the brand must be easy to understand and fun to use. Most developed religions lose the fun of their franchises over time. But when they start out and bring in loads of new believers they are always, in some way, fun.
That’s what I have so far.
What do you think helps transform a brand into a cult? Let me know what you think right here, and we’ll figure out how to build on our ideas and make your business a little Apple or LL Bean.
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Worth Quoting: W. Clement Stone on What’s Holding You Back
“You are a product of your environment. So choose the environment that will best develop you toward your objective. Analyze your life in terms of its environment. Are the things around you helping you toward success – or are they holding you back?”
Defy Aging DNA the Easy Way
By Shane “The People’s Chemist” Ellison
When they’re 65 years old, most of your friends will be sitting idle in an old folks home, counting the weeks by the number of times they play bingo. But not you. If you learn how to boost one single enzyme in your body, you can defy aging the easy way. You’ll be traveling the world, maybe parachuting for the first time or perhaps starting a highly profitable business.
That enzyme is telomerase.
Telomerase acts as a shield for your genetic blueprint – DNA (deoxyribonucleic acid). It protects it from getting shorter and older. The more telomerase you have, the healthier and stronger you are.
One of the best ways to preserve or enhance your body’s telomerase production – and your functional lifespan – is to limit your food consumption to three meals per day. This helps to optimize your “hormonal intelligence” – which, in turn, preserves the enzymes that shield DNA from premature aging.
The trick to limiting your food consumption is to eat foods that are not only satisfying but also have a minor effect on the output of insulin (the fat-storing hormone). This would include avocados, grass-fed beef, coconut oil, seeds, nuts, and eggs.
[Ed. Note: Shane Ellison's (www.thepeopleschemist.com) entire career has been dedicated to the study of molecules - how they give life and how they take from it. He was a two-time recipient of the prestigious Howard Hughes Medical Institute Research Grant for his research in biochemistry and physiology. He is a bestselling author, holds a master's degree in organic chemistry, and has first-hand experience in drug design. Take advantage of his knowledge and insights to look and feel your best in 90 days.]
* Highly Recommended *
Don’t Get Mad at Wall Streeters… Get Rich Off Them
Are you a disillusioned stock market investor?
Or maybe even just a “regular” Joe or Jane alarmed by the economic woes reported daily on every TV channel, radio station, the Internet, newspapers, and magazines?
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We don”t sit around bad-mouthing fat cats or lamenting our lost dollars.
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It’s Good to Know: Seniors on the Internet
Contrary to popular belief, many of the 17 million Americans over the age of 62 are online and doing much more than e-mailing pictures of their grandchildren. And (pay attention, marketers!) they do respond to Internet advertising. According to a study by Focalyst and Dynamic Logic, they are most responsive to ads for pharmaceuticals and insurance, as well as travel and entertainment.
As for their habits online, here’s the breakdown:
- 43 percent get news and weather.
- 41 percent make travel plans and reservations.
- 23 percent pay bills.
- 21 percent play games.
Word to the Wise: Proselytize
To “proselytize” (PROS-uh-lih-tize) – from the Latin – is to convert (or attempt to convert) a person from one belief, doctrine, cause, or faith to another.
Example (as used by Michael Masterson today): “My wife K is a member of a cult. As a loyal member, she never gives up an opportunity to proselytize.”
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My Dad was a “Ruffian” in the late 1970’s, and went with Charles Givens somewhere in the late 1980’s. He would frequently warn us that the world was going to end, and “WE’RE ALL GONNA DIE!!” I don’t know who he follows now, but we didn’t.
There are a number of those “gurus” around, and for different reasons. Admittedly, I’m a devotee of a few “gurus” (some from The Food Network) but I think the key is offering something, whatever that is, that resonates with people. Oprah, Ruff, etc., they all resonate with certain people on specific subjects. Suzanne Somers is a particular favorite of mine, both for her cookbooks and her interest in and devotion to health, specifically bioidentical hormones. Someone else might sniff at Suzanne, but be a devotee of Bob Vila. . .you get the idea.
“So what does it take?”
What’s your question??
Isn’t it really:
So what does it take to start a cult?
That is a weird question. Where does ETR draw the line on that one?
“L’Union fait la FORCE” & “Can contribute To
Worthwhile Charities” and can Help and Guide
Members to Prosperity !
I think that the ‘guru’ has to be consistently intelligent. If someone I generally read has a tendency to rant, I am less inclined to read through everything they offer.
There must be the “marvelous element”, which every archetypal narrative has.