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My Book Reviews

Category: Marketing
Published: 2002
Read: 2005
Reviewed: Sep 2009

This book illustrates 7 rules on how to become a cult brand, including: creating communities, selling a lifestyle, being inclusive, and more. Along the way, the book also profiles 9 examples of some of the biggest cult brands around today, including: Oprah, Star Trek, Apple, Harley Davidson, the VolksWagon Beetle, the World Wrestling Federation, Jimmy Buffett, Vans Shoes, and Linux. The book is rather short (160 pages) and serves as an introduction to cult branding. Some readers who were looking for something more detailed were disappointed. While this is understandable, some of their criticism was unwarranted. One Amazon reviewer wrote:

"I bought the book but it was a waste of money because there was no informational meat to the marketing."

As the book points out, the idea of cult branding is based on the fundamental principles of psychology and sociology - that people are social beings that have a need for security, belonging, and social interaction. This means that cult branding is more of a philosophy than a technique. Complaining that this book didn't spoon-feed you marketing tips is like reading a philosophy book about the finding the meaning of life and saying "yeah, but they didn't tell me how". The purpose of philosophy is not to give you the answers, it's purpose is to teach you how to ask the right questions. Cult brands ask their customer how they "feel" when using their products, while other companies don't care how you feel - they simply ask if you are "satisfied". A cult brand offers an emotional experience, and not just a tangible product or service. Another Amazon reviewer wrote:

"Sure I picked up some nifty tidbits about how big companies have done some "revolutionary" things, but it really comes down to customer service and doing what's right rather than what could create the highest profit margin."

This person completely misses the point. There is nothing "revolutionary" about motorcycles (Harley Davidson) or shoes (Vans). This person is like 99% of small business people give who give no thought at all to branding. They are usually task-oriented people who look at branding as a strategy that is solely reserved for global companies. They don't realize that a cult brand can be something as simple as a local restaurant.

As an investor, this is a good example of a business book that can educate you about an issue that you probably don't pay enough attention to. Branding is a concept that many investors give little (if any) thought to when doing their analysis. You often hear investors talk about a certain stock being attractive because it is "such a great company". But learning about cult branding can help clarify why some of these companies are so great. People who simply chalk it up to great management or operational efficiency are sometimes not fully grasping the concept of cult branding. Perhaps the following fact will explain it better: since the publication of this book in 2002, Apple's stock has gone up 51-fold and their market cap has gone up by over a third of a trillion dollars. They didn't accomplish this feat simply because of "customer service", as the previous simple-minded review said. They did it because their status as a cult brand allowed them to charge 3 times as much as their competitors for commoditized electronics. This is why, when I value a company, I usually add a premium to a company's P/E ratio if they have a world-class brand.

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