Afraid to take a page out of the lifestyle brand playbook? Those days are over.
This is the first in a multi-part series on the rapidly maturing “lifestyle brands” and how their customer- and community-focused strategies are redefining what it means to be a successful business.
It has become a cliché to say that the pandemic is giving way to new ways of doing business. One that hasn’t been talked about enough and has been an obsession of mine recently is how the path to sustained growth (by growth I mean more market share and revenue) has changed dramatically in the last few years. Any basic textbook on entrepreneurship and scaling will tell you that you must first have a great product that fits the market. Find customers, convert them into loyal customers, and then refine or expand that product, or take their learnings to develop new products.
That road is done. Welcome to the age of purpose-driven growth.
Companies are defined by the power of purpose
Companies are defined less and less by the quality of their products and more by the power of their purpose. This is changing the way companies must plan for growth.
Today, after launching into entrepreneurship with a great product, the next step is not to build as big a target market as fast as possible and then refine and expand the products, but to go in the opposite direction: Build a niche brand, and then build a lifestyle brand.
In 2008, WIRED magazine co-founder Kevin Kelley wrote an influential article on branding titled “1,000 True Fans.” Kelley argued that an entrepreneur needs only about 1,000 true fans, those defined as raving repeat customers, to build a successful business for themselves. This, in essence, is the underlying basis for what are now called “niche brands”: building not a good product for the many, but a perfect product for the few.
With the rise of highly personalized ad targeting campaigns thanks to innovations in marketing technology, niche brands experienced unprecedented success in the 2010s. Brands like Jacamos (clothes for tall men), Lefty’s for left-handers) and August (services for homeowners who rent their homes) generated results and legacies their founders could be proud of.
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Lifestyle brands stand for something
For the super-ambitious entrepreneur, however, niche brands beg the question: is it possible to harness the power that comes with a highly curated community of customers and combine it with the knowledge of much larger brands? The answer, as we’ve seen recently, lies in the rapid rise of what I call “lifestyle brands.”
Lifestyle brands are just as customer and community driven as their niche brand counterparts. And therefore, they are defined by the consumers they do not do business with. For example, in the world of niche brands, a right-handed person would try in vain to find a good pair of scissors at Lefty’s. However, lifestyle brands define who their communities are and who they are not by purpose and mission, not by product. Many lifestyle brands cater to righties and lefties, but in different senses of those words.
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In short: lifestyle brands stand for something. And they don’t really care if you stand up for it too, because they know there are a lot of people who do.
Lifestyle brands share 4 key traits
So what do lifestyle brands look like in practice? From my perspective, lifestyle brands share four key traits:
They harness their purpose as an engine to drive mass awareness. People often know what lifestyle brands stand for before they know the intricacies of their product. A recent well-known example of this is Patagonia, which has made very public statements about the types of customers it doesn’t want. Another example is Apple, which has made privacy its top public priority. (Take their most recent product launch.) It is through their purpose that they cross the chasm from the niche to a company known on a broader level.They are ruthless in their pursuit of client and community advocacy. The YETI beverage brand’s lifestyle ethos is evident through its corporate hashtag: #BuiltForTheWild. A quick visit to their website shows how much they invest in their community. Instagram photos of customers are front and center. They have recruited a great network of customer ambassadors that you can read about. And they’ve created high-quality content ranging from movies to podcasts to magazines that would be completely uninteresting to anyone who isn’t a fan of the great outdoors. The result? Find someone who has bought a piece of YETI drink, and I can guarantee you that they have three or four more in their house (or cabin).The biggest and most product-oriented brands struggle to be associated with them. Amazon has partnered with Black Rifle Coffee to promote its new Navy SEAL action-thriller series, “The Terminal List.” Philips Norelco teamed up with Barstool Sports to promote their OneBlade Face + Body and Shaver 6000. My personal favorite is the seemingly paradoxical partnership between Nike Athletics and Ben & Jerry’s. Because they represent certain beliefs or philosophies, lifestyle brands have such an influence over their target customers that larger brands are drawn to them like magnets, seeking to tap into a new audience or further ingratiate themselves with existing customers by saying: “Hears! We also subscribe to the same belief system as this lifestyle brand (sometimes when it suits us)!”Swag becomes a legitimate source of income for lifestyle brands. Say what you will about bumper stickers, but they are the ultimate expression of beliefs and political views for many people. If you see a brand logo decal on a car bumper, it’s likely representative of a lifestyle brand. Similarly, is the brand’s clothing section featured prominently on their website, but they’re not known for their clothing? It is a lifestyle brand.
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The Case for Lifestyle Brand Success
One of the reasons business leaders are afraid to follow the lifestyle brand strategy is the concern of alienating potential customers by upholding certain beliefs or an ethic so strongly. To this end, I wanted to list some economic reasons why the lifestyle brand approach is preferable (particularly with a potential recession just around the corner).
First of all, the most valuable marketing channel for lifestyle brands is their existing customers. Customer referrals are famous for being the cheapest and highest quality source of new customers. When executed correctly, lifestyle brands can trust existing customers to tell their friends and family about them. This natural flywheel cuts costs in other areas of marketing, such as advertising. Additionally, happy customers are repeat customers, so lifestyle brands can confidently rely on higher customer lifetime value numbers than other brands. Second, lifestyle brands can charge more for products than the competition. There are many YETI competitors offering cups at significantly reduced prices. But when customers buy YETI products, they also do so to show others what their beliefs and values are, which are worth much more than the product itself. There is a third benefit that is a direct result of being a customer-first company. with high brand equity: These brands can be more resistant to recession and inflation than others. Due to strong customer loyalty, inflation-related price increases are likely to have a minor adverse impact on lifestyle brands. Additionally, customers are more likely to stay with them if they need to cut product or service lines due to economic circumstances. Ultimately, brands that laser-focus on a smaller set of customers are better able to “leverage” brand equity from time to time, having developed stronger relationships with said customers.
Afraid of alienating customers? those days are gone
There was a time in the not-so-recent past when even the mention of pursuing a lifestyle brand strategy would send business leaders for the hills. Why risk alienating any potential customer by standing up for a belief?
But those days are over. Consumers want brands to take a stand. They want to understand that there are real people with real feelings behind the scenes at companies who are using their resources to convey a more ideal way of life, whatever that means to those people.
In my next article, I’ll dive deeper into concrete strategies for companies to mature through the stages of development from product leader to lifestyle brand. This path to growth will define the next era of business and how consumers expect to interact and engage with businesses.
Source: www.cmswire.com