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August 29, 2019

Cult Brands Cash in With Extra Profitability. Here’s Why.

Tony Treadway

Creative Energy Develops Cult Brands


There are big money rewards for cult brands. Achieving cult status means higher profit margins and assuring repeat purchase behaviors at a significantly lower cost than new customer acquisition. These two benefits alone make every CEO and marketer envy those iconic brands who achieve cult status.

Just a 5% increase in brand loyalty
can nearly double a company’s profitability.

Here are some crazy stats. Just a 5% increase in brand loyalty can nearly double a company’s profitability. That’s because existing customers of a brand are five times more likely to purchase the brand again compared to one that has no relationship with the brand. Brand lovers buy more often and stay loyal without even considering a competitor’s brand.

One of Creative Energy’s cult brand CMOs recently calculated the cost of acquiring a single brand lover and the payback over the person’s lifetime. Estimating a $33 cost in marketing to acquire a new brand lover, the new convert will purchase $3,800 in products through age 79. To maintain the relationship, an annual expenditure of less than one dollar in marketing is needed. Multiply the total number of new brand lovers netted by the company over a 10-year period at $3,800 in lifetime purchases will result in $4.9 billion in total sales amortized over the next 30 years!   

Yet consumer skepticism and the clutter of products and services that do not clearly differentiate or communicate their compelling message are significant barriers. Only one or two brands within any category will ever achieve cultish brand love.

Cult brands are courageous and fun because consumers want to associate their own beliefs and psyche around a group of like-minded believers who share the fundamental human need for belonging. Beyond a product or service, cult brands sell a lifestyle as brand lovers want to be part of the brand’s “tribe”. This desire goes far beyond the functionality of the product to shared values such as playfulness, simplicity, richness or bolder emotions like being a rebel.

Creative Energy specializes in the development and deployments of cult brand initiatives within several segments ranging from CPG food and beverages to foodservice chains, financial, building materials, travel and tourism. For nearly three decades our firm’s mission has been to deliver superior profitability for its clients. It’s evident that cult status delivers that profitability.

Our cult brand journeys have taught us that there are four basic steps along the path to greatness. We will happily share those in future posts because we build cult brands. If you are ready to begin your own journey to cult brand status, let’s have a discussion.

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