Turning Customers Into Cultists
Research shows that typically, the more information consumers have, the better they are at ignoring corporate iconography. One 2014 study, for instance, found that pharmacists and physicians are three times less likely than the typical customer to buy national brands of headache medicine when cheaper store brands are available. If all consumers became as informed as medical experts, the study concluded, national headache-remedy brands would see their sales cut in half.
An economy filled with product experts would wreck certain brands, according to Itamar Simonson, a marketing professor at Stanford. Advertising thrives in markets where consumers are essentially clueless, often because quality is hard to assess before you buy the product (medicine, mattresses, wine). But on sites like Amazon or eBay, and across social media, information from other sources—ratings, reviews, comments from friends—is abundant.
.. As branding loses some of its influence as a marker of quality, savvy companies are shifting their marketing efforts ever more strongly to this other source of brand advantage—identity and community. Recently, many of the most successful new brands have been looking to an unusual but powerful source of inspiration: religious cults.
.. A number of Bay Area companies have come to incorporate this insight into their marketing strategies. In 2004, shortly after launching the restaurant-review site Yelp, the founders were struggling to grow the company. They decided to convene a gathering of about 100 power-users. The get-together “was a big success,” Ligaya Tichy, who later served as Yelp’s senior community manager, told me. “Bringing users together to share what they loved about the site led to a huge spike in activity. What we realized is that people aren’t really motivated by companies. They’re motivated by other people. We needed to get the message across: you are what makes this product cool.” The number of reviewers on the site grew from 12,000 in 2005 to 100,000 in 2006.
.. One of the hallmarks of a cult is that members unite to oppose what they see as an oppressive or illegitimate mainstream culture. Collaborative-economy companies—from Airbnb to the ride-sharing service Uber—have proved particularly savvy at exploiting this sense, and in so doing converting both merchants and consumers ..