In the third week of September, thousands of people organized themselves into neat lines that snaked along the city blocks of New York, Seattle, London, and dozens of other cities around the world. Sleeping in cardboard boxes, or keeping wakeful vigil through the night, they were participants in a biennial ritual: waiting in line to buy the new iPhone. Like most quasi-religious ceremonies, this one made little sense to outside observers. But the iPhone isn’t just another phone, and Apple isn’t just another phone manufacturer. It’s a brand with a cult following, whose new products inspire sane people to squat for hours outside the nearest Apple store like Wiccans worshipping before Stonehenge.
What is a brand, anyway? The word seems gaseous in its ability to expand or contract to fill any space. Is it a promise, a lie, a reputation, or just a TED Talk buzzword? To companies and consumers, it can be any of those things, but to economists, the definition is simple: a brand is a signal, good or bad, that influences a consumer’s decision to buy a product. And according to some economists, this signal is now in danger of being drowned out by the sheer amount of competing information on the Internet.
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. We’re more likely to trust these signals precisely because they aren’t beamed from corporate headquarters.
The market for high-definition TVs shows how too much access to information can destroy the brand premium. A TV’s two most salient features—its screen size and resolution—are easy to look up, which makes it difficult for companies to charge extra for a logo. Making televisions is a notoriously low-margin business, and the price of TVs has declined 95 percent since 1994. Sony’s TV unit had been in the red for 10 years when the company spun it off in July.
And yet Apple, among many other brands, still means a great deal to a great many people. There are at least two reasons to question the notion that we’re evolving into a race of Homo economicus super-shoppers, or ever will. First, even with perfect information, consumers often make imperfect decisions. Sites like Amazon provide an exhaustive array of choices, but having too many options can make us feel both overwhelmed as we shop (the “paradox of choice”) and less satisfied with the choices we make (buyer’s remorse). Returning to an old brand is a mental shortcut that is not only simple but also, in its own way, blissful.
More important, in categories like cars or clothes, brands aren’t just signals of quality; they also help us communicate our identities. When somebody totes a Fendi bag or drives a Harley-Davidson chopper, she is sending a message (particularly when doing both at the same time). “People are meaning-seeking creatures,” says Susan Fournier, a professor of management at Boston University. “The brands we buy and wear and use are symbols to express our identities. I don’t think any of that is diluted by the Internet.”
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.
In 1984, the British sociologist Eileen Barker published The Making of a Moonie, a seven-year investigation of the Unification Church, based on interviews with members of one of America’s most popular cults. While many cults are portrayed as preying on the poor and uneducated, and particularly people from broken homes, Barker discovered that Moonies tended to be middle-class, with college degrees and stable families. The cult inculcated new members through simple techniques: weekend retreats, deep conversations, shared meals, and, most seductive, an environment of love and support.
Cults like the Moonies are built on the paradox that we feel most like ourselves when we’re part of a group, says Douglas Atkin, the global head of community at the room-sharing company Airbnb, and the author of the 2004 book The Culting of Brands. “The common belief is that people join cults to conform,” Atkin wrote. “Actually, the very opposite is true. They join to become more individual.”
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.
Even today, Yelp still holds exclusive events for its most prolific reviewers, the Yelp Elite Squad, which a 2011 Bloomberg Businessweek article noted for its “cult influence.” “People have been thinking about the similarities between cults and brands for years,” Tichy says. “Only now you’re really seeing people start to codify these practices with evangelists and groups like Yelp Elite.”
In 2009, the founders of Airbnb were facing a similar challenge. They had a product that wasn’t growing and a customer base that wasn’t talking. “I call this period the Midwest of analytics,” says co-founder Joe Gebbia. “It was the flattest growth you’ve ever seen.”
Encouraged by an early investor to “meet your customers,” Gebbia and his team flew to New York to visit with users, take pictures of their living rooms, and gather feedback. The team quickly realized that it needed to bring users together to share their experiences and enthusiasm. They organized the first Airbnb meet-up, which has since been replicated more than 1,000 times around the world. “I don’t think of it as a cult,” Gebbia says. “We’re a community-driven brand, but at the same time, we want every host in every home to recognize that they’re all individuals, and to use Airbnb as an expression of their individuality.”
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 (the line between which sometimes blurs). But companies like Apple show that the creation of a cult mentality can be just as powerful with customers of regular goods—even products that have grown so popular, they would seem to be poor markers of individuality or special identity.
“Apple was more of a cult in the 1980s, when it was the converted few supporting the company against Microsoft and IBM,” says Jennifer Edson Escalas, an associate professor of marketing at Vanderbilt University. From its famous hammer-smashing “1984” ad against IBM to its 1998 commercial “Crazy Ones,” Apple has been deliberate in reinforcing an us-against-the-world ethos. The fact that it has preserved its devoted following while becoming larger than its opponents “shows that culting is useful, even when it’s misleading,” Escalas says.
It might seem creepy that some successful marketers are taking their cues from cult theory. But all advertising is manipulation. This new wrinkle takes advantage of a particular vulnerability—our need to be unique and belong to a group at the same time. Even experts like Susan Fournier, who doubts that cults offer a relevant model for marketing, think that brands play an important role beyond the simple provision of economic information. “I’m more frightened by a world that assumes we are rational actors optimizing all the time, without a sense of emotional connection, comfort, stability, or belonging,” she said. “Who would want that?”