Afraid to take a page out of the lifestyle brand playbook? Those days are done.
This is the first in a multi-part series on the rapid evolution of maturation of “lifestyle brands” and how their customer- and community-first strategies are redefining what it means to be a successful business.
It’s become cliche to say that the pandemic is ushering new ways of conducting business. One that hasn’t been talked about enough and has recently been an obsession of mine is how the path to sustained growth — by growth I mean more market share and revenue — has changed dramatically over the past few years. Any entry level textbook on entrepreneurship and scale will tell you that first you need to have an excellent product with market fit. You find customers, nurture them into loyal customers, and then you either refine or expand said product, or take your learnings to develop new products.
That path is done. Welcome to the era of purpose-fueled growth.
Businesses Are Defined By the Power of Purpose
Businesses are increasingly being defined less by the quality of their products and more by the power of their purpose. This is changing how business should plan for growth.
Today, after taking the plunge into entrepreneurship with an excellent product, the next step is not to build out as large a target market as quickly as possible and then refine and expand 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 about brand building entitled “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 foundation of what are now called “niche brands”: Build not a good product for many, but a perfect product for few.
With the rise of highly personalized ad targeting campaigns made possible by innovations in marketing technology, niche brands saw unprecedented success in the 2010s. Brands such as Jacamos (clothing for tall men), Lefty’s (products for left-handed people) and August (services for homeowners renting out their homes) generated bottom lines and legacies for which their founders could be proud.
Related Article: 3 Ways CX Can Become a Driver of Business Strategy
Lifestyle Brands Stand for Something
However, for the uber ambitious entrepreneur, niche brands beg the question: is it possible to tap into the power that comes with a highly curated customer community and combine it with the awareness of much larger brands? The answer, as we’ve seen most recently, is with 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 just as defined by the consumers with whom they don’t do business. For example, in the niche brand world, a right-handed person would try in vain to find a good pair of scissors on Lefty’s. However, lifestyle brands define who their communities are and aren’t on purpose and mission, not product. Many lifestyle brands cater to righties and lefties, but in different senses of those words.
In short: Lifestyle brands stand for something. And they don’t really care if you also stand for it, because they know there are plenty of people who do.
So what do lifestyle brands look like in practice? From my perspective, lifestyle brands share four key traits:
- They leverage their purpose as the engine to drive mass awareness. People often know what lifestyle brands stand for before they know the intricacies of their product. A well known recent example of this is Patagonia, who has issued very public declarations on the types of customers they don’t want. Another example is Apple, which has made privacy their top public priority. (Take their most recent product launch.) It is through their purpose that they cross the chasm from niche to a company known on a more broad level.
- They are ruthless in their pursuit of customer advocacy and community. Drinkware brand YETI’s lifestyle ethos is readily apparent through their corporate hashtag: #BuiltForTheWild. One quick visit to their website shows how much they are invested in their community. Customer-sourced Instagram photos are front and center. They have recruited a large network of customer ambassadors that you can read about. And they have created high quality content ranging from films to podcasts to magazines that would be thoroughly uninteresting to anyone who is not a fan of outdoor living. The result? You find anyone who has bought one piece of YETI drinkware, and I can guarantee you that they own three or four more at their home (or cabin).
- Larger, product-oriented brands scramble to partner with them. Amazon partnered with Black Rifle Coffee to promote their new Navy SEAL action thriller series, “The Terminal List.” Philips Norelco partnered 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 influence over their target customers that larger brands are drawn to them like magnets, looking to either tap into a new audience or further ingratiate themselves with existing customers by saying, “Hey! We also subscribe to the same belief system as this lifestyle brand (sometimes, when it suits us too)!”
- Swag becomes a legitimate revenue stream for lifestyle brands. Say what you will about bumper stickers, but they are the ultimate expression of belief and political points of view for many people. If you see a brand logo bumper sticker on a car, chances are it is representative of a lifestyle brand. Similarly, is the brand’s apparel section prominently located on their website, but they aren’t known for their clothing? It’s a lifestyle brand.
Related Article: 2 Years Into COVID: What CX Strategies Work Now
The Case for Lifestyle Brand Success
One of the reasons why business leaders are afraid to pursue the lifestyle brand strategy is the concern about alienating potential customers by so strongly standing for certain beliefs or an ethos. To this end, I wanted to list a few economic reasons why the lifestyle brand approach is preferable (particularly with a potential recession around the curve).
- First, lifestyle brands’ most valuable marketing channel is their current customers. Customer referrals are famously the highest quality — and cheapest — source of new customers. When executed correctly, lifestyle brands can rely on existing customers to tell their friends and family about them. This natural flywheel lowers costs in other areas of marketing, such as advertising. Additionally, happy customers are repeat customers, so lifestyle brands can confidently rely on greater customer lifetime value numbers than other brands.
- Second, lifestyle brands are able to charge more for products than competitors. There are many YETI competitors that offer drinkware at significantly reduced prices. But when customers buy YETI products, they are also doing so to showcase to others what their beliefs and values are, which is 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 may turn out to be more recession- and inflation-proof than others. Due to strong customer loyalty, inflation-related price hikes will likely have less of an adverse impact on lifestyle brands. Additionally, customers are more likely to stick with them if they need to cut product lines or services due to economic circumstances. Ultimately, brands who are laser-focused on a smaller set of customers are better able to “cash in” brand equity from time to time, having developed stronger relationships with said customers.
Afraid to Alienate Customers? Those Days Are Gone
There was a time in the not-so-recent past where even the mention of pursuing a lifestyle brand strategy would send business leaders running for the hills. Why risk alienating any potential customer by espousing 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 living, whatever that might mean to those individuals.
In my next article, I’ll dive more 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 companies.