Masterclass: Build Your Tribe

Vusi Thembekwayo

28 Dec 202215:46

Summary

TLDRThe video script delves into the concept of building a loyal customer base through exclusivity and community, using luxury car brands like Ferrari and Lamborghini as examples. It emphasizes the importance of creating a 'tribe' around a brand, where customers are not just buyers but promoters and protectors of the brand's value. The speaker advises understanding the buying patterns and behaviors of your target market to ensure repeat business and long-term success, highlighting the pitfalls of being a 'middle-of-the-road' product and the benefits of positioning at the extremes of the market—either as a premium brand or a discount leader.

Takeaways

🏎️ Luxury car brands like Lamborghini and Ferrari create a sense of exclusivity by requiring customers to own a certain type of car before being invited to purchase others.
💼 Building a business to foster repeat business is essential for scaling and maintaining customer loyalty.
🛒 The concept of removing prices from products can create intrigue and exclusivity, attracting customers who understand and value the product without needing to know the cost upfront.
🔊 Car manufacturers like Lamborghini design their vehicles to have distinct sounds to attract attention and create a memorable brand experience.
🚗 Ferrari's V12 configuration places the engine in the middle of the car, creating a unique driving experience and a recognizable brand feature.
🚫 Limited edition releases by car manufacturers are a strategy to create exclusivity and drive repeat purchases among existing customers.
💎 Naming new products with unique and aspirational names can add to their appeal and create a sense of prestige and desirability.
👥 Building a community or 'tribe' around a brand helps to create a loyal customer base that will support and promote the brand.
🤝 A tribe, in the context of business, is a group of customers who share the same beliefs and values, and are invested in the brand's success.
🏷️ When building a tribe, the brand's community takes ownership of the brand identity, and their input becomes crucial for product and market strategy.
💰 Members of a successful tribe are willing to pay the full value for a product, indicating their understanding and appreciation of its worth.

Q & A

What is the prerequisite for being invited to own a certain type of Lamborghini or Ferrari?
-To be invited to own a certain type of Lamborghini or Ferrari, one typically needs to have owned a specific type of car from their lineup before, which is part of building a repeat business.
Why would a company remove the price from a product on the shelf?
-A company might remove the price from a product on the shelf to create a sense of exclusivity and to appeal to customers who understand the value of the product and are not concerned about the price.
What does the speaker imply about the sound of different sports car brands?
-The speaker implies that each sports car brand has a distinct sound that is part of its identity, such as the high-pitched tenor sound of Ferraris and the high wailing sound of Lamborghinis.
What is the significance of having the engine in the middle of a Ferrari V12 car?
-The mid-engine configuration of a Ferrari V12 places the engine behind the driver, allowing for better weight distribution and handling. It also enables the engine to be displayed under a glass cover, showcasing it to onlookers.
How does Ferrari create opportunities for repeat customers?
-Ferrari creates opportunities for repeat customers by releasing limited editions of their cars and making ownership of these exclusive models contingent on owning previous editions.
What does the speaker suggest is the best way to build a business?
-The speaker suggests that the best way to build a business is to focus on creating repeat business by offering exclusive products and building a community around the brand.
What is the importance of building a 'tribe' around a brand according to the speaker?
-Building a 'tribe' around a brand is important because it creates a community that shares the same beliefs and values, which can lead to repeat sales and strong brand loyalty.
Why did Gap change their logo back after initially changing it?
-Gap changed their logo back because their tribe, or loyal customer base, expressed strong dislike for the new logo, demonstrating the power of the community in defining a brand's identity.
What are the three rules for building a tribe according to the speaker?
-The three rules for building a tribe are: 1) Once you build a tribe, the tribe owns the brand, not you. 2) Tribes have a demonstrable track record of repeat sales. 3) Members of the tribe are always willing to pay for the value of the product immediately.
Why do some property sites not show the price of the properties they list?
-Some property sites do not show the price because they are marketing to a clientele that understands the value of the property and does not need the price to be stated, indicating exclusivity and the assumption that the buyer can afford it.
What does the speaker suggest is the worst place to be in the marketplace?
-The speaker suggests that the worst place to be in the marketplace is the middle layer, where products are sold based on utility and price, as there is always someone cheaper, leading to a focus on price rather than brand or community.

Outlines

00:00

🏎️ Exclusivity in Luxury Car Brands

The paragraph discusses the strategy of luxury car brands like Lamborghini and Ferrari, emphasizing the exclusivity and the need for customers to own a certain type of car before being invited to purchase a more exclusive model. It also touches on the importance of building a business that fosters repeat customers to scale. The paragraph uses the example of Lamborghini's STO model, a rare racing version, to illustrate the concept of creating a desire for exclusive products and making customers go through a process to own them.

05:00

🔄 Building Repeat Business and Brand Loyalty

This paragraph delves into the concept of repeat business, suggesting that businesses should aim to bring customers back by offering new and exclusive products. It uses the example of Rolex and its Oyster Perpetual line to illustrate how brands can create layers of products to upsell customers. The speaker also talks about the importance of building a community or 'tribe' around a brand, which can lead to brand loyalty and long-term customer relationships.

10:08

🏠 Marketing Strategies and the Psychology of Pricing

The speaker explores the idea of marketing high-end products without disclosing the price, using the example of luxury property sites that show properties without prices. This strategy is meant to attract customers who understand the value of exclusivity and are not concerned with the cost. The paragraph also discusses the importance of understanding the buying patterns of one's 'tribe' and how to cater to their preferences, emphasizing that building a tribe around a product can lead to a sustainable business.

15:08

🛍️ Positioning in the Market and the Importance of Branding

The final paragraph focuses on the importance of positioning in the market, warning against being stuck in the middle where competition is fierce and differentiation is difficult. It contrasts the top of the pyramid, where quality and branding matter, with the bottom, where utility and price are the main concerns. The speaker advises that selling to those who value quality or are willing to pay a premium is a more sustainable strategy than competing on price alone.

Mindmap

Keywords

💡Lamborghini

Lamborghini is an Italian luxury sports car manufacturer known for its high-performance vehicles. In the video, it is used to illustrate the concept of exclusivity and the brand's strategy of creating desire by limiting access to their products. The script mentions that to be invited to purchase certain Lamborghini models, one must have owned a specific type of car before, showcasing the brand's strategy to build repeat business and exclusivity.

💡Repeat Business

Repeat business refers to customers who make multiple purchases from a company over time. The video emphasizes the importance of building a business model that encourages repeat customers as a way to scale and ensure long-term success. The concept is exemplified by luxury car brands creating a hierarchy of products that existing customers must navigate before gaining access to more exclusive models.

💡Exclusivity

Exclusivity in the context of the video refers to the strategy of making products rare or limited to a select group of customers. This approach is used by brands like Ferrari and Lamborghini to increase the desirability of their products. The script discusses how creating exclusive products can foster a sense of prestige and urgency among potential buyers.

💡Product Strategy

Product strategy involves the planning and management of a product's lifecycle, from development to marketing and sales. The video discusses how companies like Ferrari use product strategy to create a tiered system of products, where owning one model can grant access to more exclusive models, thus encouraging repeat purchases and brand loyalty.

💡V12 Configuration

V12 Configuration refers to an internal combustion engine with 12 cylinders arranged in a V-shape. In the script, it is mentioned that Ferrari's V12 models are always mid-engined, which is a layout where the engine is located in the central part of the car, behind the driver but in front of the rear axle. This configuration is associated with high-performance sports cars and is used to highlight the exclusivity and performance of Ferrari's top-tier models.

💡Tribe

In the video, a 'tribe' refers to a community of people who share the same beliefs, values, and behaviors, particularly in relation to a brand or product. The speaker advises building a tribe around a business to create a loyal customer base that will support and promote the brand. The concept is used to emphasize the importance of community and shared values in business success.

💡Bespoke

Bespoke refers to custom-made products or services, tailored to the specific needs and preferences of the customer. The video mentions 'bespoke timeless furniture' as an example of a high-value product that requires understanding and appreciation from a particular customer base. The term is used to illustrate the importance of catering to a niche market with unique needs.

💡Market Adjacencies

Market adjacencies are related markets or customer segments that have similar needs or characteristics. The video uses the example of Rolls-Royce understanding that people who buy private jets might also be interested in their luxury cars. This concept is important for identifying potential customers and expanding a business's reach by leveraging existing customer relationships.

💡Utility

Utility in a business context refers to the usefulness or practicality of a product or service. The video contrasts selling based on utility, where customers value the product for what it does, with selling based on brand or community, where customers value what the product says about them. The term is used to differentiate between customer motivations at the top and bottom of the market pyramid.

💡Masterclass

A masterclass is an educational program or seminar, often led by an expert in a particular field, designed to teach advanced skills or knowledge. In the video, the speaker mentions the VT masterclass reaching over 5 million unique entrepreneurs, indicating the scale and impact of their educational offering. The term is used to highlight the speaker's authority and the reach of their business teachings.

Highlights

Lamborghini and Ferrari have an exclusivity model where owning a certain type of car is prerequisite for being invited to own a new model.

Building repeat business is essential for scaling a business.

Removing the price tag from products can create intrigue and exclusivity.

Lamborghini's new 'Halo' model, the STO, is a super-rare racing version.

Ferrari's brand identity is associated with speed, the color red, and a distinctive engine sound.

Aston Martins and Jaguars are known for their amazing sound despite their performance.

Lamborghinis are designed to be loud and attention-grabbing.

Ferrari's V12 configuration features a mid-engine design, enhancing exclusivity.

Ferrari and Lamborghini use limited editions to create a sense of exclusivity and repeat purchase.

Creating a community around a brand helps in building repeat business.

Rolex is known for its Oyster Perpetual model, which serves as an entry point to a range of products.

Tribes, or communities, share belief systems and behaviors, which can be leveraged for business success.

Building a tribe means giving up brand ownership to the community.

Tribes have a track record of repeat sales and are willing to pay for the value of the product.

Not showing the price of a product can signify its exclusivity and the buyer's understanding of its value.

Understanding your tribe's buying patterns and market adjacencies is fundamental for business success.

The middle layer of the market sandwich is the worst place to be due to constant competition on price.

Selling to premium buyers or discount seekers is safer than competing in the middle market.

VT masterclass has reached over 5 million unique entrepreneurs worldwide.