Lady Gaga made her debut in 2005 and within four years she had tens of millions of passionate fans. Today, she is sixth on Twitter’s Most Followers list and Forbes named her the 16th most powerful celebrity in the world. Love her or hate her, Lady Gaga knows how to create a following. “To sustain that level of success, Lady Gaga has realized she has to have fans who appreciate her; to anyone in the business world, this sounds like a classic case of loyalty marketing and customer cultivation,” says Jackie Huba, author of Monster Loyalty: How Lady Gaga Turns Followers Into Fanatics.
Huba, who has been researching customer loyalty since 2001, says businesses often churn through customers, spending more time and resources on acquisition, but Lady Gaga nurtures her current fans and attracts new ones by word of mouth.
“Lady Gaga’s strategies appear to be intuitive and organic, but they set her apart from other pop stars,” she says. “Hers is a loyalty story, and businesses should take a look at what she’s doing.”
Huba shares seven lessons businesses can learn from Lady Gaga on building a strong fan base:
Focus on your one-percenters.
A business’s most engaged customers–the top 1%–create the most value for a brand, says Huba. This is the customer who recommends your company to their friends, purchases your products and services as gifts, and forgives occasional dips in customer service. You’ll find them engaging with your brand on social media and attending company events.
“Research has shown that it’s five times cheaper to keep a customer than get a new one,” says Huba. “Gaga gets the math. It’s her overarching philosophy to focus on her core advocates. Those are the people who will be evangelists and will bring in new customers on their own.”
To reach this group, Lady Gaga spends a lot of time on social media and posts messages to chat boards on her website. She also rewards loyalty by making concert tickets available to her fans through exclusive presale offers.
Lead with your values.
When customers make a purchase, they use the analytical side of their brains and consider things like price and cost of ownership. But there is also an emotional side to how people buy, and when a fan connects with a brand’s values, the bond is stronger, says Huba.
“It can be powerful to show what you stand for and be very visible with that,” she says. “Gaga is big on LGBT rights because it was New York’s gay clubs that first booked her, and she never forgot that.”
When Lady Gaga became more successful, she leant her voice to issues that affected her fans, such as the repeal of the military’s “don’t ask don’t tell” policy for gays and lesbians, and the anti-bullying movement.
Build a community.
Fans want a way to connect with other fans, and building a site where they can come will foster loyalty, says Huba.
“Lady Gaga’s website LittleMonsters.com gives fans a chance to create new friendships based on their mutual love of Gaga,” says Huba. “When you create a community for your followers, you encourage loyalty to the umbrella that put them together.”
Give fans a name.
Creating a name for fans gives them an identity and a chance to feel like they’re part of something; Lady Gaga calls her fans her Little Monsters.
“When you put label on loyalty, fans will instantly know whether or not they’re at that level,” says Huba. “In essence, a name gives fans something to join.
Embrace shared symbols.
Lady Gaga fans greet each other with the “Paws Up” symbol, forming their hands into monster claws. While naming fans gives them an identity, shared symbols gives fans a feeling of inclusion.
“Whether it’s a gesture, picture, object, or words, having a symbol is an essential part of creating a brand movement, and those who know and understand it, love that they’re part of a special group,” says Huba.
Make them feel like rock stars.
While Lady Gaga is a rock star, she takes every opportunity to shine the spotlight on her most loyal fans, says Huba. For example, the first person in line to buy tickets for her concert tour gets to go backstage and meet Gaga and gets their picture on a special section of her website. She is also known to send pizzas to fans waiting in line for album signings.
“Lady Gaga is humble enough to understand that she would not be where she is without her fans’ support,” says Huba. “She does so many things to make her fans feel like royalty.”
Generate something to talk about.
Eventually, fans will run out of things to talk about, so smart brands keep things interesting. For example, when perfume manufacturer Coty approached Lady Gaga about doing a fragrance, she said she would only agree if the company could create a black liquid that sprayed on clear.
“Coty told her it couldn’t be done, and so Gaga said she wasn’t interested in doing a perfume,” says Huba. “Six months later Coty figured out how to create the technology and it’s now patent pending. Lady Gaga pushed the fragrance industry to its biggest innovation in 20 years and her fragrance, Fame, became the fastest-selling perfume after Chanel No. 5.”
Obscurity is the enemy, says Huba. “You have to stand out to sustain success,” she says. “Lady Gaga is one of most amazing word-of-mouth marketers I’ve ever seen; she continues to do things that give her fans something to talk about.”
Stephane Bozza/Forbes.com/August, 2014