Episode 19: Brand Loyalty Meets Shareholder Value

The Power of Integration: Bridging Marketing and Investor Relations for Success

Welcome back to Old Men, New Money®, where we delve into innovative business strategies. I’m Douglas Borthwick, and today, we are exploring a revolutionary concept: the integration of marketing and investor relations. Traditionally, these departments function independently, with marketing focusing on customer loyalty and investor relations managing investor communications. However, the Insumer Model™ forces these two to collaborate, yielding extraordinary results.

The Insumer Model™: A New Way Forward

In traditional companies, marketing and investor relations operate in silos. Marketing aims to build customer loyalty through advertising and promotions, while investor relations handles quarterly earnings calls and institutional relations. Often, both departments target the same audience but fail to connect the dots, leaving untapped potential.

The Insumer Model™ bridges this gap. It transforms brand loyalty into an investment thesis and integrates customer and shareholder value. With this model, customer acquisition doubles as capital raising, and brand loyalty boosts equity appreciation. This conversion yields significant ROI, lowering customer acquisition costs, increasing lifetime value, and attracting patient capital from informed customer investors.

The Suitable Businesses for The Insumer Model™

Not all businesses are suited for this model, but consumer-facing brands frequently engaging with customers have immense potential. Businesses like coffee shops, restaurants, retail stores, and fitness studios, with emotionally connected customers, can harness this connection. The Insumer Model™ formalizes these relationships, turning emotional ownership into legal ownership while rewarding customer advocacy financially.

An Example: Blue Mountain Coffee

Consider Blue Mountain Coffee, a fictional company embodying countless conversations with actual coffee shop owners. Their daily loyal customers act like owners—recommending the shop and defending it on social media. The Insumer Model™ makes these relationships official, turning emotional ownership into legal ownership, with integrated incentives.

Bridging the Gap in Traditional Companies

Traditionally, marketing and investor relations function separately with distinct goals and metrics. Marketing aims at customer acquisition cost and brand awareness, while investor relations focuses on earnings per share and institutional sentiment. These metrics might seem disconnected, but the Insumer Model™ aligns them by transforming customer acquisition into capital raising.

A customer investor in this model represents both revenue and investment. Marketing spend generates sales and capital, altering ROI calculations. Brand loyalty converts into equity appreciation, enhancing customer investor satisfaction and increasing stock value. The model also elevates word-of-mouth marketing to investor advocacy, enhancing credibility through financial stakes.

Implementing The Insumer Model™

Successfully implementing the Insumer Model™ requires organizational changes. Integration is essential, often demanding that marketing and investor relations report to the same executive or work in integrated teams. Campaigns and communications must consider both customer experience and investor messaging.

New roles emerge, such as the community manager, who manages relationships with individuals who are both customers and investors. The customer success lead ensures that owner-customers derive value from their purchases and ownership. Even the events coordinator’s role shifts to organizing activities supporting both community building and investor education.

Metrics must evolve too, from tracking separate customer and investor metrics to integrating them. Companies need dashboards showing active customer investors, their total equity value, spending comparisons, and lifetime value, including referrals.

Real-World Numbers and Impact

According to Deloitte research, referred customers have a 37% higher retention rate, while loyalty program members generate 12-18% more incremental revenue annually. Referral marketing can reduce customer acquisition costs significantly, with referred leads being four times more likely to convert than cold leads.

A real-world example could be a local coffee shop’s regular customer spending $2,000-$3,000 annually over 2-3 years, with customer acquisition costs of $200-$300. A customer investor, however, might spend $3,000 annually, with increased retention leading to $15,000 over 5+ years. They could also refer new customers, multiplying their value significantly.

Changes in Marketing and Investor Relations

With the Insumer Model™, marketing shifts from push-based advertising to pull-based marketing, inviting existing customers to own a piece of what they love. Instead of traditional ads, companies may host ownership information sessions, offering equity over discounts.

Investor relations refocuses on retail customer investors, using plain language and emphasizing growth plans over jargon. Transparency and continuous updates build trust with customer investors who seek operational insights as partners.

Addressing Privacy Concerns

A critical aspect of integrating customer and investor data is ensuring privacy. Though individuals may be both customers and investors, privacy laws like GDPR and CCPA protect customer data, while securities laws secure investor data. Integration must preserve privacy, using technology to verify status without revealing specifics.

Case Study: Treasure Experience

At Treasure Experience, where I serve as Chief Investment Officer, we’ve seen the Insumer Model™ at work. The company runs treasure hunting expeditions, raising capital through INX. Our investors, passionate about the expeditions, recruit others and stay committed, integrating storytelling with business progress and succeeding in this unique model.

Conclusion: The Future of Integration

By integrating brand loyalty and shareholder value, businesses build competitive moats, resilient growth strategies, and more integrated communities. When marketing and investor relations collaborate, customer acquisition costs drop, customer lifetime value rises, and competitive advantages grow.

In our next episode, we’ll explore the role of a community marketing officer and how customer investors can transform into a marketing force. Stay tuned, and if this model makes sense to you, share it with a business owner spending too much on customer acquisition for too little loyalty in return. This might be the solution they’re looking for.