Brand Loyalty Meets Shareholder Value

Welcome back to Old Men New Money. I'm Douglas Borthwick. And today we're exploring what happens when two traditionally separate parts of a business finally start talking to each other, the marketing department and the investor relations department. In traditional companies, these two functions exist on different planets. Marketing spends millions trying to create customer loyalty through advertising, promotions, and artificial loyalty programs. Investor relations spends their time managing quarterly earnings calls and institutional investor relationships.

The customers they're both dealing with often the same people, but nobody connects the dots. The insurer model forces this connection. And when it happens, something remarkable emerges. Brand loyalty becomes an investment thesis. Shareholder value becomes a customer benefit. The separation dissolves and you get integration that creates competitive advantages neither function could achieve alone. Here's your 30 second version. Consumer facing companies that implement and shimmer programs must integrate marketing and investor relations functions. Customer acquisition becomes capital raising. Brand loyalty becomes equity appreciation.

This convergence creates measurable ROI through reduced customer acquisition costs, increased lifetime value and more patient capital from customers who understand the business. The marketing department and investor relations department become partners instead of separate silos. And not every business is suited for the insurer model, but consumer facing brands, this is where it shines. Think about brands people already have emotional connections with. Local coffee shops where they're regulars, restaurants they visit weekly, retail stores where they know the staff, fitness studios where they're part of the community.

These businesses already have loyal customers who could be investors. The relationship exists. The challenge is making it explicit and valuable. I wrote extensively about this in the insurer model and your equity in your pocket, both books available on Amazon. The food and beverage industry, retail, fitness and wellness, any business where customers make frequent repeat purchases and have direct relationships. And let me give you an example, Blue Mountain Coffee. The fictional company I used in my books represents hundreds of conversations I've had with actual coffee shop owners. They have customers who come in daily.

These customers already feel ownership. They recommend the shop to friends. They defend it on social media. They want to see it succeed. They're acting like owners without the benefits or legal rights of ownership. The insurer model just makes this relationship official. Convert emotional ownership into legal ownership, reward advocacy financially, align incentives completely. In traditional companies, marketing and investor relations rarely interact. They have different goals, different metrics, different stakeholders. Marketing focuses on customer acquisition cost, customer lifetime value, brand awareness, engagement rates, conversion rates.

Their job is getting people to buy and keeping them buying. Investor relations focuses on earnings per share, revenue growth, institutional investor sentiment, analyst coverage, stock price. Their job is maintaining positive relationships with Wall Street. These metrics seem completely disconnected, but in an insurance company, they converge. Customer acquisition becomes capital raising. Every new customer investor represents both revenue and investment. Your marketing spend now generates both sales and capital. This fundamentally changes ROI calculations. Brand loyalty becomes equity appreciation.

Happy customers spend more, which increases revenues and profits, which increases stock value. Customer investors benefit twice, ones from better service and discounts, and again from their equity appreciating. Word of mouth marketing becomes investor advocacy. When customer investors recommend your business, they're not just bringing you new customers. They're potentially recruiting new investors. The credibility is higher because financial stakes are visible. Customer feedback becomes shareholder input. When customers who are also investors give you feedback, they're thinking about both user experience and business success.

This higher quality feedback improves operations and strategy. Now, implementing in Schumer requires organizational changes. You can't just add it on top of existing structures. You need integration. At successful in Schumer companies, marketing and investor relations report to the same executive or work as integrated teams, why? Because their functions are now intertwined. Marketing campaigns need to consider investor messaging. Investor relations communications need to consider customer experience. You need new roles. The community manager isn't traditional customer service or traditional investor relations.

They manage relationships with people who are both customers and investors. Different skills are required. The customer success lead for in Schumer's focuses on ensuring owner customers get maximum value from both their purchases and their ownership. Traditional customer success plus investor relations. The events coordinator plans activities that serve both community building and investor education. Coffee tastings that are also business updates. Store tours that are also financial transparency sessions. Your metrics dashboard needs to integrate. Traditional companies track customer metrics separately from investor metrics.

In Schumer companies need unified views. How many active customer investors? What's their total equity value? How does their spending compare to non-owners? What's their lifetime value including both purchases and referrals? Let me talk real numbers based on research and early implementations. According to Deloitte research, customers acquired through referrals have a 37% higher retention rate. Harvard Business Review found that referred customers have a 16% higher lifetime value. Multiple studies show that loyalty program members generate 12 to 18% more incremental revenue growth per year than non-members.

Word of mouth marketing research from McKinsey found that customers acquired through referrals have twice the lifetime value of customers acquired through traditional marketing. And referred customers bring in twice as many new customers as non-referred customers. From a customer acquisition cost perspective, the research is compelling. Studies show that referral marketing can reduce customer acquisition costs by at least $24 per customer compared to traditional advertising. And referred leads are four times more likely to convert than cold leads. Let me give you a concrete example based on these industry benchmarks.

A regular customer in a local coffee shop might spend two to $3,000 per year over an average relationship of two to three years. Customer acquisition costs through traditional marketing might be two to $300. A customer investor, based on loyalty program research showing 12 to 18% increased spending, would spend approximately $3,000 per year. Research shows they have 37% higher retention. So instead of two to three years, they may stay five years plus. That's $15,000 in spending versus 6,000 from a regular customer. And in referral value, research shows referred customers bring in twice as many new customers.

If each customer investor refers even two to three new customers over their lifetime, that multiplies the value significantly. And customer acquisition costs through referrals is essentially zero or minimal. When you include spending, capital provided upfront and referral value, customer investors can deliver three to seven times the value of regular customers based on these industry research findings. When you implement Insumer programs, your marketing strategy changes fundamentally. Traditional marketing is push-based. Advertising, promotions, discounts. You're trying to interrupt people and convince them to give you attention.

It's expensive and increasingly ineffective. Insumer marketing is pool-based. You're offering ownership in something people already value. You're converting existing emotional connections into financial relationships. The marketing becomes own a piece of what you already love. Your messaging changes. Instead of buy our coffee because it's great, you're saying you love our coffee, want to own part of the business. Instead of join our rewards program, you're saying become an investor and get real ownership benefits. Your channels change. Instead of paying for Facebook ads, you're hosting ownership information sessions at your locations.

Instead of discounting to attract price-sensitive customers, you're offering equity to commitment-minded supporters. Your metrics change. Instead of just tracking click-through rates and conversion rates, you're tracking what percentage of customers become investors, how much capital each customer investor provides, how many referrals each customer investor generates. The investment in marketing becomes more efficient because you're targeting people who are already customers. You're not trying to create awareness from scratch. You're deepening existing relationships. Investor relations also transforms in an consumer company.

Traditional investor relations focuses on institutional investors, analysts, financial journalists, quarterly earning calls, investor presentations, non-deal road shows. The audience is professional to analyze hundreds of companies. Insumer investor relations focuses on retail customer investors. Your audience is people who use your products and have personal relationships with your brand. They're not analyzing your debt-to-equity ratio. They're evaluating whether the business they love is succeeding. Your communication style changes. Instead of dense financial jargon, you use plain language.

Instead of emphasizing EBITDA margins, you talk about customer satisfaction and growth plans. Instead of quarterly ritual, you provide continuous updates through channels customer investors already use. Your transparency increases. Customer investors want to see operations. They want to understand your supply chain, your costs, your challenges. They're not adversaries trying to find weaknesses. They're partners invested in your success. At Blue Mountain Coffee, in my example, the owner hosts monthly coffee and number sessions.

Customer investors come to the shop, get free coffee, hear business updates, revenue, expenses, plans, challenges, questions are encouraged. This is investor relations, but it's intimate and conversational. Your reporting format changes. Instead of SEC filings that nobody reads, you create dashboards. Customer investors can access anytime. Real-time sales data, customer accounts, inventory levels, transparency builds, trust. Now, let's talk about something critical that makes people nervous, privacy. When marketing and investor relations converge, you're connecting customer data with investor data. And this raises legitimate privacy concerns.

But here's what you must understand. Just because someone's both a customer and an investor doesn't mean you can share their information freely between systems. Customer data, purchase history, preferences, contact information, is protected by privacy laws like GDPR and CCPA. Just because someone's an investor doesn't mean you can spam their investor email address with marketing offers. Investor data, their financial information holdings, income verification, is protected by securities laws and financial privacy regulations. Just because they're a customer doesn't mean their barista should know how much equity they own.

The integration must be privacy preserving. Your point of sale system verifies. This person owns equity and qualifies for discounts. It doesn't reveal this person owns exactly 1,342 shares purchased at 750 each. Your marketing system knows this person is a customer investor. Segment them differently. It doesn't reveal their net worth, their specific investment amount. The technology exists to verify status without revealing details. NFTs and zero knowledge proofs can prove you qualify for a tier without revealing exact holdings. And this is critical for making insurer work at scale without invading privacy.

At INX, we built privacy preserving systems, verification without exposure. This technical work is essential but invisible to users. They just see it works. And let me give you a real example from a company where I'm chief investment officer, Treasure Experience. Now Treasure Experience runs treasure hunting expeditions recovering underwater treasures from shipwrecks. We raise capital through a Reg DS offering an INX. Investors bought securities that give them shares in treasures that we recover. They follow our expeditions. They engage on social media. They recruit other investors who share the passion.

Our marketing became join a treasure hunting expedition as an investor. Our investor relations became here. The shipwrecks were exploring and the treasures we've found. This integration was natural because our investors are passionate about the business itself, not just returns. They're in shimmers and spirit even though they're not customers in the traditional sense. They've invested in the experience as much as the financial returns. Our retention rate is extremely high because investors don't want to miss the next discovery. Our referrals are excellent because treasure hunting enthusiasts talk to each other constantly.

Our capital raising integrates with our storytelling because every expedition update is both adventure narrative and business. When you successfully integrate brand loyalty and shareholder value through the insurer model, you build a competitive moat that's almost impossible for traditional competitors to cross. Switching costs become real. When customers are also investors, switching means forfeiting both their ownership benefits and their equity stake. Competitors can't match this with discounts or promotions.

Network effects built, each new customer investor increases the value of ownership for existing owners through increased revenue and stronger community. Traditional businesses don't have this compounding effect. Capital access integrates into growth. You're not dependent on external investors or debt. Your customers provide capital which aligns their interests perfectly with business. Brand resilience increases. When you hit challenges, customer investors stay loyal because they benefit from long-term success, not just immediate transaction value. Traditional businesses lose customers at the first sign of problems.

If you're implementing in Shumurf, here are the metrics that matter. Conversion rate from customer to customer investor, what percentage of customers become owners? This tells you if your value proposition works. Benchmark varies by business type and price point. Average investment per customer investor. How much do customers invest? How much do owners invest? This affects your capital raising potential. Typically ranges from $1,000 to $5,000 for local businesses. Spending differences between customers and customer investors. How much more do owners spend?

Research shows loyalty program members spend 12 to 18% more with some programs showing increases up to 43% for highly loyal customers. Retention rate difference. How much better is customer investor retention versus regular customers? Research shows 37% higher retention for referred customers which provides a good benchmark. Referral rate and conversion. How many referrals per customer investor and what percentage converts? Research shows referred leads convert at least three to five times higher rates than traditional leads. Lifetime value comparison. What's total value of customer investors versus regular customers?

Research shows this can be 16% higher at minimum with some studies showing referred customers adding twice the lifetime value. Capital raised per marketing dollar spent. How much investment do you generate per dollar of marketing? Compared to customer acquisition costs for regular customers which averages significantly higher than referral costs. What should you do right now? If you're a consumer facing business, map your customer data and investor data. Where do they overlap currently? Where could they integrate? What privacy protections do you need? Identify your marketing and investor relation leaders. Get them talking.

Have them collaborate on an consumer pilot program. Break down the silos. Calculate your current customer economics. Customer acquisition cost, average spending, retention rates, lifetime value. These are your baseline metrics before implementing in Schumer. Survey your most loyal customers. Would they invest if given the opportunity? How much? What benefits would motivate them? Use this data to design your offering. Build your measurement framework. What metrics will you track? How will you prove ROI? Get these systems in place before you launch. And if you're a customer of a brand you love, ask them about ownership opportunities.

Tell them you'd invest if you could. Be the demand that pushes supply. The convergence of brand loyalty and shareholder value isn't just about making more money. It's about building businesses that are more resilient, more sustainable, and more aligned with the communities they serve. When your marketing department and your investor relations department finally start working together, magic happens. Customer acquisition costs drop. Customer lifetime value increases. Capital access improves. Community strengthens. Competitive advantages build.

This convergence only works because blockchain technology finally makes it possible to connect customer identity with investor identity in real time with privacy preservation. The technology was the bottleneck and now it's solved. Next episode, we're going to explore community marketing officers. That's the new role that emerges when shareholders become brand ambassadors. How do you turn your customer investors into your marketing force? What incentive structures work? What are the compliance considerations? This is the practical implementation of everything we've been discussing. The rubber meets the road. I'm Douglas Borthwick.

This is Old Man New Money. If the integration of marketing and investor relations makes sense, do you share this with a business owner who's spending too much on customer acquisition and getting too little loyalty in return? This might be the answer.