HOW DO LUXURY BRANDS ATTRACT AND RETAIN THEIR CUSTOMERS ?

Many companies dream of attracting more Luxury Customers, the kind who will pay more and not ask for discounts. The lure of additional revenue and profit makes this something very desirable. In this blog we talk about the strategies that luxury brands use to attract more high-end customers.

Having studied some of the biggest brands in the world over the last 5 years, there is a lot of consistency and simplicity in what they all do to attract customers. When we say luxury customers, we are talking about the kind of person who can live somewhere between London, Monaco,  whilst still having an apartment overlooking Venice Beach. Of course when in London, they will make sure to pop into The Ritz for afternoon tea or Harrods for dessert !

Here are 5 of the most common tactics (in no particular order) that these brands use and you should consider bringing into your own strategy in order to get that luxury market;

1. Luxury brands create a dream;

They do NOT solve a problem or respond to a need. We are now in the luxury space, the concept here is living in “excess”, not “necessity”.

2. Luxury brands seldom sell openly;

The product itself is only the commodity, the entire experience you get is essential for the luxury factor, therefore you won’t catch these products in CostCo for instance, you will have to go direct to the supplier or a similar quality location (maybe John Lewis or Harrods).

3. Luxury brands create product scarcity

Scarcity is key; price of course means that not everyone has it, but in addition, your customers will love to tell their friends, “there’s only 100 of these made ever and I have one of them”.

4. Luxury brands are meticulous in everything they do

There is a lot of attention to detail, in terms of Operations, Manufacturing and Sales. There could be logo’s where you do not expect for instance or the softness of the leather used is consistently high quality throughout the product. Importantly, when you buy the product, you get a service that matches it. This means everyone in the showroom or the support services behaves like they work for a luxury brand. They are Brand Ambassadors and they will behave and dress accordingly as well as pull out all the stops when it comes to delivering a luxury level of service.

5. Luxury brands do not sell when advertising;

Advertising is all around brand elevation, or placement, there is rarely a “Sale Now on” advert; it is all about making you aware of how all the things listed above, will entice the customers to buy. As we same earlier, they create the dream, you will come and buy it yourself.

The luxury brand’s marketing strategy will not only target their preferred customer, they will ensure that their marketing reaches beyond their intended audience; those who are not their target market. This strategy supports elevating their brand in the eyes of those who can only dream to afford their luxury items as well as further promoting its exclusivity.

Nordstrom, Inc. is an American chain of luxury department stores headquartered in Seattle and recognised as a market leader in this space. If you look at their website, you get a sense of what they are about. On their homepage, they are not promoting sale items, instead they have a link to a blog talking about “How coveted labels do bold colours and details for the coming season”. In terms of staff as brand ambassadors and service champions, the employee manual at Nordstrom defines it well;

“Use your best judgment in all situations. There will be no additional rules.”( www.nordstrom.com)

When you look at the list we shared above, you can see clearly how the luxury product is being positioned, it is not a necessity, it is clearly a luxury. You can take it, or leave it, but in the customer’s mind, they have to have it. This is key in the messaging and approach to marketing and sales and it is why you will see “Brand Ambassadors” in their stores, not sales people !

If you aspire to attracting more luxury customers, consider which of these tactics, you can bring into your own business. Remember though, this is not a hybrid strategy. You cannot aspire to have a range of luxury products in store, alongside your 99p specials. It is an approach that can get you more revenue and profit, but it needs investment in terms of time, patience and strategy.

TAGS:

 business development, business diversification, business growth, Business Strategy, Customer, Customer Experience, Customer Journey, luxury, Luxury brand, Positioning, Strategic thinking

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What is Success?

Most people aspire to be successful without maybe knowing what it means. Put simply Success can be defined as;

                the accomplishment of a desired aim or objective

So taking this simple idea forward,

(1) Success starts with the definition of an aim or objective,

(2) then you review the available options and make a decision on how to achieve your goal

(3) now can you turn this into a Plan, with actions, dates and resources?

(4) can you keep to the plan, not give up half way through and deviate to something else?

Now we have broken Success down into simple stages and made it easier to follow we should be able to work on being more successful.

Becoming more Successful

There are certain Habits and Characteristics that are common in successful people, these are not necessarily things that they were born with and these can be practiced and developed as you would any muscle in the body.

If we look at the simple stages of Success above, your ability at each stage can be improved with the right level of coaching and mentoring.

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Marketing Genius or Product Excellence?

Which is more important for the Modern Entrepreneur? So many people are spending lots on Marketing, but their idea’s are still failing and in this discussion I want to share my thoughts on why this happens.

In England, you may see posters on the street, or in your local supermarket which say something like “Work from Home, earn £ X00 a day”. Many years ago when I was young and naïve, I responded to one of these ad’s and spoke to a very well spoken lady who explained to me how she had built up a business that allowed me her to work from home, it guaranteed her an income and only needed an hour a day. She was so pleased with it that If I were to send a cheque for £15, she would send me a copy her very special business plan. That wasn’t the end though, should I receive the business plan and not like what I read, I could return it to her, in its original packaging, for a full refund (minus a small administration fee). Wow I thought, I can’t lose here, its another income stream, whilst I keep my day job, plus if I don’t like it, I can return it!!

What I received through the post some days later was a business plan that told me to;

• Buy a Pay as you Go Mobile phone
• Print a lot of Posters saying “Work from Home, earn £ X00 a day”
• Put that Mobile number on there so people who see the poster can call me
• Speak to prospective customers about how they can start a business from home, but don’t give any more details than what I am shared with you on the phone
• Depending on the kind of area you are advertising in, you can sell this idea for somewhere between £10 - £25, the Admin Fee should be at least 60%, so even if people ask for a refund, you are making something

As I quickly understand what I had bought, I thought to myself, “serves you right you idiot”. Now, I would never fall the same mistake again, the advert had made a customer of me …. but not a client. The advert had conned me into buying once, but once I realised the content was poor (non-existent in this case), I would not be returning, no matter how enticing the posters look.

Lets jump forward 15 years and on a daily basis I see Facebook adverts pop-up on my newsfeed making what I think are similar promises. If you are one of these companies, then I am sure your great looking adverts will attract people and you will get some sales. What then though? Your well put together advert will attract a Customer to you, but to convert them into a Client you will need to have something to keep them. This is the same for any business or service provider. You can work hard to develop a brand and image to find customers, to convert them into Clients you will need to have something good to sell them. People are not stupid and it won’t take long for them to realise the real quality of what you are offering.

Lots of businesses, online and on the high street, spend a lot of time and money on Marketing, but forget that this is only a part of what you need to worry about. A critical part has to be good product. When you consider the amount of money you have invested in getting a customer to try you out, you would be crazy to then let them just walk out of the door by not delivering a great product. I am most confused by restaurant owners, who spend a lot of their resources on creating an amazing look and feel, an ambiance, but then serve up average food. Surely, the food must be the most important thing right? When all is said and done, you will only get repeat business if your total package is worth returning for. Every sustainable business is built of returning customers, there are very few businesses that can survive on “One-time Customers”.

Now, I am not saying that you should not be working on the most amazing marketing strategy your can, but be mindful that once you do get the attention of a prospective customer, you have to then have something credible to sell them. Those organisations who work on both their USP and their Customer Focus are the ones who develop longer term success. So it is important to have a great product for sale when you speak to prospective clients, or attend Networking Events and tell them about your company. The best advertising that can happen for you is when one of your customers tells someone how good your product was and this is the position that you want to get your customers to … because then they will become walking adverts for you.

Is there a magic number on what percentage of your time you should be spending on marketing? It all depends on where you are on your business journey. You should have a clear idea of what you want your business to look like, then decide where you are in that journey. If you have a good product ready, then it’s a good time to ramp up the marketing. Remember that advertising leads to customer enquiries and if your product is not right, that customer may not return for a second look. In contrast, if you wait till your product is perfect, then start your marketing campaign, you may be late to the market; your customers may have moved on or the industry may have moved on. Knowing what the correct mix should be, is the skill of the entrepreneur and should they get it right, their reward is success.

In closing, let me urge you to put a lot of focus on supplying a good, no an excellent product to your customers, that meets your customer’s expectations as make this an significant part of your organisation’s strategy.

Good Luck.

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