Now that we’re all experts at—or, at least, veterans of—navigating a real-life troubled economy, we can conclude with fairly decent certainty that 1) things will eventually get better, and 2) the ultra affluent will likely remain so. For those who work in the luxury space, these two factors shouldn’t only confirm what they’ve learned along the way, they should also act as rules of the road going forward—guiding their approach to brand marketing and management in light of an unpredictable economy.
It may seem as though I’m going to tell you to hunker down and brave the storm, knowing that things are destined to get better, but that’s way too passive. So, instead, I’m going to tell you how to actively preserve your brand’s prestige when times are tough. After all, retaining brand equity and price points during a down economy is no easy feat—and sometimes just letting your brand “be itself” is actually a lot of work. For smart brands, though, it can be a counter-cyclical—and definitely counterintuitive—time to actually increase value…and prices.
Following are five ways to drive brand equity and maximum dollars during a fluctuating market:
1. Go big in small ways. A down economy is the perfect time to take market share through innovation (whether product- or promotion-wise). Instead of dumbing down your brand, make it better. Sometimes going big can be accomplished in small forms. Invest in a mobile app that sets your services apart. Introduce brand extensions that increase loyalty (think: the luxury equivalent of the LiveStrong wristband). Or draw attention to a single location—such as your flagship store or website—with initiatives like Ralph Lauren’s touch-sensitive windows and customer QR codes, or Louis Vuitton’s interactive show, in order to spread the news far and wide.
2. Breathe “rarer” air. Becoming even more exclusive for your endearing customers will further ingratiate them in the long term. Do this by creating limited editions that spike sales but preserve (or even escalate) brand value. Consider introducing online concierge services or other exclusive privileges that don’t cost much to develop, but make a big difference in terms of retaining exclusivity and maintaining price points.
3. Manage your inventory. This is important no matter what the market’s doing. Knowing that you have just enough—not too much, not too little—may seem like the antithesis of conveying “abundance.” But the type of abundance that luxury brands want to exude is less a function of overage, and more a function of access to a particular lifestyle. By managing your inventory, you can maintain your prices, which allows you to run a smart and stress-free business. And really, what’s more luxurious than ridding one’s life of stress? (This is not a trick question.) Now that we’ve unlocked one of life’s greater mysteries, here are a few ways to accomplish inventory nirvana:
4. “Six degrees of penetration.” Leverage your faithful to bring their friends and family into the brand. This may manifest in “recommend/invite a friend” promotions, the introduction of most-talked-about items, or advertising that perpetuates the idea of a brand community. Here are some other specific ways you can help your brand loyalists help you spread the word to their own trusted communities:
5. Collaborate. Create special relationships with other elite brands that elevate both brands’ statuses, while simultaneously creating another outlet for distribution/promotion. One way to come together is by creating a special product that allows you both to enter into a niche consumer market and augment typical sales with market-specific products. Make the partnership the basis of a marketing campaign: splash the media, online and offline, in all the ways you already know how…
You may notice that one thing I didn’t recommend: creating a value-version of your brand to cater to, gulp, the masses, out of fear. I’m not saying it never makes sense to do that. I am saying, however, that a down economy shouldn’t be the motivator. Just as it needn’t be a motivator to do any of the above.