Last month’s column highlighted six of ‘the dirty dozen’ challenges/opportunities facing marketers of luxury products and services:
• The rise of collaborations and partnerships
• Keeping pace with changing technology and seamless integration of digital and traditional media
• Weak phone protocol
• Leveraging loyalty
• Better listening to customers and employees - 'the team'
• Banishing arrogance and apathy
Based on extensive conversations with top management and marketers of luxury brands, here’s our last six:
The New Public Relations: In the old days, public relations in the luxury arena was mostly a succession of lavish events. Not only have brands scaled down in their event production, but the smartest are taking the high ground as thought leaders on trends in the market, better “educating” their best customers as to why great products or services are worth the price, creating in-store experiences that generate buzz, while giving their customers a better appreciation of their products and services.
Top Down To Bottom Up. From “Power Over” to “Power With” (See Judith Glaser’s brilliant Conversational Intelligence): The old military “command and control” or what used to be called “the mushroom principal” (keep ’em in the dark and heap fertilizer upon them) is dead. How is your brand enabling your people on the line, those most directly facing your best customers, to say yes? How are you efficiently communicating to top management their real-time intelligence on the market, competitors and, most importantly, customers’ wants and needs in order to better serve and sell? Those that engage the people on the line as partners, always sell more, profit more and shine in the eyes of the customers they serve.
Enter The Millennials: 86 million of them (versus 80 million boomers), computer savvy, impatient, ambitious and redefining the meaning of marketing, advertising, sales and service. One-third of them are fast track managers impatiently waiting for their boomer bosses to retire to make their imprint on the way brands are defined. One-third have gone back to complete their graduate MBAs. One-third will be the new crop of successful entrepreneurs. When it comes to social issues and how brands behave, the millennials buy on brands’ records of good corporate citizenship. The challenge of engaging them and winning share of their wallets and loyalty is one of the biggest facing luxury brands.
Partnering With Best Customers: Conventional wisdom once held that the richest, most affluent customers would not take the time to advise brands on the quality and effectiveness of their products, communications and service. No longer. More and more luxury brands are creating customer councils: intimate groups of their very best customers who can account for as much as 60% of a brand’s revenue. Hosting intimate, facilitated events to better understand from a best customer’s perspective how to improve every aspect of a brand’s approach is becoming more and more common.
Educating Customers About the Price/Value Equation: Only 10% is inherited or owned by celebrity. Of that 10%m only 4 % is inherited. The other 90% is self made. The 90% — today’s most successful, richest consumers — are children of the working class. Not having been “to the manor born,” they are hungry to know what is the best of the best. The smartest luxury brands are recognizing this rise of connoisseurship and, in a non-condescending ways, “educating” best customers through experiential events that make for a much more knowledgeable best customer. Once buyers understand the inherent quality of a luxury product or service, they rarely balk at paying premium price.
People: Finding, educating, motivating, compensating and succession planning for the best and brightest continues to be at the top of most luxury brands’ agendas. Great people are increasingly hard to find. Experience counts. But aptitude and style now count even more. Increasingly, brands are hiring more for aptitude and style; educating, nurturing and grooming those that have it on the fundamentals and corporate culture of the brand.
Recognizing that all smart luxury brands rank and act on different issues for good and different reasons, we would be most appreciative for your comments and additions to “the dirty dozen” which would be interesting to share with our readers. Thank you.
Next time around, stay tuned for “The Conundrum With Clout,” a look at the soon-to-be most powerful group of luxury buyers ever. Thanks for the luxury of your readership.