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It's personal: How marketing can help margins in luxury goods

clock July 19, 2010 04:05 by author MJBuck

Take a look at the websites of most companies operating at the premium end of the spectrum, and you will usually find something about customer service, generally explicit but sometimes implicit. That’s not too surprising, since it can be an important factor in both a company’s brand image and also in persuading savvy consumers that paying extra for a premium product really is justifiable. How important? Here’s a true story.
 
A couple visited the boutique store of a watch company – a premium brand, though not one of the ‘top tier’. He was looking to buy a particular watch, one of the company’s top-end models. Now, this guy is a pretty serious horologist, with a small but decent collection, and an admirable knowledge of the companies and watches at the high end of the market. He visited this boutique for a specific watch, and wouldn’t otherwise have considered one of this company’s products.
 
The service they received was truly exceptional. First, the salesperson knew everything that could be expected about the brand, and about the range of watches, and then some. There was no hard sell; in fact, the process was so ‘soft’that the selling was almost imperceptible. And once the sale was made, glasses of champagne were produced for the couple, to help pass the time while the watch was adjusted, sized, and prepared for use by the on-site watchmaker.
 
The enthusiast's wife was equally impressed; she has a watch from one of the top French luxury firms, whose name is instantly recognizable by all. She’s a devotee of the watches of this brand, and never considered anything else. The salesperson was happy to show her anything she wanted to see, which included one particular watch that took her fancy, providing all the requested information, and offering some accessories with which to compare and contrast the watch. Again, no pressure, just helpful, informative, low-key, and above all relaxed.
 
What topped it all off came a few days later: a handwritten note from the salesperson, thanking them for their visit and their custom. You might think that’s over the top, fawning, cheesy, especially since it was for the sale of just one watch. Well, I can tell you that the couple were mightily impressed; unless you’re dealing with ultra-luxury megabucks products, who offers that kind of service and attention to detail these days? And the result of making the showroom experience so pleasant and unpressured, and taking a few minutes to write that note, is that the company is firmly on the radar for both of them; it has converted the wife from being a devotee of a single brand to appreciating that this other brand has something to offer, beyond just what is on her wrist. And it's worth noting that the watch she fancied, is one of the most expensive the company offers, equal in price to three or four of the watches her husband purchased, and being a branded boutique, all prices are MSRP.  The exemplary service rendered this acceptable for a product that the cognoscenti always purchase at a discount.
 
This level of service, this attention to detail, can help define and distinguish a brand.  It is a primary determinant of sales margin.  Branding goes far deeper than a logo or a corporate color scheme, it is the form and ethos of interaction with the consumer and with partners.  Brand equity is often the key differentiator between a company and the competition, and the strategy through which a brand is built and managed simply cannot be about the corporate logo, or what font to use; customer service needs to be an integral part of what you do, since it is central to how you are perceived by your customers, how often they buy from you, the emotional investment they make, and how much of their temporal and pecuniary currency they spend.



Common sense, sensitivity and brand images

clock March 29, 2010 01:55 by author MJBuck

Pretty much all companies in the premium consumer market recognize the importance of a strong brand image; after all, to a large extent that's what people are buying into. And for a brand image to work and remain strong, all of a company's marketing and advertising - anything the consumer comes into contact with, in fact - has to live up to, and reinforce, that image.

Having said that, Abercrombie & Fitch seem intent on demonstrating that slavish adherence to the brand image can be damaging. Last year the iconic firm was ordered to pay thousands of pounds in compensation after requesting a worker with a prosthetic arm confine herself to the storeroom - rather than the sales floor of its London store - until winter uniforms, covering up more of her arm, were introduced. Not the kind of publicity they would want, but possibly something which could be dismissed as a one-off.

Abercrombie & Fitch are set to open a new store in Aberdeen, Scotland - only its second store in the UK. Last month, reported Personnel Today, outside the Aberdeen store, posters recruiting new staff appeared - posters which asked for "cool and good-looking people". Now, this isn't directly outlawed by the UK's anti-discrimination legislation, but an older person, or someone with a facial disfigurement, who were turned down for jobs or consigned to the storeroom could claim the posters were evidence of a predisposition to discriminate against them. Even if no action is ever taken, the bad publicity such an ill-advised campaign can generate, in combination with the earlier incident, is hardly good news. It makes Abercrombie & Fitch look like the kind of company which is solely interested in the cool and good-looking, something which may stop the rest of us from even crossing the threshold of their stores.

It is important to recognize that a strong brand image is an essential part of the portfolio of companies striving to attract high-end consumers; but that has to come with an appreciation that slavish adherence to an image which is designed to appeal to a specific niche can alienate potential customers who don't quite fit the profile. And that can impact a company where it hurts most: on the bottom line.



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