Lessons from Luxury and High-End Marketing – When Fewer Sales Are Better
Last year, the luxury British shoemaker Jimmy Choo was sold for a staggering $1.2 billion dollars.
It revealed the huge value there is in luxury brands.
These traditionally very private brands seem to defy traditional business logic – actively turning potential customers away, making themselves less available, and growing while remaining scarce.
Traditional logic for retail, ecommerce and direct response is:
VOLUME: more sales
VELOCITY: faster turnover, shorter sales cycles
VALUE: competitive value-for-money
When selling luxury or high-ticket items, the rules become:
VOLUME: significantly fewer sales
VELOCITY: significantly slower sales cycle, many barriers to the sale
VALUE: significantly higher value per sale
The loss of sales volumes, and the (very, very) slow sales velocity can mean a luxury item can sell for 100x to even 1,000x the value of a similar retail item.
The whole theory behind luxury sales defies all traditional logic for selling online.
Online, where the sales process is democratised, sales happen fast; and sales scale to theoretically unlimited volumes; but the highly competitive nature of the web means prices get driven down.
The web is a powerful tool for outreach, community-building and creating demand among potential customers.
But selling luxury and high-ticket items online has the potential to damage reputations and “cheapen” the product by making it “too available”.
So, how do you strike the right balance if you’re selling luxury, prestige or high-ticket items online?
Jean-Noël Kapferer – one of the world’s foremost experts on luxury branding and marketing – contrasts some of the pillars of the luxury sales process in “Kapfener on Luxury” – and how they create value.
Three contrasts he makes, and my own notes on how they apply to web sales, are below:
Luxury Controls Access
In a sense, luxury brands say “we decide where and when you buy”.
Stores that sell luxury and high-ticket items are often deliberately few and far between – and access is often controlled, with queues of customers lined up out the door.
From a web perspective, this translates to displaying less information on your website, and potentially hiding significant information behind a metaphorical velvet rope that you only allow some customers access to.
Scarcity of information creates value around that information.
Scarcity of access to your time, as a service professional, creates value around access to your time.
Scarcity of access to certain products or services (i.e. “by invitation only”, “by approved application only”, or unique VIP products not available to the general public) also create value around those products.
Luxury Controls Space
Luxury brands are – in many senses – like religions.
There are “temples”, ceremonies, and initiation rituals – all of which are carefully controlled and choreographed.
These are hugely powerful tools used by many brands that sell products at higher price points to their competitors.
Consider Apple – which in many ways sells products that are technologically inferior to competitors Dell, Samsung, and Microsoft.
Yet Apple products carry a much higher price tag. Every part of the Apple experience – from entering an Apple Store, to unboxing, to hitting the “on” switch for the first time – is carefully choreographed.
(Is it any secret why people talk about “the Cult of Apple”? Or – at $752 billion dollars – why Apple is the largest company in the world, by market valuation?)
Temples, rituals and ceremonies are almost impossible to replicate online.
So high-end sales typically need a high-touch and offline element.
Borrowing from luxury marketing:
What rituals are there in your sales process?
What does a prospect get sent before a sales call?
Can you turn a call into a visit in a particular space?
What rituals are there on the phone call?
What happens after the sale is made – is there an initiation, or some other ceremony celebrating the sale and marking the customer as a member of a tribe?
Luxury Controls Time
Traditional sales is about making the sale quickly.
But the nature of the luxury sales process is that it becomes long and drawn-out with its rituals and ceremonies.
The waiting time for a Hermes Birkin handbag is in the years – and the price can be as much as $200,000!
Men – we might think that’s crazy – but consider the waiting list and price tag of a next Tesla here in Australia.
Or (better yet) the long process behind buying a new Ferrari – which can also take years to purchase, be produced, quality controlled, and delivered – and may also see you joining a waiting list for a popular model.
Waiting lists demonstrate your value as a provider – and scarcity does create demand in itself.
In 2005, I was running marketing for a highly respected professional speaker – who was running an event. Ticket sales had slowed, and we had placed a “sold out” sign on the event booking page while we did a final audit of numbers before selling the final few tickets.
Within minutes of the “sold out” sign going up, we received a sudden burst of sales enquiries from people wanting to be placed on a “waiting list” – just in case someone canceled.
It’s a dirty trick that lacks credibility if you use this technique under false pretenses – and I don’t condone lying to make sales. (You can sell your soul to make some money, but you can’t buy it back.)
But, like all dirty trick, it works because it speaks powerfully to something deep within us.
Header image via the Geograph project collection. Copyright on this image is owned by Martin Addison and is licensed for reuse under CC BY-SA 2.0.
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