Category Archives: catering to picly clients

The Top 10 Most Read Articles in this Blog for 2015

by James D. Roumeliotis

Top 10 Articles for 2015

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As in every year, I have once again rounded up the ten most read/popular articles — this time for  2015. The following ten captured the most attention by numbers and from 154 countries in all. See them all below in descending order.  Your views are always encouraged including subject matter you think I should be covering more of.

THANK YOU for your readership and I look forward to feeding your mind with much more business practical food for thought this year which can be applied for timely results.

1 Luxury vs. Premium vs. Fashion: Clarifying the Disparity

2 Perceived Quality: Why Brands Are Intangible

3 The Art of Selling Luxury Products: Brand Story Telling & Persuasion

4 Mass Customization & Personalization: The Pinnacle of Differentiation and Brand Loyalty

5 Exceeding the Hotel Guest Experience: Anticipating and Executing Desires Flawlessly

6 Brand Awareness: the influence in consumers’ purchasing decisions

7 The Ultra Luxury Purveyors: Lessons from brands catering to the richest 1 percent

8 Identifying and Catering to the Discerning Consumer: Quality and Service Above All

9 Start-up Essentials: A Universal Roadmap for Starting a Business — Infographic

10 Product Features vs Benefits: The Brand Differentiation

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Creating Purchase Desire by Means of Alluring Product and Package Design

by James D. Roumeliotis with contribution by Thomas C. Mylonas (Creative Entrepreneur & CEO of Dot Kite Design-Branding)

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Fancy Food Packaging Design

Packaging for renowned chef Enrique Olvera by Ponxo Design (Mexico/Spain)

Beauty and design in all things is artistic, engaging, stimulating and creates a sense of comfort. It’s also a very personal thing. Creativity is beauty in art form. It starts from nothing, utilizes mind exploitation, imagination then something awe inspiring is produced which stimulates the mind and senses. Apple comes to mind, first and foremost as it has successfully created not merely electronic entertainment consumer merchandise, but products of desire which are visually appealing, user friendly and ergonomically designed through a minimalistic approach. Tesla Motors has not only created an environmentally friendly car but taken the mundane automobile to greater heights in design, functionality and gratification with the driving experience.

Done well, minimalism is highly nuanced and widely engaging as it’s a catalytic blend of functional essence and aesthetic elegance. Equally impressive in the design aspect was putting plenty of thought into getting its packaging right. The shape, details and texture of each package is just perfect and a unique work of art in its own right. It is quite evident that Apple and Tesla, amongst others, went above and beyond to get the overall product experience above and beyond customer expectations.

Innovation perception

What is design? In the simplest form, it is creating an aesthetically appealing and functional solution to a problem. Innovation has the same concept without necessarily having the creative appeal. Problems that design and innovation resolve vary from a product or service that functions poorly to not having enough market share. In that case, you innovate and design a new solution. Design and innovation are related at another level. If your company is designed in the right way, then it will stimulate innovation. This can be done by designing your processes so that:

  • Employees have the time to work on their own projects;
  • People are motivated to generate new ideas;
  • Others outside of the company can contribute (outsourcing);
  • You have time to listen to new ideas;
  • Experimentation and risks may be taken.

Investing time and money into new ideas may be the most difficult barrier to generating tangible solutions that can be executed. This is because most companies are averse to taking risks, especially large companies. However, once the processes in a company are designed so that new ideas can be followed up on, more ideas will follow.

Even though design is not so easily categorized, there are two main types of innovation; radical and incremental. One can also say that a new design is radical or incremental. An incremental innovation is basically an adjustment to an existing product or process while a radical innovation shakes up the entire product or process so that you will have something distinctive.

You cannot say that one form of innovation is better than another. It all depends on the market and how you communicate your new design. So, will a new design or innovation have a positive impact on your bottom line? No one will know from beforehand, but the most innovative and design conscious companies are doing well, even during an economic downturn.

Clever design significantly increases sales and improves brand performance

There are many ways of seeing the value of design. For instance, you can measure sales and relative value as an output of changes in design. Design can also improve your standing amongst rivals and give you a competitive advantage. The Design Council published a report where facts and statistics concerning the value of design are highlighted. One interesting statistic is that design conscious businesses can expect a return on their internal design investments as high as 125%. That’s quite an impressive return compared to other types of investments made in a business.

What may be obvious is that if you have high quality design, you do not need to compete with your competitors on price. If you design your product and/or service well, then customers will enjoy what you have to offer and continue to be loyal to your company – even if the price is higher than the nearest competitor. That’s because you offer something unique and of a higher standard/value.

If you would like to increase your market share, then being a design savvy business is a wise option. Businesses that did so increased their market share by 6.3% through design. This could be due to several factors, such as those mentioned above concerning the increased value of the product or the notion that you will set yourself apart from the competition.

Furthermore, companies that grow rapidly are almost six times more likely to see design as an integral part of their business compared to those companies that remained static. The effects of design are hard to see, but these hard facts prove the value of design.

Cutting into consumer indecision amongst the competition

When you head to the grocery store to pick up a product such as cereal, do you purchase the same one each and every time or, like many consumers, are you comparing and contemplating about which one to grab?

When presented with a large range of choices to fulfill a need, it is in human nature to become confused, thus the inability to quickly make a choice. When we spend too much time comparing the plethora of options we are presented with, the functional differences between each of them soon become blurry. Once the functional differences lose importance, the peripheral aspects take precedence. This means that whichever product’s ad, spokesperson, or packaging color stands out favorably in our minds will most likely influence our product purchase.

What does this signify for those responsible for branding and communications for such low-involvement products? The peripheral aspects must stand out for products in categories where the number of substitutes is vast enough to cause customer confusion close to the point of purchase. Axe, a brand of male grooming products owned by the British-Dutch company Unilever is a good example of this. Their marketing messages are well known and hold a great amount of recall. They are likely to be quite popular in the deodorant and body spray isle where men are faced with more brands than they can count. The functional superiority or inferiority takes a back seat in such a situation.

Those factors differ for high-involvement goods, such as in cars, watches and so on, where the customer is not likely to make a grab-and-go purchase. In these cases, functionality, brand values and associations begin to play a key role.

Product Industrial Design

Form and function

Product designers work on new products with two aspects in mind: functionality and aesthetics. Through their work, designers connect the industry with consumers by translating a concept into something that adds extra value to consumers.

A competent design team should have an excellent understanding of people, culture, and societies. This knowledge is applied to its deep knowledge about design and includes, but is not limited to:

– Materials
– Components
– Production techniques
– Practical experience
– Financial insight

In this way, products are developed that not only have an appealing design and bring out emotion, but are also practical and of high quality. The products will have the right combination of feel, detailing and ease of usage. Pricing will then determine the value equation. Here are sample ingenious packaging designs in the consumer goods sector http://bit.ly/1clAHSN.

Creative packaging leads to increased sales

Packaging is as important as product itself. The main objective of packaging design is attracting a buyer’s attention to the product. Along with making the product look amazing, it should prompt and influence the customer into buying the actual product as looks do matter. No matter how good the product is, if the packaging is dull and inferior looking it may compromise sales of its contents. Consequently, modern, creative and clever packaging design plays a major role in inspiring and selling any product. Packaging design should include labeling which expresses and communicates key information to the end-user such as benefits, product information, usage directions and perhaps a story.

Some consumer product companies are using a more educated market approach. For instance, to stand-out on the crowded supermarket shelves they introduce art in the printing of their packages and/or labels inviting the consumer to reach-out for the product to learn more about it.

A case in point, after more than two decades in the limelight, California’s Kenwood Vineyards‘ highly-acclaimed Artist Series Cabernet Sauvignon reigns as a premier marriage of fine art and fine wine. The combination of the fine art of wine-making with the work of contemporary artists creates an elegant, easily identifiable package, while promoting beautiful artwork at the same time. Other brilliantly designed wine bottles can be viewed at this link: http://bzfd.it/1AubMIH

Saddlers Creek Naked Wines minimalist design

Saddlers Creek Naked Wines minimalist design

Food and water product branding via brilliant packaging

Taking bottled water to a whole different level for uniqueness and attractiveness requires broad imagination and creativity if one is to turn an essential daily commodity to a product with a premium or luxury cache. The most common approaches to differentiating water that the marketing professionals apply are:

  • Fancy bottle and label packaging – shape/color/functionality
  • Source and story telling
  • Health qualities – promote fitness
  • Flavor enhancements – better tasting than plain drinking water
  • Ways to drink – creating a certain lifestyle
  • Adding unusual and compact/practical sizes
  • Limited price offers or bundling with other products
  • Solid and extensive distribution channel with retailers and institutional clients
  • Sponsorships for additional exposure and significant opportunities for distinct marketing

Here are several eye catching designs – some of which you may mistaken for premium vodka http://bit.ly/1HwA01J.

How about branding water and putting the world’s most expensive price tag on it predominantly by visual appeal and perception? That’s just what its founder and president, Kevin G. Boyd, did for Bling H2O which he labels it as “luxury” and charges about $44 per bottle. He has accomplished this through a clever marketing strategy such as:

– focusing on distribution of limited editions;

– creating a fancy glass water bottle to add cachet;

– conveying a glamorous story with his marketing messages;

– has celebrities sipping his water and as a result, gaining massive publicity.

Bling H20 bottle design (Image processed by Code Carvings Piczard)

Bling H20 bottle design
(Image processed by Code Carvings Piczard)

If that weren’t enough, Kevin Boyd introduced the Dubai Collection’s “The Ten Thousand” with a price tag of $2,600 per bottle. This item has over 10,000 hand applied Swarovski Crystals with each bottle custom made to order, numbered and comes with a pair of white handling gloves and an attractive case. There appears to be a market for it – albeit a very small one.

In food packaging, unique examples of standout and alluring packaging design with storytelling can be found with the following products:

Stylish yet environmentally friendly

With the rise of consumer protests and a heightened concern for the environment, many modern companies are responding these days by making every effort to produce both “green” products and packaging that is biodegradable or, at the least, recyclable. This includes the reduction of the size of its packaging and demonstrates eco-friendliness which can bolster their image and attract additional new clients – especially those who are environmentally sensitive.

“While eco-friendly packaging is a recent phenomenon, it is already a large and rapidly growing trend,” observes Susan Selke, Ph.D., acting and associate director of the School of Packaging at Michigan State University, East Lansing.

Some of the companies with well-publicized use of sustainable product materials and packaging are Nike, Starbucks, Estee Lauder, Unilever, Dell and Hewlett-Packard to name a few.

The way forward in product and packaging design

The approach to creativity is the way an artist might stand before a new canvas, on which a beautiful painting can be crafted. Staffs who work in a creative environment should be given plenty of leeway to utilize their full potential – the freedom to flourish. Not doing so limits their artistic talent and deprives the company from taking a leap at the competition.

By having a good understanding about materials, production techniques and manufacturers, striking designs can be created that assure loyal partnerships between consumers and manufacturers. This saves marketing costs in the short term and creates more stability in the long term.

The primary goal of packaging design is to entice customers’ attention. For this purpose, package designs cannot simply inform the customers, but also provoke feelings and communicate emotions. An effective packaging looks attractive, impresses with its creativity and not simply appealing to have on the shelf. As a result, it stands out in an increasingly competitive marketplace.

Design for Customers not Brands Quote

Product and packaging design should also clearly communicate a company’s brand identity. As such, the brand team should be asking: What is our product? What is its unique selling proposition (USP)? Who is our primary target client? What is our company’s mission and vision? Accordingly, the product and packaging design ought to be consistent with the brand identity, as they will help determine the size, shape, colors and materials used with the product and packaging.

Amongst other impressive statistics, stocks of design-led firms outperformed the FTSE 100 by 200%! That should be compelling enough to make product designs consumer appealing, along with practicality and quality built-in to them, precedence. If a manufacturer is to create and produce new products, as well as re-design/revitalize existing ones, why not put some creativeness into it, like industrial designer Philippe Starck, who turns mundane items into objects of desire or Apple who took personal electronic devices to an extraordinary level. It is the “wow” factor accompanied by emotionality in branding.

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Exploring the Luxury British Automotive Total Customer Experience: Part 2 ‒ Jaguar Cars

Jaguar Lifestyle Image

Viewpoint by James D. Roumeliotis and Petrona J. Joseph

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In part 1 of this 4 part series, the Aston Martin automotive brand was the star focus. In this part, the spotlight is on the customer expectations with the British luxury automaker Jaguar Motors. For over 90 years, this high-status marque has pushed the boundaries of what was once considered impossible in the automotive industry.

Sir William Lyons – founder of Jaguar Motors, combined performance and beauty in the designs and manufacturing of the ‘Jag’. A feat unprecedented of his time, his uncompromising vision set new benchmarks which is still followed by the manufacturer until today. Despite a tumultuous period during the Ford Motor Company ownership, its present owner (the Tata industrial conglomerate based in India) has invigorated a new model lineup together with a bold marketing strategy through a substantial cash infusion. It also acquired, from Ford, the Land Rover luxury SUV brand.

With the big news of Jaguar’s upcoming justDrive™ ‒ an industry-leading app technology that integrates multiple smartphone apps into a single, voice-activated in-car experience; it is now a leading contender amongst its competitors.

Jaguar Interior

The Jaguar driver profile

The Jaguar customer is typically a refined man or woman – for the most part, a university graduate with a dynamic presence, and status symbol visible. Moreover, the Jaguar driver can be classified on some levels to the “blue temperament” – which is an analytical, prudent, detail-oriented and precise personality. In serving a Jaguar customer, one must not sway into personal details on the onset. In addition, the sales consultants have been trained to not ask many open-ended questions but rather ask close-ended questions and listen attentively. I also suggest note-taking, because the majority of Jaguar drivers (most in Executive positions) do not like to repeat themselves. By taking notes, one demonstrates the prospective Jaguar owner that you are unconsciously like them by mirroring their behavior.

Following is an outline on how authorized Jaguar dealers respond to customers – from Sales to Service.

Initial Sales Consultation

– Greeted promptly by the receptionist

– The sales consultant must greet the potential Jaguar consumer with the appropriate handshake (particularly the dominant handshake)

– Ask close-ended questions to ensure need and quality prospect.

– Initiate test drive

– Review objectives & listen to this customer clearly while note-taking

– Warning- there is a fine line between explain the benefits to this customer versus being aggressive in your approach. Allow this customer time to review the advantages of owning a Jaguar.

– An overnight test drive is quite rare, however during the test drive, outline the benefits of the drive and the technology.

Sales Process

Allow the appropriate time for this customer to choose options, colors and technology combinations. At this point, once trust and careful attention has been established- then proceed with open-ended questions.

Delivery

– Short and succinct (keeping in mind that this customer is discerning and either a professional practitioner, executive or a successful entrepreneur who may have to return to the office for an important meeting.

– The customer should be shown the basic functionality of his or her new Jaguar

– The customer should be asked to reschedule a one hour detailed information session at his/her place and time of convenience.

Jaguar Convertible

The automobile which reflects a luxury lifestyle

Premium and luxury car owners seek the total package with the car brand they choose to be loyal to as they would when checking in to a luxury resort. They seek more than just a vehicle they can enjoy from point A to B. In practice, its owner might use this automobile to commute to work, but this is not sole incentive. Jaguar is clearly a brand with authenticity and heritage. The principals shaping the consumer’s buyer behavior go beyond intention. There is a sense of engagement in fulfilling a dream. It can be to make a social status statement or a personal style choice. Whatever it is, it is not an unconscious choice. The codifiers are clear: This is who I am, and what I believe in. Ultimately, it can also articulate the owners’ sense of self-worth and their emotional aspirations. The most important emotional benefit is that a product of this caliber and class expresses itself when the consumer can declare: “It suits my lifestyle.”

Discreet and unconventional selling approach

Jaguar in North America is testing, in several major cities in the U.S., a novel way it presents new vehicles by showing appreciation to its most loyal customers, which it labels as “super-loyalists” by hosting elaborate receptions in their homes. In turn, the “super-loyalists” invite friends and associates who may be interested, and can afford, one of Jaguar’s elegant models. This idea takes away the perception of any high pressure sales normally associated with auto sales at dealerships.

Jaguar Classic Car

Dealers of prestigious auto brands as custodians of heritage

A luxury dealership’s ultimate goal is to make an entire ownership experience a pleasure ‒ let alone a Jaguar. They strive to build relationships, which is why so many of their clients remain loyal. A luxury dealership serves as a guardian for the rich heritage of their prestigious brands thus make certain to continue their legacy.

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Exploring the “Super Luxury” British Automotive Total Customer Experience: Part 1 ‒ The Aston Martin

Aston Martin Prestige Image

Viewpoint by James D. Roumeliotis and Petrona J. Joseph

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When we encounter the word “luxury”, images of: seamlessness, awe, the rarity factor, cache, opulence, aristocracy, supreme workmanship, stellar service and reverence come to mind, amongst others

Now, close your eyes for a moment. What images come to mind when you consider mention of the following vehicles: Aston Martin, Jaguar, Bentley and Range Rover? That’s what we will be analyzing in this four part series of the luxury British automotive icons and the above average expectations of consumers seeking such extravagant motor vehicles.

What qualifies the authors to give such commentary? Having worked and served — most notably with prestigious brands such as Gucci, Aston Martin, Jaguar, Bentley and Range Rover, as well as with mega yachts and coupled with extensive research and consultations in this domain –, both can accurately define the exceptional treatment tendered to a HNWI (High Net Worth Individual) luxury seeking discerning consumer. Brands which qualify to serve this exclusive market provide attention to detail, a plethora of product knowledge/competence, and discretion along with an implementation of an anticipated flawless post-sale/follow-up policy.

Price aside, a luxury car brand should embody cache, exclusivity, pedigree, craftsmanship and limited production. R.L. Polk and Company, a global automotive information and marketing firm that provides solutions to automotive and related industries, has re-defined the term with the appellation, “super luxury”, ‒ i.e. cars that cost over $100K. This category includes brands such as Rolls Royce, Bentley, Maserati as well as the Aston Martin being featured here.

Aston Martin Showroom

Aston Martin: License to thrill

We begin with the initial luxury automotive brand in this four part series: Aston Martin. This high valued motor car producer brings images of James Bond, a ladies gent, British heritage, sophisticated technology, sex appeal, speed, agility and soul.

Considering the above persona, the makeup of a typical Aston Martin customer.is a male (no gender discrimination intended), in his late 30’s early 40’s, handsome, successful, possibly with an attractive spouse (or if single, a striking companion), possesses a deep knowledge of refined luxury, knows what he wants virtually at any price level, and enjoys adventure, as well as thrives at constant new challenges.

Initial impressions and consultative sales process

When a prospective owner, or existing customer of an Aston Martin walks into any impressive looking Aston Martin showroom, the total experience should normally result as follows:

– To be greeted initially by the attractive receptionist/hostess (brand ambassadors) by the owner or General Manager of the dealership;

– Introduce the prospective client to an Aston Martin specialist;

– Offer a hot or cold fine beverage;

– Be given a tour of the impressive premises;

– Exhibit the various models and a test drive initiated during which time rapport is being built;

– Offer of an overnight test drive to create the feel and experience of the automobile and its performance characteristics;

– Thank and greet the prospect by the dealership owner or GM upon returning the vehicle followed by the sales specialist;

– Customer’s contact information should be entered into the dealer database (CRM);

– If a sale is initiated – the sales process should ensue. However, if a sale does not occur, effort should be exerted in a discreet and pragmatic manner (consider “consultative” selling) to close the sale. Statistics show that 60% of car purchases have been consummated on the spot when they received what they considered was an excellent presentation and demonstration. Either way, a follow-up is imperative within 24 hours.

Sale & delivery

– An appointment should be set for delivery;

– Upon arrival to pick-up the vehicle, customer should be congratulated by owner and/or GM;

– Explanation of vehicle model should be thorough along with a post-sale follow-up the following day;

– Customer should be offered a token appreciation for his/her business. This can be in the form of champagne from a strategic partnership for example, Moët & Chandon and/or an additional gift in good taste.

Aston Martin Showroom Lounge

Exceeding customer expectations for the discerning client-driver

To succeed in gratifying the seemingly sophisticated client, a high-end organization should develop a comprehensive strategy along with efficient implementation tactics. These include:
– Having a clear and unique value proposition that hooks them;
– Consider exploiting the five senses to attract and retain them – categorized as “ambiance”/”sensorial” marketing and branding;
– Staff must be customer centric, patient, empathetic, and good listeners – remaining calm under duress during client interactions;
– Employee retention – hiring for attitude and training for skills;
– Utilizing a hands-on approach;
– Probing clients’ specific needs/requirements – recognizing their motivations – reading their body language;;
– Earning their trust and respect by exuding confidence, empathy and transparency;
– Offering a personal touch – individualized attention with customized solutions – It’s all about the customer;
– Being frank and transparent with pricing, offers, proposals and promotions;
– Proposing an expansive product selection and service options;
– Outstanding and consistent levels of customer service throughout the organization;
– Reducing or eliminating waiting times – whether on the phone (reservations, customer service etc.), as well as for service or an appointment at the physical location;
– Offering customer loyalty programs through joint collaborations with other luxury purveyors – a great way to make them feel special by receiving something extra;
– Asking for feedback with regards to service and product experiences for ways to improve those experiences. Discerning clientele are typically strongly opinionated and relish giving their views.
– Implementing the latest technology with all touch points.

The Aston Martin automotive brand with its power, beauty, soul and heritage as its tagline delivers to a specific and limited market segment by giving way to its consumer target to acquire their models they associate with a “luxurious and sporty lifestyle.” The brand is essentially a status symbol.

Brand loyalty is about building an emotional, and in some cases, irrational, attachment in a product. “Total customer experience” is not an option but rather compulsory as part of an alluring brand. It takes savvy planning, execution and perpetual refinements to stand above the crowd. It’s how you get noticed and remain relevant. Luxury brand desirability is driven by standout design, craftsmanship, as well as what is felt.

A typical Aston Martin showroom portrays a super luxury car brand able to offer a “wow” factor to its intended customers with an unconventional retail experience which exploits the five senses. This includes a showroom floor with ideal lighting, the various models well positioned/presented, impeccably dressed/groomed staff, and an upscale lounge ‒ overall, presenting sight, sound, smell, touch sensorial experiences and creating a feeling of lavishness. Some will go as far as offer art exhibitions on the premises, five star dining events and wine tasting to name a few. It’s what its type of clientele crave.

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The Genuine Luxury Domain and Its Country of Origin: Why the Latter Matters

Viewpoint by James D. Roumeliotis

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Made in Italy - NO in China Tag

With the proliferation of Italian and French luxury brands bearing the ‘Made in China”, ‘Made in Turkey’ or made elsewhere remote from their land of origin, it makes one ponder whether the brands are diluting their image for the sake of lower prices and higher profits. This begs us to revisit the question of what constitutes an “authentic” luxury product and whether manufacturing in a country unknown and unfamiliar for evoking luxury is a good long term strategy for the brand with heritage.

Luxury vs. Premium vs. Fashion: Clarifying the Disparity

Definitions of “luxury” vary enormously and depend on with whom you discuss the topic and in what context. The term “Luxury” has never been something easy to define. It is relative, mysterious and elusive. In essence, it revolves around subjective criteria in the mind, which creates a mood and what is generally referred to today as lifestyle.

The proliferation and marketing misuse of the word “luxury” on many products across sectors is quite evident. Brands either do it out of ignorance or to enhance the desire for the consumer to purchase their products.

Gary Harwood at HKLM, one of the founders and directors of a leading strategic branding and communication design consultancy, affirmed:

A luxury brand is very expensive, exclusive and very rare – not meant for everyone. When it ceases to be these things, then it’s lost its exclusive cachet. Commoditizing luxury brands and making them more accessible to the middle market puts them at risk of becoming ordinary, common and less desirable. And the more available a brand is, the less luxurious it becomes.”

Authentic luxury brands compete on the basis of their ability to invoke exclusivity, prestige and hedonism to their appropriate market segments not the masses. There is a classic litmus test:

  • Is the product manufactured in artificially limited quantities? (i.e. the rarity factor)
  • Does the firm have a story to tell? (i.e. history & pedigree)
  • Is the firm portraying a unique lifestyle?
  • Is craftsmanship the hallmark, which delivers products that only High Net Worth individuals can purchase without question?
  • Does the brand offer authenticity?
  • Does it implement an absolutely no discounting policy?
  • Is the product (and at least most of its materials/parts) manufactured only in its country of origin?

Luxury is not premium – and premium is not luxury. They are two dissimilar categories catering to different market segments.

France - Italy Cufflinks

Luxury Product Roots and Perception: Key Factors of Authentic Luxury

A luxury product is rooted in a culture and comes along with a small fragment of its native soil, of its heritage. This proposes that in order for a “luxury” product to remain true to its origins, as one of its main criteria, its production shall remain in the country of origin ‒ whether that is France, Italy or elsewhere (most notably in Europe). Tempting to relocate production elsewhere can cause the brand to lose its lustre and character.

Professor Jean-Noël Kapferer, an author and lecturer at the Kellogg Business School (Northwestern University, USA), as well as at HEC Paris, Europe’s premier academic research center on Luxury, clarified his views on this subject matter by stating that:

Looking at luxury companies’ own attitudes, there is a clear segmentation, based on their brand positioning and business model. A first group (such as Louis Vuitton, Hermès, Chanel) emphasize quality and heritage as the main sources of their incomparability. They are patriots. For them, a country of origin is a homeland, much like the soil in a vineyard – a miracle made of earth, nature, sun, rain, and sophisticated human labor, loaded with culture. For them, ‘made in…’ tells a whole story, tying production to a long heritage.

He further affirmed that:

“To remain a true luxury brand, following the luxury business model, entails sticking to local production. This is not an easy task for many luxury brands. Those that comply must create the conditions that are necessary to sustain this production. This is why they often buy their local sub-contractors in case the latter go bankrupt, to be sure to keep alive a historical know-how that might otherwise disappear.”

France and Italy are considered the leading countries for luxury and trend setters for clothing and accessories. Luxury watches (better known as “timepieces”) are manufactured in Switzerland ‒ the undisputed leader in this category. London, is considered to be the luxury spirit capital of the world with Burberry as the most prominent luxury brand. Whereas, Germany Italy, as well as the UK are for luxury automobiles. However, what they do produce elsewhere in the world are not ‘luxury’ but rather their lower priced “premium” derivatives (think BMW, Mercedes and Audi). Other illustrious automotive names, such as Ferrari and Rolls Royce, continue to manufacture solely in their native country.

Private vs. Public Luxury Purveyors

For the good of their distinguished image and cache, top-tier luxury brands should remain small privately held, with no pressure to sell and family run beyond the reach of speculators. These companies are managed, and their equity held, by those families. Consequently, management of brands, people and profits are done with the long term in mind, not necessarily the next quarter, which most investors would not have the patience to deal with if the luxury brand was publicly traded. In essence, the privately held have the luxury of taking risks as they desire and staying the course when they don’t. They have the freedom to invest for 5-10 years without receiving a financial return. In comparison, the publicly traded ones, which are accountable to their shareholders, are constantly under pressure to trim production costs and increase revenues and profits which lead them to cater to a larger audience ‒ the mass affluent. So much for all the elements of ‘genuine’ luxury purveyors which are doing away with scarcity and exclusivity.

The most prominent smaller and privately held ‘authentic’ luxury brands which fulfill every criteria ‘luxury’ truly exudes are as follows:

Soft Luxury Goods (high-end apparel, leather goods and exclusive fragrances) include: Hermès (70% owned/controlled by the Dumas family ‒ the descendants of its founder), Chanel (100% ownership by the Wertheimer family) and the niche perfume house, Creed Fragrance Company founded in 1760 (100% ownership by the Creed family ‒ descendants of its founder).

Hard Luxury Goods (products such as watches, jewellery and pens) include: Rolex, Chopard, Patek Philippe amongst others.

According to the Millward Brown luxury brand survey, which includes the large luxury groups, Louis Vuitton, Hermes, Gucci, Chanel, LVMH (Moët Hennessy Louis Vuitton), Rolex, Cartier, Fendi and Tiffany & Co. respectively, are the most successful family owned luxury brands. Moreover, research done by SDA Bocconi, renowned for providing world class luxury education, revealed that unique characteristics of most family-owned or managed business fit almost perfectly with the competitive logic of hard and soft luxury approaches. Needless to say, their management culture, retaining the mystique (crucial in the ultra-luxury domain), and long-term decision approach are all instrumental for cultivating and preserving their brand heritage.

Hermes 2014 Ad Campaign

Hermes 2013 Ad Campaign

In the Final Analysis

There should be no confusion between luxury and premium or even a fashion category. When someone buys a luxury object, he/she purchases craftsmanship, cache, pedigree, made in limited quantities, a special place in the world of lifestyle and exclusivity (made for the few). The premium business model is based on the manufacturing of best-in-class products, with an image of style. Fashion is a general term for a popular style or practice, especially in clothing, foot wear, and accessories. Fashion references to anything that is the current trend in look and dress up of a person. Usually not timeless. A “luxury” and a ‘premium” product can be both – as in a tailored made fine wool suit for example.

Therein lies the major differences between a luxury product and a premium product. It’s legitimate for a premium product to seek out the most suitable and most economical manufacturing location, so long as quality and service levels can be maintained.

Brands such as Nike, Adidas, Ralph Lauren, Hugo Boss, Tommy Hilfiger, amongst others, are doing an exceptional job of selling solely an image to the masses. Indeed, far from being a genuine ‘luxury’ brand, most of their products are manufactured in low labor countries such as China.

The ‘made in’ label plays a significant role for luxury aficionados who hold higher expectations including a value added quotient to ‘luxury’ brands who produce their products in their respective country of origin – mainly France, Italy and the U.K. For categories other than apparel and accessories, production should be elsewhere in Western Europe.

In the article “Building a Luxury Brand Image in a Digital World” by David Dubois, INSEAD Assistant Professor of Marketing and Debbie Teo, INSEAD MBA, they quote the following:

Hermès has no desire to become ‘masstige’ (a mass producer of prestige goods) the company’s CEO Patrick Thomas stated in 2009. In essence, he asserted that his brand was not in a position to dilute its image and compromise on quality in the interest of short-term results. This is truly one of very few authentic “luxury” brands befitting the model and criteria in the sense of the word.

Privately held luxury brands are prone to view business with long-term vision and remain rigid with quality over quantity. Comparatively, their publicly traded counterparts go out of their way to please their shareholders which may dilute their “luxury” status for the sake of volume and short–term gains.

Good business decisions are not the domain of tactical “bean counters” — exploiting the luxury brands for all their worth. They may also come from strategic planning and overall financial leadership.

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Maestros of Ambiance: The Art of the Hotel & Food Establishment Experience — in visuals

by James D. Roumeliotis

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Exceeding the Hotel Guest Experience: Anticipating and Executing Desires Flawlessly

By James D. Roumeliotis with special contribution by Virginia Karaouza, MBA (tourism & hospitality professional)

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A place which wants to attract the most discerning souls, should be unique and embody a complete lifestyle concept which combines a relaxed, holistic approach amongst an elegant setting and decor with attention to detail. This includes, clean, updated and attractive guest rooms with no amenities spared. Pleasing food & beverage prepared and presented with pizzazz are complemented by soothing music which is also an integral part of the ambiance. The attractive, smiling and well-mannered staff is dressed stylishly. All of these elements combined will, undoubtedly, seduce the senses and generate good vibes along with positive memories created.

However, is all that adequate? Today, more than any other time in history, customers are the most sophisticated and increasingly demanding – whether they’re Boomers, GenXer’s or Millennials. The total customer experience in the high-end hospitality domain requires superlative attention to customer care from the moment a booking is made, during the guest’s stay and beyond. The use of an integrated approach is essential across various touch points with the purpose of engaging and retaining customers.

The sanctuary away from home

Astute guests consider hotels they choose to be an upgrade away from home in terms of comfort and services offered. One area of particular attention in the last few years has been the bed. It has been the focus of tremendous improvement. According to J. D. Power & Associates, a comfortable bed and pillow choices are must-haves ‒ especially for business travelers. In fact, 93% of luxury hotels offer a selection of pillows.

A high-end resort developer and operator, Kerzner International, renowned for its opulent One & Only luxury resorts brand has “Blow away the customer” as it core mantra. The company walks the talk by impressing its guests through grandiose entrances, facilities, overall ambiance and luxury amenities – then making absolutely certain that they are pampered throughout their stay. It’s all an integrated, well-orchestrated and flattering process. Nothing is left to chance although it does take a coordinated team effort to make it all happen flawlessly.

The wealthy cherish their time and know what they want. Even time is a luxury and limited resource for them, thus saving time greatly trumps saving money. This is part of the reason service is crucial for them. They can be generally described as:

– Seek a higher and exacting standard with a minimum set of expectations;
– Fussy in nature;
– Often require customized solutions to mirror their lifestyle – whether a product or service;
– Take pleasure on getting extra attention from the brands they pursue;
– Prefer the uncommon to the mundane;
– Expect to be offered unique choices and experiences;
– Synonymous with a taste for luxury with pedigree and craftsmanship which they’re able and willing to pay;
– Aspire an aura of exclusivity;
– Crave an experience heightened by exceptional service along with a personal relationship;
– Seek products which are different and more sophisticated – whether it’s apparel, electronics, food or insurance;
– Want to feel in command of their purchase decision without any pressure.

Boutique hotels vs. corporate chains

“Boutique hotel” is a term to describe hotels which often contain luxury facilities of varying size in unique or intimate settings with full service accommodations. Sometimes known as “design hotels” or “lifestyle hotels”, boutique hotels began appearing in the 1980s in major cities across North America and Europe – mainly in the U.K. These hospitality properties are characteristically furnished in a themed, stylish and unique manner. Boutique hotels generally are known to have less than 100 rooms. Their limited capacity enables them to enhance the customer experience through personalized service, as well as to customize their property and operations. An intimate atmosphere is usually regarded as a vital part of a “boutique” hotel. This includes cozier premises, quality amenities; conceptual dining outlets that become destinations in their own right, and an environment whereby the hotel staff recognize what your needs and desires are, rather than just responding to what you ask.

Customer-service is 2 of 2

Taking the personal touch to a higher level

Superb customer experience isn’t merely offering the customer what he/she asks for but rather what the discriminating customer truly desires to receive. This is accomplished by constantly exceeding of expectations through the delivery of remarkable tailored customer service with a series of personal touches.  Premium and luxury hotel guests expect surprise and delight along with unusual positive experiences.

Forrester, an independent technology and market research company, defines customer experience as: How customers perceive their interactions with your company. As with brands, customer experience is not what management thinks it should be – it’s what the customer perceives it to be. Thus, it should be understood that, because experience is a customer’s perception, management doesn’t control the customer experience, but it can certainly influence it.

The challenge for hospitality organizations is to ensure that their personnel always provide at least the level of service that their guests want and expect every time, perfectly. The purpose of quality management in the hospitality industry is to ensure that customer service is consistent and flawless. Providing it is intertwined with the overspill of the needs and expectations of guests and therefore their enthusiasm (delighted guests). The element of quality of service offered by the hotel industry should be apparent, be recognized and understood by the guest, as absolutely essential element in all the stages and processes during the service delivery.

The organization’s strategy, personnel and systems are aligned to meet or exceed the guest’s expectations regarding the following aspects of the guest experience: service product, service setting and service delivery. These aspects are carefully woven together to give guests what they desire and expect, plus the wow element. It all starts with the guest. Evidently, you can’t have a guest experience without a guest to experience it. That’s the main point, without the guest to initiate it, the components such as the carefully designed service product, the detailed and inviting setting, the highly trained and motivated servers and the finest back of the house people and facilities are just an experience waiting to happen.

The evaluation of service quality is a complex process, and the guest side is primarily subjective criteria, because each person can have their own opinion. But what is it really imparts excellence in quality of service to guests and causes only positive emotions and reactions of customers when they experience an unforgettable experience?

There are four key elements that make up the quality of the generated service and identify the outstanding quality of service (Service Excellence) which are as follows:

  • The Guest
  • The service setting – environment
  • The service delivery system
  • The processes

When these four elements, coexist and perform maximally, then the chances, the qualitative result to delight the guests, are significantly increased.

The service, as a product of person to person or a series of interactions between the guest and the person delivering the service is transformed into experience for the guest. The positive or negative aspect of the experience depends on the strategy applied by each company and sets the service delivery system. The guests, the service procedures and physical data sited so as to form a quality experience for the customer service they receive. Employees, who are also the brand ambassadors, play a crucial role in the process of service delivery. They are trained specifically for this purpose and supported by the organization itself along with the organizational culture. Technology and information flows like internal and external communication.Artificial and natural elements of the service along with the human factor, in this case, define the guest experience.

The service dimensions consist of reliability, responsiveness, assurance, empathy which characterize an emotionally intelligent and spirited staff with tangible elements in the ensuing way:

  • Reliability reflects the service provider’s ability to perform service dependably and accurately.
  • Responsiveness is a strong indicator in assisting guests and providing prompt service.
  • Reassurance reflects the courtesy and knowledge of employees and their ability to inspire trust and confidence.
  • Empathy involves the caring individualized attention the brand provides its guests.
  • Tangible elements include the facilities, amenities and ambiance felt by the guest directly or indirectly.

A company’s reputation for excellence in the services sector can be developed and supported, as long as the firm has a strong organizational culture oriented in high quality service, customer focus throughout the organization, as well as a dynamic set of employees. They are conscientious and committed to act within the quality standards which the company has established.

For a hospitality organization to achieve high levels of customer service and maintain constant satisfaction, it should develop and implement a structured service strategy, which covers all necessary actions on what measures and actions will be taken to:

  • Create a customer-centric culture.
  • Develop and install appropriate infrastructure service delivery system.
  • Identify the necessary procedures to recognize and meet the needs and expectations of guests.
  • Refine and encourage staff to speak with the right attitudes, skills and behaviors to internal and external environment of the company and towards the guests.
  • Measure – evaluate the degree of guest satisfaction.
  • Continuously implement practices to improve internal operations and procedures relating to excellent guest service.

An experience is created when a company uses the services and goods, in such a way as to create a memorable event and to stimulate the emotional world of the guests.The more intense is the intensity of emotion, the more strongly imprinted in memory and then only is it created as a memorable experience.

Guest experience is an integral part of service excellence and absolute customer satisfaction, all of which are subject to evaluation and performance measurement of an organization. With modern techniques and methods identified and assessed the degree of customer satisfaction and the recorded positive or negative experience. The collection of information, both during the service and the configuration of the customer experience provides useful information and enables the company to rectify and remedy any failure or deviation from the quality standards prescribed.

Customer service centric hospitality businesses train staff to utilize the so calledsixth sense:” It’s the innate ability to perceive what is not seen or immediately apparent. That perception will undoubtedly offer hotels, as well as other customer driven businesses, to delight their customers. According to an article authored by Mike Metcalfe, founder of Hoteliyo, a resource and blog for hotel professionals, he suggests to define your hotel service culture. Start by creating the ‘Guest Journey’. Map out every interaction or ‘touch point’ guests will experience as the following image depicts.

Hotel guest touch points according to Mike Metcalfe of Hoteliyo

Hotel guest touch points according to Mike Metcalfe of Hoteliyo

At Ritz-Carlton hotels, employees with direct contact with guests, such as the bellmen, are authorized to spend as much as $3000 to help solve a customer’s problem. At some other luxury hotels a wake-up call from the employee is not a typical, “This is your wake-up call ‒ wish you a great day”, but it also includes an offer to send up a complementary cup of coffee to get the guest’s day started.

At a Four Seasons Boston hotel video, an employee describes with pride and exhilaration how she went out of her way to personally get a guest’s luggage to the airport at the nick of time. The luggage was locked in the trunk of the customer’s rental car parked at the hotel and had lost his keys. Meantime, he had to rush to the airport without them so as not to miss his international flight.

Utilizing IT and social media to enhance the personal touch

Nowadays, luxury hotels should not neglect utilizing the benefits of IT and the internet to keep a two-way flow of continuous communication with its prospective, as well as existing clientele. This includes a fully integrated CRM system which connects sales, marketing and the administration including reservations, monitoring and respond­ing to review sites and reaching out to social networking sites. Customer preferences are also kept on record to keep in consideration and deliver upon during the guest’s future stays.

Hotel IT Image

Digital think tank L2 reported 78% of the affluent participate in social networking sites, with more than half using social media to connect with a brand, while 65% of wealthy consumers believe that brands that have no such presence are considered out of touch.

Luxury hotel chain Four Seasons, only a couple of years ago, unveiled a new website that reportedly cost a whopping $18 million to develop. It uses a holistic digital media strategy to enhance the total online experience and give a visual taste of what can be anticipated at their properties. Extensive research around digital consumption of luxury consumers, both in the travel sector and across other categories, was conducted for the development of the new website. The result of the investment is a fancy, colorful website, with a new booking process, social media integration and personal profile technology that allows users to set preferences and create a more targeted online experience. It is also optimized for mobile, which provides access to a reduced size version of the site, and includes videos, room rates and booking capabilities. In addition, locations and experiences are showcased through photo-rich, informative property and destination pages.

Upscale hotels, particularly, must offer WiFi access throughout the property at no charge. This is becoming part of the standard package that guests expect and demand. The cost, reliability and performance of WiFi in hotels worldwide has been a subject of frequent contention amongst hotel patrons.

The most notable high-tech innovation since a few years ago has been the mobile revolution. From the tablet with the iPad to the smartphone before it, they have become ubiquitous to everyday life. According to the Luxury Institute, one-third of wealthy consumers own a tablet or e-Reader such as the Kindle or Sony.

OneandOnly Resort Life 3 of 3

The takeaway

Any organization obsessed with customer service and the total customer experience, let alone the hospitality domain, should forgo routine and avoid unpleasant surprises. Complacency is a comfort zone which yields marginal performance. It can cause deficiencies, stifle growth and progress. This syndrome should be replaced with drive and consistent improvement. The culture of the organization, along with its structure, play a major role with the challenges it faces and how it deals with them.

As in every service sector, with an upscale hotel, every guest contact point should offer a unique and pleasant experience. Hotel brands need to use an integrated approach across their various touch points to engage their customers – commencing from the ease of their online (website) procedure or phone reservations center, during the guest’s stay, at check-out and beyond.

Placing emphasis on employee attitude/personality, empowerment, constant training, offering effortless accessibility for clients, flexibility when solving issues and presentations with style, as well as finesse. Each and every customer should be treated with personal care – a sign of individuality;

Sufficient resources and proper procedures should be implemented in hiring and training individuals with the right attitude over skills. The organization’s culture ought to support and inspire its staff to impressive achievement. An environment of mutual trust between leaders, employees, and customers should be created, along with proper rewards and incentives. This is what it takes for a human and personalized touch that retains its brand promise.

The best managed organizations have one factor in common: They are constant achievers, exude managerial excellence and possess a well-targeted CRM. The payoff will be a higher level of repeat business, referrals and profitability. Their financial performance is reflected in those results.

Ultimately, everyone in a service organization should live and breathe the brand.

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Empirical fact references:

–       Robert C. Ford, Michael C. Sturman, Cherrill P. Heaton (2011) Managing Quality Service in Hospitality.

–       Parasuraman, A., Zeithaml, V., and Berry, L. (1994a). Alternative scales for measuring service quality: A comparative assessment based on psychometric and diagnostic criteria. Journal of Retailing, 70 (3), 201-230.

–       Armstrong (2009). Armstrong’s Handbook of Management and Leadership. A guide to managing for results.

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The Post-Sale Customer Service Conundrum: Lip Service or Genuine Care?

By James D. Roumeliotis

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Customer service - white gloves and tray

Delirious, confused and frustrated are merely three terms which best describe what clients typically experience when dealing with many customer support representatives. Excellent customer service is a crucial component of your business image and philosophy. Regardless of how good your products and prices are, if you can’t offer a positive experience for your customers, they will likely not return. Moreover, you can be certain they will spread negative word-of-mouth. With social media so prevalent, a brand’s reputation can eventually take a nose dive. Today, customers are more demanding than ever. They want to know their issues are genuinely acknowledged and demand timely results. Simply apologizing to them does not suffice.

Do head honchos get it?

Much is touted by companies about customer satisfaction but surprisingly only a few actually deliver on their promises. Prominent brands are not immune either. At the outset, it appears that many lack a vital customer relations policy. Inadequate staff training amongst other factors further aggravates the problem.  Picking up the telephone and calling certain companies, for example, can sometimes lead to an exasperating experience. People love to hate the phone tree experience where you have to go through a maze of menus until you eventually get to speak to a human – assuming you’re lucky. It shouldn’t have to be that way.

The executives who are is in charge of finance and operations respectively (consider the CFO and COO) are mainly focusing on costs and productivity even to the detriment of the average customer. Consequently, they will measure the calls answered per minute – regardless of the outcome. In contrast, a customer focused executive will reward those who take their time to listen, engage and solve customer issues.

Deliberate bad customer experience

Sadly, some brands have a built-in mechanism to test their systems with some clients in the hopes they will give in which in the short term will not entail refunds or product returns which can hurt bottom lines. However, this approach is quite short sighted with long term negative consequences. Those companies use their seemingly discounted prices to lure customers but their real business model seems to be in tricking customers with inaccurate payment information and then charging extra for any delayed payment amongst other inconveniences and unpleasant surprises along the way. Many gym memberships and website hosting service organizations are notorious for such trickery. Their hope is that through a lack of awareness, or constant frustration an average customer will simply cave in. This ultimately backfires with constant negative consumer publicity and an unusually excessive business turnover. Most modern consumers are too sophisticated to relinquish their rights to fair treatment. Companies may ignore this syndrome claiming it’s a ‘numbers game’, as well as a cost of doing business. Though, in the process, they also corrupt their front line staff who have to address an abnormal rate of legitimate grievances.

Marketing maven and best-selling author, Seth Godin rationalizes it this way:

Unfortunately, just about all big customer service organizations do this precisely backward. They don’t escalate to a supervisor or roll out the kindness carpet until after someone has gone to Defcon 4. They decide that it’s too expensive to be flexible, to listen or to treat people fairly, and they wait until the costs to both sides are really high, and then they give an empowered person a chance to solve the problem. There’s huge waste here, as the problem costs more to solve at this point, and the unseen challenge is that they’ve established a cycle in which umbrage is the rewarded behavior.”

The customer centric organization: solving issues before they occur

Going above and beyond customer expectations is focusing on customer centricity. It begins by developing, implementing and continuously delivering a total positive customer experience at every touch point and beyond. The costs and benefits of this practice are equally beneficial for the customers and the business. A University of Michigan study revealed that companies which received high scores in the American Customer Satisfaction Index (ASCI) consistently outperform the S&P 500. Those companies include Walt Disney and Amazon, amongst others. Those are most certainly organizations that focus on quality over quantity and measure what truly make them remarkable.

The after sales service department should be designed with an efficient infrastructure in place so as to make the entire experience an effortless task for both the customers and employees who are assigned with the responsibility. It should be easy for the client to reach a customer service agent and/or online agent to chat with. Moreover, the client should not have to be placed on hold for more than 5 minutes. Whenever the wait is more than two minutes, there should be an option to offer a simple way to be called back. The organization’s mindset should be to constantly think of ways to release tensions and give solutions to the client promptly.

Since many of the inbound calls normally concern frequently asked questions, why not have them prominently displayed on the website and/or printed on the product insert. Having them recorded as an option on your phone line, in a clear English voice (and second or even third most popular language relevant to the region’s business demographics), can eliminate unnecessary calls and waiting times with a live person.

Staff tasked with customer service should:

  • Possess a positive attitude under duress;
  • Be initially trained and occasionally re-trained,
  • Treated with respect, and
  • Be empowered to make timely customer satisfaction decisions on their own.

There is no better example to illustrate this than online shoe retailer Zappos.

What customers get to see displayed prominently on the web site:
– 24/7 1-800 number on every page
– Free shipping
– Free return shipping
– 365-day return policy

What customers will experience:
– Fast, accurate fulfillment
– Most customers are “surprise”-upgraded to overnight shipping
– Creating a “WOW” factor
– Friendly, helpful “above and beyond” customer service
– Occasionally direct customers to competitors’ web sites

What’s done behind the scenes?
– No call times, no sales-based performance goals for representatives
– The telephone is considered for them one of the best branding devices available.
– Run warehouse 24/7. Inventory all products (no drop-shipping).
– Five weeks of culture, core values, customer service, and warehouse training for everyone in Las Vegas office.
– A Culture Book
– Interviews & performance reviews are 50% based on core values and culture fit.

Customer Experience equals customer abbreviation

Putting it all together

Within every organization, decision making drives performance. Every day, employees at work make decisions that impact performance. These decisions, at every level of the organization, including customer service policies and tactics, define the corporate culture and drive performance.

It’s important to keep in consideration that measuring customer satisfaction is a way to assess its effectiveness, and refine what’s necessary along the way. This is performed by evaluating communication at your help desk or and/or call centers, as well as conducting surveys or sending out brief questionnaires soon after a call has been consummated. How satisfied were your customers with the level of service they received and will they do business with you again in addition to recommending you to others?

Customers are not concerned about your operational problems, your costs and margins, your lead times, your staff shortages, and much more. They are only interested in themselves and the benefits they may be able to obtain from your business instead of the one down the street, or the other ones found over the internet.

Thus, a priority need for every (selfish) customer or prospective buyer is timely and personal service.

Bill Marriot said it succinctly with “Take good care of your employees and they’ll take good care of the customer—and the customer will come back.”

This management philosophy isn’t common but it is shared by both Southwest and Costco. When using either company you can experience it as employees are generally in a great mood, and in turn, happy to help.

Customer centricity should be everyone’s job in an organization. It’s to be embedded in the internal culture. It begins with the top leadership and permeates through the entire organization. Implementation of new and refined strategies and tactics equate to daily and long-term success in building profitable customer relationships. Been helpful with your customers, even if there’s no immediate profit in it, is simply a good business practice with pragmatic thinking for the long-haul.

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The Ultra Luxury Purveyors: Lessons from brands catering to the richest 1 percent

by James D. Roumeliotis

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Luxury Couple - Private Jet

A few years ago, I had the privilege of working on-board the 147m/482 ft Saudi Royal family yacht the “Prince Abdul Aziz.” It was a first-hand experience with the wealthy 1% and was quite an eye-opener.

A typical day consisted of shopping at Gucci, LV, Hermes and Bulgari when we made port regardless of location in the Western Mediterranean region. The 40k euro daily average shopping splurge prompted the support staff to shop for large suitcases or trunks to be used as temporary storage. Not surprisingly, given the situation among visiting VIPs and royalty, this was the norm.

Given my professional métier in luxury brand management, I realized that this target audience belonged to a category distinct from any other, which I have labelled the One Percenters.

The frequent conspicuous consumption was considered a normal occurrence for the Royalty and its VIP guests as were the elaborate prepared meals devoured that would make the mainstream cringe.

Who on earth are the one percenters?

Along with Sheikhs and Princes, HNWI (High Net Worth Individuals) are considered, by luxury marketers, as the elite segment of the market. According to the Capgemini – RBC Wealth Management World’s Wealth Report 2012, it defines HNWIs as those who possess at least US$1 million in financial assets. On the other hand, there are the ultra-HNWIs or UHNWI as those who hold at least US$30 million in financial assets, with both excluding collectibles, consumables, consumer durables and primary residences. The report states that following a robust growth of 8.3% in 2010, the global population of HNWIs grew marginally by 0.8% to 11.0 million in 2011. Most of the growth can be attributed to HNWIs in the US$1 million to US $5 million wealth band that represent 90% of the global HNWI population. The top three countries, U.S, Japan and Germany, retained 53.3% of the total share of HNWIs

Clearly, One Percenters have different expectations and experiences than the rest of us. Here are just a few of this target audience’s distinguishing traits:

–       They are better educated;

–       Have traveled more (and continue to do so);

–       Own one or more successful business and/or inherited their wealth;

–       Possess investments mainly in real estate, stocks and bonds;

–       Are avid connoisseurs of the fine arts/cultural events and vintage/wines;

–       Own top quality merchandise: elaborate homes, exotic cars, bespoke attire, as well as seek services which cater to their discernment;

–       Have explored plenty more in their lives due to their significant disposable income/wealth.

In a recent American Affluence Research Center report, its founder and researcher, Ron Kurtz recommends that: “Luxury brands and luxury marketers should be focused on the wealthiest one percent because they are the least likely to be cutting back (during tough economic times) and are the most knowledgeable about the price points and brands that are true high-end luxury.”

What do the HNWIs and UHNWIs seek in their lifestyle?

According to the white paper, Strategies for Effectively Marketing to High Net Worth Consumers”, written by Richard Becker (August 2008), High Net Worth Individuals enjoy Golf, tennis and physical fitness ‒ endeavors typically associated with exclusive ‘members only’ clubs.

HNWIs/UHNWIs cherish their time and know what they want. Even time is a luxury and limited resource for them, thus saving time greatly trumps saving money. This is part of the reason service is crucial for them. They can be generally described as:

– Seek a higher and exacting standard with a minimum set of expectations;
– Fussy in nature;
– Often require customized solutions to mirror their lifestyle – whether a product or service;
– Take pleasure on getting extra attention from the brands they pursue;

– Prefer the uncommon to the mundane;
– Expect to be offered unique choices and experiences;
– Synonymous with a taste for luxury with pedigree and craftsmanship which they’re able and willing to pay;
– Aspire an aura of exclusivity;
– Crave an experience heightened by exceptional service along with a personal relationship;
– Seek products which are different and more sophisticated – whether it’s apparel, electronics, food or insurance;
– Want to feel in command of their purchase decision without any pressure;

– Expect discretion and confidentiality – most notably from service providers such as private wealth institutions and concierge services amongst others.

Likewise, what they purchase is a visual extension of their individuality and lifestyle. A well-crafted product, for example, reflects an individual call to beauty.

The preeminent luxury brands remain top of mind with the HNWI/UHNWI

When the premium plumbing brand, The Kohler Company, introduced the ultimate toilet fit for the well-heeled, it developed a contemporary industrial design that would make Apple glow with envy. Numi, as the model was baptized, includes technology and engineering that is unconventional with most toilets as we know them. Its features include, amongst others, ambient lighting, a bidet, foot warmers, a seat warmer, music, lighting, and hands-free flushing – which are all controlled through a remote which, with a press of a button, also lifts and lowers the lid. All this can be had for a mere $6500.

Luxury purveyors who aspire to cater to the top tier of spenders should have a mission, vision and a sound implementation strategy to reach this elite demographic target ‒ short of simultaneously pursuing the aspirational consumers who are prone to cutting back when the economy takes a dive. This latter group of consumers dilutes the cachet of the brand and can turn out less profitable in the long run. Moreover, the HNWI/UHNWI frown upon offerings which are accessible to the mainstream as they desire status and exclusivity.

Products and services should be unique, well designed and packaged, finely crafted ‒ and executed with refinement for the elite. Those are ways to entice the interest of, and ultimately retain, the ultra-wealthy. Products and services should never appear as ordinary yet absolutely personal.

In the luxury sector, traditionally there hasn’t been any shortage of customization for the very well heeled. Exclusive and bespoke travel companies provide tailor made adventures and excursions, whereas, the ultra-luxury and exotic automobile sectors such as Rolls Royce and Ferrari respectively offer a wide array of customization options. Each vehicle coming out of the studio will be completely unique and guided by a personal designer at the manufacturers. This is how ‘the total customer experience’ materializes.

Some of the most prominent companies that cater to the 1% include:

LVMH Moët Hennessy ‒ Louis Vuitton S.A (French conglomerate that owns a legion of luxury brands including Louis Vuitton, Marc Jacobs, Fendi, TAG Heuer, and Dior cosmetics among many others and in various categories), Chanel, Hermes, PPR/Kering (owns controlling shares of Gucci and Yves Saint Laurent, among others), Richemont (owns the prestigious Alfred Dunhill, Cartier and Montblanc brands along with many others), Rolls Royce Motors, Bentley Motors, Bugatti Motors, Rolex, Patek Philippe, Goldman Sachs, Gulfstream, Sotheby’s, Bulgari, Tiffany & Co., and Harry Winston to name a few.

Luxury service brands follow a similar pattern. Consider American Express − most notably for its “by invitation only” Black/Centurion card. For hotels, worthwhile mentions are the Hotel Plaza Athenée, the Four Seasons (including its private jet tours), the Ritz Carlton, and boutique hotels Hotel du Cap and Hotel de Crillon to name a few prominent ones. They splurge and provide the perfect luxury experience with outstanding service, exclusivity, and pedigree.

How the luxury purveyors reach, cater and retain the 1%

Studies over the years have shown that the HNWIs/UHNWIs travel frequently and usually do so on a private jet. It’s also a fact that emerging markets from commodity rich countries such as Brazil, Russia, India and China, have a tremendous amount of new ultra wealthy citizens that can’t be ignored.

Reaching them is not easy. However, following are several approaches the prestigious luxury brands are utilizing.

–       Target them in their gathering places in major cities where most UHNWIs reside – London is such a prominent location;

–       Sponsor and/or advertise where the HNWI/UHNWI meet and play such as prestigious golf clubs, polo events etc. Rolex supports prestigious sporting and cultural events all over the world including tennis, the arts, golf tournaments and yachting.

–       Advertise in private jet terminals worldwide called Fixed Base Operators (FBOs) ‒ facilities that handle non-scheduled flights. One such opportunity is in Davos (Switzerland), towards the end of January, where the World Economic Forum is held. There are also magazines, such as “Privat Air” which are published specifically for private jet travelers. In 2012, there were over six million private jet flights. It is, undoubtedly, a targeted audience where one reaches the ultra-wealthy family together – which may be discussing a product or service you may be offering. Swiss watchmaker Audemars Piguet had several helipads with their logo located on Manhattan’s 34th Street.  The helipads included paintings of their watches which functioned as landing markers.

–       Meet and woo its discerning target customers at high profile industry shows and events. Burgess Yachts, for example, participates at the annual Super Yacht Show in Monaco which draws the well-heeled shopping for a multi-million dollar yacht.

–       Hone in cities where the ultra-wealthy normally visit for the finest luxury shopping experiences – mainly Milan, Paris and London with their shops on prestigious avenues;

–       Are promoters of good taste and the arts which is what the super-rich equally enjoy;

–       Make an effort to approach/communicate with influential members of entourages such as drivers, personal assistants, pilots and bodyguards;

–       Advertise and contribute content in prestigious lifestyle magazines which cater to the ultra-affluent including Amex’s ‘Departures’ magazine, ‘Worth’, ‘Elite Traveler’, ‘Monocle’ and ‘Burgess’ amongst others. (To request a complete list, kindly click here);

–       It goes without saying that successful brands have an online presence/visibility including a clean looking and engaging website, along with a carefully targeted social media existence to build long term online awareness, loyalty and value for the brand.

Along with what the prestigious brands are doing to attract the top spenders, consider creating an exclusive/”members only” online club/site similar to Samsung’s Bluehouse Club. Moreover, if you’re offering products, boasting about artistic development by engaging with them and encouraging a visit to your atelier to witness your product being crafted. A video should also be considered for viewing online.

Research where the wealthy neighborhoods are worldwide by using demographic data.  This information reveals everything from median income and age, educational levels and consumption statistics.  Demographic data also helps improve target marketing and advertising.

Sell a distinct lifestyle which is what discerning clients look for. Be in the forefront of creativity and have all your staff, regardless of department/responsibility, as your brand ambassadors.

Occasionally, organize exclusive “by invitation” events as a patron appreciation gesture. Being invited to an exclusive event makes one feel notable. For example, Italian sports automaker Maserati invited a select number of brand loyalists to a new experience in Europe that gave them the opportunity to sail on-board the 70 ft./21,3 m Maserati sailboat. In addition, they drove models in its current range including the new Maserati Gran Turismo Sport model.

Create/publish an upscale lifestyle magazine, every other month or quarter, which should include noteworthy information on the brand and the arts, as well as the causes it supports – in an environmentally friendly print format, along with a digital version. The Bentley motors magazine is a good case in point. The layout, choice of articles/stories and advertisers reflect the tastes of its existing and potential customers.

Helipad Ads - Luxury watches

Removing some of the guilt of ostentatiousness

Corporate Social Responsibility or CSR, along with sustainability issues, is a trend increasingly practiced in the luxury domain to send a message to their audience that they it cares. This is communicated through sponsorships, advertising, public relations, their websites and other media sources. The message conveyed is to enjoy guilt-free ostentatious purchases where part of the purchase price is donated to a worthwhile cause. Louis Vuitton uses celebrities in its advertising campaigns whose fee goes to charity.

Any business which is willing to get involved in social causes to impress its target market should make a genuine effort genuine, as sophisticated consumers can tell when it doesn’t come across as a genuine effort

Putting it all into perspective

In the United States, the top 1% possess 40% of the wealth; it owns half of all the stocks, bonds and mutual funds.

Fickle and discriminating, these customers’ purchasing attitudes are based on personal beliefs and taste for finer things in life along with discretion. They are quite selective, know what they want and aspire to be catered to effortlessly. They seek the total customer experience along with pampering, personalized service which can include fashion consultations and exotic journeys. Best of all, they are willing to pay top money for the products and services they want.

An offline strategy requires an equal online presence. This is accomplished by placing stunning imagery, video, engaging content and constant refinements along with savvy Internet marketing to connect the brand with luxury social channels. It’s connecting with its like-minded audience.

Think brand positioning and focus on, as well as cater solely to, your core market rather than be all things to all people. Stay out of the bottom end and aspirational markets and instead, aim at the top end markets.

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Brand Experience, Not Product Branding: Cutting Through the Clutter

by James D. Roumeliotis

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Products in the same class-categories struggle to differentiate themselves. Consumers often take brands for granted. Purchases are not so much conscious brand selection as choice by default. The two following examples highlight this. Going out for coffee in North America usually dictates a visit to Starbucks. When sparkling water is ordered at a restaurant, Perrier appears almost by magic.

The age of the internet has made copying competitors’ products, marketing strategies, and overall business practices to name a few. It’s not enough to merely compete at a product and pricing level which doesn’t take long to be outdone. Anyone can lower prices. What begs the question is where you draw the line before your profit margins are eroded to the point of no return and many ramifications for a business. Savvy marketers look beyond pricing and product features. Instead, they search for sustained ways to market their brand rather than their product.

Brand Not Logo 

“Branding” redefined for the new era

 To begin with, a “Brand” is a promise of something that will be delivered by a business. This promise comes in a form of quality, an experience and a certain expectation in the mind of the consumer. It includes the Unique Selling Proposition (USP). Marketing, on the other hand, is about spreading compelling messages to your target audience while branding is a combination of words and action. Marketing is extroverted and communicates quickly, while branding is introverted and a slow process if it’s to produce any real impact. Effective marketing activities are vital in developing a brand. When combined successfully, branding and marketing create and promote value, trust, loyalty and confidence in a company’s image, products and services.

When consumers are delighted by a particular brand experience, they begin to bond emotionally with the brand. They become brand loyalists and advocates – buying the brand more often and recommending it to others. This behavior serves to build the brand’s reputation.

A branding strategy should consist of:

  • Brand Positioning – Position is a descriptive sentence, slogan or image the brand is known for in the mind of the consumer and which the company delivers on it consistently. This is what sets the product or service apart from competitors.
  • Brand Identity – This is every visual expression of the brand, whether in print, television, digital or the iconic (Pullman) brown color identifying the trucks and delivery staff of the UPS courier company.
  • Brand Experience – Generally speaking, brands that are designed for a lifestyle should have a much higher emotional value to consumers than ones based on features like cost or benefits alone.
  • Storytelling – Brands build relationships by the stories they tell. Stories add personality to products which customers can better relate to and feel affinity with. Luxury brands boast their pedigree.
  • Engaging with your target audience – this is conducted through social media and asking for feedback. Simply put, engaged customers help you build your business.

Senses in Branding Strategy

The holistic selling proposition

Consumers today are more brand conscience, yet there are companies which continue to spend money advertising and selling product rather than brand. They place emphasis on price and quality as differentiators despite these two being overused by many copycats. Successful brands take a holistic approach to selling by exploiting the 5 senses which now constitute the brand. This is accomplished by what I regard as “ambiance marketing” and “sensory/sensorial branding”, through a captivating designed setting, yet alluring. This adds character and invites clients to truly feel the brand experience.

To put the aforementioned into perspective, consider the following:

  • Visual – lighting, décor, colors, layout…you can get a real sense of movement using these elements.
  • Auditory – music, effects, volume, vibrations…you set the tone and the energy of the room with your sonic selections.
  • Tactile textures, comfort, climate…this is all about how your guests interact with the environment.  This is a big thing to consider when you are designing the layout.
  • Olfactory fragrance, emotion, ambiance…this sense is under-rated and powerful. Of all our senses, the sense of smell is most closely linked to emotion and memory. You can use something as simple as burning incense or candles to something far more complex like computer controlled scent machines to enhance your environment. This could just be the extra touch needed to set the mood.
  • Gustative – with food establishments, the challenge is in finding the perfect balance between sour, salty, sweet, and bitter during menu designs and beverage selections.  The presentation also makes an impact on the overall image.

Customer Experience equals customer abbreviation

Developing the customer relationship through customer experiences

The Total Customer Experience is the sum total of the interactions that a customer has with a company’s products, people, and processes. It goes from the moment when customers see an ad to the moment when they accept delivery of a product and beyond.

According to Bain & Company, a leading management consultancy firm, out of 362 leading companies surveyed, 80% believe they deliver a superior customer experience, but only 8% of their customers agree.

The experiences customers go through with your business determine the ultimate perception of your brand and image. Customer experiences also spread the word (offline/online) to others (friends, relatives etc.) about your brand/image. That said, each customer contact (“touch points”) should be handled with the utmost care to ensure that the total brand experience a person has is constant. This requires proper training and occasionally evaluating employee performance. Moreover, improvements may be necessary with systems, technology, methods, services, products and even physical premises. Complacency should be replaced with continuous improvement.

Creating a lifestyle brand through emotional attachment

Brand loyalty is about building an emotional, and in some cases, irrational, attachment in a product. The most ideal example is when thousands of people line-up, regardless of weather conditions, to get their hands on the latest iPhone or iPad. This happens because Apple has built an emotional attachment to their products by creating a lifestyle choice rather than a product purchase.

It’s about how it makes you feel. Same goes for baby boomers, whether accountants or attorneys or business executives who purchase a Harley Davidson motorcycle and ride them for about four or five hours every Sunday afternoon. The bike makes them feel like a rebel – sort of an escape.

A brand that is designed for a lifestyle should have a much higher emotional value to consumers than one based on features like cost or benefits alone. The goal of a lifestyle brand is to become a way that people can utilize it to relate to one another. Those brands are an attempt to sell an identity, or an image, rather than a product and what it actually does.

Lifestyle brands have gained an increased share of the luxury market such as BMW, Armani, W Hotels, Louis Vuitton and Rolex ‒ just to name a few. These have given way to consumers to buy products that they associate with a “luxurious life.” They are essentially a status symbol. Abercrombie & Fitch has created a lifestyle based on a preppy, young elite lifestyle. Their retail outlets reflect this way of life through their luxurious store ambiance, attractive associates and images portraying young people living the Abercrombie & Fitch way.

 Apple Standsout amongst the others

B2B branding differentiation

Consumers are attracted to brands’ nonsensical benefits such as status, affinity, self-comfort and prestige, whereas, Business-to-Business (B2B) customers make their purchase decisions based on practical rationale including pricing, product performance and specifications, Moreover, brand loyalty in the B2B sector is higher than in consumer goods markets because companies in the commercial and industrial segments seek satisfying and long term relationships since jumping from supplier to supplier can cause havoc and inconsistencies with product quality control. Consequently, developing brand loyalty among enterprise customers can capture a larger share can increase profit margins while protecting them against lower-priced competitors.

The final take

The key to success is to market your brand, not your product. Contrary to popular belief, a brand is not a logo, label or product but rather a relationship with your customers. Branding positively adds value to your company including brand equity. This is considered intangible brand value.

A company can define itself as a lifestyle brand when its products promote a more than a product with key benefits and attributes. Note however that lifestyle branding is more than just promoting “a way of life.” It is a product or service that provides consumers with an emotional attachment to the lifestyle of the brand.

One way to overcome the ‘price only’ differentiation, which erodes profits and does not generate loyalty, is for a company to consider building a lifelong relationship with each customer. To do so, requires that each customer enjoys a positive and hassle-free transaction with each touch point. The goal is also to reduce or eliminate customer problems altogether, but that begins prior to and during the first contact with the customer. All problems should be documented, reviewed and corrected without much delay. Hiring the right people is vital, so is training them properly, as well as empowering them to deliver a remarkable customer experience.

When promoting brands, consider that earned media trumps paid media and enhances the brand image. With adverts, consumers don’t care what marketers say. According to the 2011 Nielsen Group report, “False” is the term 89% of consumers closely associated with advertising campaigns.

Whether a product or service ‒ is a luxury brand or falls into another category, it is how you stand out from the crowd that distinguishes you. Know your target audience, get inside their heads and understand how they think and feel. What are their fears, emotions and anxieties? Once you’ve understood this quite well, you then manage the brand consistently.

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Mass Customization & Personalization: The Pinnacle of Differentiation and Brand Loyalty

by James D. Roumeliotis

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There was a time when customized products and personalized services were catered exclusively for the discerning and well heeled.

London’s Savile Row stands as a testament to personalized luxury.   In a world full of luxury dumbed down and mainstream, there has been an up-shift by certain manufacturers trying to offer tailored ranges and services to a wider audience.

This development is technically referred to as “mass customization” and “mass personalization”.  So why the shift?

Simply put, clients are demanding more and don’t share the same sense of brand loyalty as previous generations. Marketing strategists believe that focus must be on generating a community tied to customer satisfaction.  I won’t call this CRM on steroids but the analogy could hold.

With ever increased competition, brands must show genuine benefit to hold the client’s attention as well as affection. The trend is quite sweeping once you start to examine the determinants. Look at fashion apparel, beauty care products, shoes, bicycles, laptops, and even smart phones. All claim they are perfect for customization.

Mass Customization vs. Mass Personalization

According to Wikipedia, the definition of the term “mass customization” in marketing, manufacturing, call centers and management, is the use of flexible computer-aided manufacturing systems to produce custom output.

These systems combine the low unit cost of mass production processes with the flexibility of individual customization.

“Mass personalization” on the other hand, is the custom tailoring by a company in accordance with its end users tastes and preferences.

The main difference between the two concepts is the ability for a company to give its customers an opportunity to create and choose product specifications. There are however limits.

The Financial Times lists “personalized production” among six other factors driving the future of manufacturing – namely network manufacturing, technological innovation, industrial democracy, boutique manufacturing, cluster dynamics, and environmental imperatives.

A case in point: Pomarfin is a small family owned Finnish footwear company. With strong competition from Asian manufacturers, the firm decided to change its strategy.  It carefully looked at the adaptation to the mass customization paradigm, alongside a revision of its business model. Its choices were to either outsource the manufacturing of its shoes to China and simply become an ubiquitous brand, or differentiate itself while keeping its production in Europe.  It chose the latter, by deciding to compete in mass customization, making made-to-measure shoes for discerning and affluent men.  Pomarfin then introduced the clever concept of installing and utilizing a foot scanner in retail stores, which sells its shoes. The client’s foot gets scanned and the image is then uploaded to a server and sent to the firm’s manufacturing plant.  The client then decides if he wants his exact fitting shoes shipped directly to his address of choice or picked up at the retailer.

Moreover, as an additional convenience, the customer can reorder custom shoes through Pomarfin’s website. To be fair and retain loyalty with its retailing partners, Pomarfin pays them a royalty for life for each new pair of shoes purchased by a customer sent its way.

Broad Marketing of Bespoke Products & Services

Clients have simply become more demanding. They expect more, and have no loyalty to brands that do not come up with the experience to match the product or service hype. This trend is both at the B2C and B2B level.

Everyone it seems is looking for the enviable win-win scenario.

It is natural to think that bespoke is the sole domain of the fashion industry whether shoes, suits, shirts or haute couture. These items with their stress on handmade carry heavy price tags and are geared to people with a high DPI.

You would be mistaken to believe that this is not possible for a mass market. For example, Dell computers was the first firm to offer customization to their entire range. In fact, designing your own computer needs with a consultant is the DNA of this organization. Dell understood that this type of differentiation would mark them apart from anyone else in the industry.

Other consumer goods operations quickly followed suit. For example, Adidas AG launched the miAdidas unit which offers custom sports shoes. Nestle delivered a market coup to the coffee industry with Nespresso, bringing single serve coffee into the home and office. Now you can serve different types of coffee within a group with no effort.

Individuality is a Sign of Personality: The Way Forward

The mass customization trend has been a rolling bandwagon. Understanding and harvesting this demand is easier said than done. Smart firms generally respond by building production facilities and systems with an increasing number of modifications in order to produce and deliver individualized units as per customer’s preference.

This certainly has its benefits and drawbacks:

Advantages
– Allows customers to create customized products
– Products deliver excellent value for money
– Makes comparative shopping difficult
– Shifts the focus from price to benefits
– Economies of scale/mass efficiency
– Manufacturer can justify charging a premium
– Easily differentiated against similar products
– Provides deeper form of customer engagement and data

Disadvantages:
– Increased overall complexity
– A significant initial investment + per unit cost of production
– Layover time – takes longer to manufacture
– No return policy on custom orders

Progress in manufacturing technology such as computer-aided manufacturing (CAM) and computer-aided design (CAD) have increased the flexibility, as well as the efficiency of the modern-day factory to achieve build-to-order products.

Source: Emerald Insight

Ordinary is for the Mainstream – Do Luxury Brands Have Your Number?

Traditionally, the wealthy have great purchasing power. In theory, they are sophisticated and unafraid to express their taste as trendsetters and style mavens. They can also be the hardest segment to market to effectively because they are spoiled for choice.

Yet billions are spent catering to the tastes of this ever growing segment. Take the Paris Fashion Week shows and you can see the parade, the fanfare, and the glitz. Everyone is here: the paparazzi, fashionistas, and even fashion bloggers. Is it any wonder? Everyone craves glamor and it’s big business.

If you are one of the Jet-Set, do you want to be just mainstream? Of course, you don’t. The luxury trade has got your number, no matter how idiosyncratic your taste or preferences. Need private banking where professionalism and discretion are key? You got it. Want to stay in a boutique hotel so exclusive that few even know it exists? It’s there for the taking.

The providers of these services use what I refer to as “Bespoke Marketing” along with “Sensorial Branding” to differentiate their message and total customer experience respectively. These branding exercises are narrow in scope and speak of privilege the way its understood among the cognoscenti.

It is typical for certain shoppers at Louis Vuitton on the Champs-Elysees in Paris to serve the right customers flutes of champagne while they try things on or discuss their luggage needs upstairs. It must be said that LV knows how to coddle their clients.  As I am sure you can appreciate, LV is not the only store in this town to offer VIP red carpet treatment. Most major luxury firms do likewise such as Cartier, Dior, and Chanel.

Need a personalized briefcase? Why not pop over to Hermes? They are awaiting your next visit. The world of Hermes personifies exclusivity. Open one of their in-house magazines, and a special universe is revealed. The key beyond outstanding products is the creation of something bordering on revelation. The store itself has become a stage set, and sales pros are the players who embody the firm’s DNA.

Bespoke is the middle name of this institution. Real luxury brands understand this concept like Stradivarius handcrafted violins.

Needless to say, the term “luxury” has been misused over the years. It is mysterious and elusive. In essence, it revolves around subjective criteria referred to as lifestyle.

Gary Harwood at HKLM, one of the founders and directors of a leading strategic branding and communication design consultancy, stated:

“A luxury brand is very expensive, exclusive and very rare – not meant for everyone. When it ceases to be these things, then it’s lost its exclusive cachet. Commoditizing luxury brands and making them more accessible to the middle market puts them at risk of becoming ordinary, common and less desirable. And the more available a brand is, the less luxurious it becomes.”

Perfume connoisseurs are taking their choices a notch above most as the top-end of the fragrance industry is a very personalized one. Consequently, niche perfumes for the discerning and well-to-do are growing rapidly. This sector is creating new trends in the beauty and fashion world through an artisan approach.  Customers visiting bespoke perfumery shops expect highly trained staff to advise on fragrances. A great “nose” knows different clients value different scents, and thus will prescribe like an old fashioned doctor, who used to make house calls. Chemistry and diet also play a role in developing your own signature perfume.

Quite sophisticated and personalized indeed. But then, isn’t this the true symbiotic meaning of luxury?

novero_victoria_gold_stripes

The Final Take

“Mass customization” and “mass personalization” (or “build-to-order marketing” and “one-to-one marketing”) in delivering either products or services when properly implemented, bring about across-the-board improvements in all dimensions of a business. This includes, price, responsiveness, quality, and a positive experience. Competitiveness and operational effectiveness of a company also improve.

However, mass customization also has a few drawbacks as it does come with a cost. Along with a substantial initial investment in manufacturing equipment upgrades, the primary challenge in pursuing mass customization stems from increased complexity in its operations. A higher level of product customization requires greater product variety, which, in turn, entails greater number of parts, processes, suppliers, retailers, and distribution channels. As a result, bigger challenges exist to manage all those aspects of the business from raw material procurement to production and eventually to distribution. In addition, an increase in product variety has the effect of introducing greater uncertainty in demand realizations, increase in manufacturing cycle times, as well as an increase in shipment lead times.

In the luxury sector, traditionally there hasn’t been any shortage of customization for the ultra-high-net-worth. Exclusive and bespoke travel companies provide tailor made adventures and excursions, whereas, the ultra luxury and exotic automobile sectors such as Rolls Royce and Ferrari respectively offer a wide array of customization options. Each vehicle coming out of the studio will be completely unique and guided by a personal designer at the manufacturers.

“Good things come to those who wait.” Or so the saying goes.

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