Luxury brands trade in more than One Trillion dollars a year. We’ve come across some small business owners in the Rio Grande Valley who don’t believe they can compete in this market. They have an excellent product, a passionate staff and a high level of service, yet they sell their product for so much less than the market dictates they could. We love to help clients like that because we know that it is possible to compete in the Luxury Brand market.
You may ask yourself what the Luxury Brand market is. You already know the answer to this even if you don’t realize. The names Lamborghini, Rolls Royce, Gucci, Prada, Versace, or Tiffany automatically conjure images of the very best, the most exclusive and high price. Competing in the Luxury Brand market is by no means easy, but it is possible and worth the effort for a driven small business owner.
The biggest advantage is the approach to make a business profitable. If your plan for success is to lower the price of your product to compete with everyone else in town, please don’t do it. It is a race to the bottom that if you win, the prize is a bankrupt business. A Luxury Brand company looks at the path to success differently. First, they commit themselves to produce the highest quality product they can make. Second, they promote it in a way that sends the message out that they are the best and are worth a higher price. Third, they deliver in all aspects and excede expectations.
So here are the principles that we help our clients develop when they decide to pursue their share of the Luxury Brand market.
1. Identify a Niche. Find out exactly who your customer is, what they expect and where they are. Most new business owners believe they know instinctively, but that is rarely the case. In order to find a niche a great deal of research is needed. It’s not an impossible task, but it’s crucial to achieve the desired results. Don’t worry, there is help. Government agencies such as the Small Business Administration and Chambers of Commerce often have seminars and publications that can help guide you. There is also companies like ours who can help you do it or do it for you. Remember that if you think everybody is your customer, nobody is your customer. When the Toyota Prius hit the market, they had found through research that men and women 30 to 55 years of age, who perceived themselves as concerned by the environment and had an income above the average would be likely to buy a vehicle that had no track record of performance. Though it was not promoted as a Luxury Brand, it illustrates the importance of knowing your niche.
2. Brand Position. Your brand’s position in the market must be very clear so that your customer can identify you easily. The way to achieve this is to differenciate yourself from the competition. Yes, you must study your competitors at depth. The easiest point of reference the public has about your product is how it stacks up against the competition. That’s why it’s important to know them and set yourself apart. This is clearly demostrated when you look at advertisements for cell phone networks. T-mobile claims to have the biggest coverage, they use promiantely their signature purple color against a white background. Verizon claims to have the fastest network and use a black background with a their distinctive red color. AT&T reminds you every time they can that they have been around since 1878 and their palette consists of white background with a light blue hue. These choices are not arbitrary. They take great care to know who their competitors are and to set themselves appart.
3.Symbolic Value. When it comes to Luxury Brand items, there is in essence, not much difference between the popular or generic versions. A hammer is a hammer and it’s used to drive nails regardless of the brand. Justifying the extra cost that a Luxury Brand item carries comes from its social standing. Jewelry brands such as Tiffany & Co, Bvlgari, Harry Winston and all the other powerhouses take great pains to place their products on celebrities who are alligned with their phylosophy and message as they walk down the red carpet. For the consumer who loves jewelry, this makes a huge difference. They are willing to pay for the message it would send out to their peers, family and community when they wear these items. You too, should take great care of cultiviting this symbolic value to your products or services.
Exclusivity. You’ve probably heard it before. People want what they can’t have. It is human nature. Exclusivity is created by scarcity. The clearest example is how people are willing to wait in line for hours and sometimes days to purchase tickets for an event. That’s why phrases like “limited edition”, “reserve” or “for a limited time” are so impactful in the mind of the consumer. It is rumored by those in the know that Louis Vuitton will put a purse model for only an hour at random times to create scarcity. You don’t have to resort to dishonest practices but think of ways your product can be scarce. If the dress you make and sell is white, releasing only 50 of the same model in red will create automatic scarcity for the red one and people will be willing to pay more to have one.
Exceeding Expectations. A loyal customer comes back because they enjoyed the experience they had when purchasing your product or service. It is of the upmost importance to meet and exceed your customer’s expectations. Think of the case when you purchased a leather jacket from a fancy store. When you get home, you open the box and find that there is a bottle of leather treatment oil, a brush and a cleaning cloth. If this is paired with a well designed package, it creates a memorable experience which can translate into customer loyalty. Think of ways that you can improve your customer’s experience so you can take your brand into the Luxury market.
The success of turning a regualr brand into a Luxury Brand is not quick but it’s worth it. If you have trouble following the steps above or have further questions, we are always here to help. Do note that ther ewill be challenges as you stir the ship of your business in the sea of marketing, but it’s all about persistance. Practice the tips above and you will be on your way.
Principal and Founder of ARTC Consulting.