In the luxury business, customers always expect more. Quality and brand appeal simply aren’t enough. Luxury retailers need closer ties to their customer, but how do you go about it?
Whether you look towards the longer term, or go for growth, luxury brands are often faced with this type of dilemma. And it usually means having to take advantage of the different distribution channels to deliver a complete and unique experience. That might be easier said than done, as attracting new customers, retaining them and providing a service that always exceeds ever-demanding expectations is a constant challenge. So, here’s an idea how.
Clienteling: the right idea
By carefully keeping track of a customer’s purchase history, their preferences and tastes, clienteling helps retailers get to know their customer better so that they can hone their offer. This leads to much higher levels of service, greater loyalty and improved customer relations. And yet, in luxury, it’s not just about selling volumes; but more to do with making sure that bigger spenders get such good, personalised service that they regularly come back. Attention to detail and good customer knowledge are essential. This makes a good customer relationship management (CRM) tool an essential ingredient to the prosperity and sustainable growth of luxury brands.
Customer relations and increased sales
With clienteling, data collection rates can be tripled and retention rates doubled, especially among the top 20% of customers who generate 70% of sales.* Clienteling and CRM tools offer an all-round view of the customer, whether via a mobile device, or in-store. This information helps sales staff in their interactions with customers. For example, if a previously out-of-stock item becomes available again, retailers can then get in touch with those customers who has expressed interest before and make them feel more valued.
Mobile technology: an essential tool
In the luxury business, targeted selling and clienteling increasingly requires the use of mobile technology. Fortunately, most luxury brands have the budget and realise the value of investing in tablets and other devices in order to make the most of a customer’s visit to a store. As well as fostering a closer relationship with the client, mobile devices provide staff with real-time information. This includes notes about a customer’s profile, their preferences and purchase history, so that, with just a few clicks, staff can make more personalised recommendations. Sales staff can also provide additional services, such as ordering products not available in certain stores and organising store transfers or home deliveries. These types of interactions are expected to equate to about 40% of the luxury market’s growth by 2020. **
Stringent collection of personal data
You should be aware that high-end customers are generally reluctant to disclose their personal data, so you need to be careful how you go about it. Be as discreet as possible and always ask first whether the customer wishes to be contacted. You need their permission and also vigilant about the different rules in different countries on taxation and confidentiality. In China, for example, customer information may not be distributed or used outside the country.
It’s also important to ensure a consistent level of service across all stores of a luxury brand. Whether you’re in a store in Paris one day, or in Moscow the week after, all customers should receive the same level of service and care. The luxury market is now more competitive than ever before, and so loyalty is extremely important. To succeed, luxury brands need to adopt a more personalised approach by using whatever information they can to help sway the customer.
Source: Luxury Institute LLC, 2013 / ** Source: Extant BNP Paribas