Success in the Luxury Industry

By: Madhiha Taseen

According to the Luxury Institute, most luxury brands lose 80% to 90% of their customers after the first sale. But those with a relationship with a salesperson typically spend 2x as much and stay loyal for longer. Although expensive, investing in a customer management system is necessary to highly serve customers and stay relevant in the industry.

The following are the 3 best practices of the luxury industry:

SEGMENTATION AND CLIENTELING

To make personalization possible, it is important to put clients into meaningful groups for the purpose of marketing. It requires correctly making use of POS and CRM systems and making the information therein available to everyone in the team.

A useful segmentation process is RFM: Recency, Frequency and Monetary value. Salespeople can prioritize based on how recently a customer purchased, how often, and how many times they have made that purchase. Salespeople are critical in this process of collecting data, engaging clients, and developing meaningful relationships with them.

IDENTIFYING LIFESTYLE AND BEHAVIORAL FACTORS

The next step to learn about customers is to identify spending behavior, search criteria, past purchases and even marital status to customize experiences. Systems to process data should be done in a useful manner for online and in-store salespeople.

CUSTOMIZATION AND PERSONALIZATION

Finally, identify additional affecting factors (if they are frequent travelers, if prefer wildlife over resort vacations, etc.) to determine products, discounts or incentives to even further customize experience. One-on-one dialogue is a simple yet effective personalization technique.

Once relationships are formed and customers are becoming loyal to the brand, they should be rewarded and valued through the perks and privileges to continue their engagement.

In summary:

  • Everyone wants to be treated like gold.
  • The industry requires investing into a people-centric culture.
  • Segment, Identify, Personalize.
  • Doing so may double your return.

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