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Winning Over Luxury Customers: Why Experience Beats Discounts


Does Price Matter to Luxury Customers? Absolutely!


In one of my recent training sessions for a luxury brand, an interesting topic emerged — the age-old price objection. My client, a multi-brand luxury store, highlighted how sales professionals often face the challenge of price comparison with online platforms or other markets. The modern luxury customer is more informed than ever, conducting research and comparing prices meticulously before committing to a purchase.

 

While many of us in the luxury industry like to believe that luxury customers are not price-sensitive, the reality can be quite different. Many luxury shoppers do, in fact, seek out the best deal. Take, for example, the current trend of Chinese luxury consumers shopping in Japan. The weakened yen has made Japan a more attractive destination for luxury shoppers, solely based on price differences. This phenomenon tells us one thing: price is still part of the decision-making process for many luxury buyers.

 

There was a time when luxury brands thrived purely on the strength of their logo. Clever marketing campaigns and the allure of exclusivity allowed brands to price products significantly higher than the cost of production. Customers seemed not to mind—or so we thought. The luxury market slowdown in 2024 reveals a different story. Luxury customers are becoming disillusioned. Gen Z consumers, in particular, are seeking brands with real purpose and a focus on sustainability and meaningful consumption. Meanwhile, seasoned luxury buyers are turning towards “quiet luxury,” which values craftsmanship and quality over flash and ostentation.

 

Given these shifts, many luxury brands are tempted to respond with short-term tactics like promotions, discounting, and price reductions to boost sales. However, these approaches can erode the brand’s positioning, resulting in a loss of trust and long-term desirability.

 

Shifting Focus to Value Creation

 Rather than reacting to market pressures with discounts, luxury brands must focus on elevating value. Value, in the world of luxury, is all about perception. Enhancing the customer experience is a proven way to increase that perception. When brands create memorable and delightful experiences, customers are more likely to see the value in the brand, making price less of a determining factor in their purchase decisions.


The key to overcoming price sensitivity is to focus on delivering real value through the luxury experience. Here are several ways your customer experience (CX) can help elevate that perception of value:

 

1. Personalisation: Luxury customers enjoy being recognised as individuals and expect tailored interactions that reflect their unique preferences and tastes. Luxury e-commerce sellers like Farfetch have set a high standard by leveraging data to offer personalized recommendations and exclusive services to individual customers. By using customer data to understand individual buying habits and preferences, brands can deliver a personalized touch that makes the customer feel valued and understood. Imagine the impact of walking into a store and being greeted by name, with staff already aware of your tastes and preferences, ready with personalized recommendations. Personalization like this builds a stronger connection and instills a sense of loyalty, making customers less likely to focus on price alone.

 

2. Highly Trained Sales Professionals: A knowledgeable and empathetic salesperson can turn a price-sensitive customer into a loyal brand advocate. Training your sales team to handle price objections with finesse and confidence is critical. Instead of focusing on price comparisons, a well-trained salesperson can shift the conversation towards the unique value that the brand offers. They can emphasize the craftsmanship, narrate brand stories, offer styling tips and useful advice. Human connection also plays a significant role in value perception. Customers appreciate when sales staff go the extra mile and create a genuine rapport. Louis Vuitton is a great example of a luxury brand that trains their staff relentlessly to offer consistently delightful service across the globe. This kind of relationship-building adds value beyond the tangible product, making price less of a factor.

 

3. Brand Storytelling: In the world of luxury, it’s not just about what you sell, but the stories behind the products that give them life and meaning. Craftsmanship, heritage, and sustainability are becoming increasingly important to today’s luxury customer. Telling a compelling brand story — one that resonates with your customers' values — can significantly enhance the perception of value. Ermenegildo Zegna is a luxury brand that leverages a compelling story about their end to end, sheep to shop process. They own their own farms and use their own wool to make the finest luxury menswear. The story easily makes the customer feel they could own something truly superior, taking their focus away from price.

 

4. Exclusive Services: Creating a VIP experience for your customers is another way to add significant value. Concierge services, click and collect, alterations, personal shoppers, home consultations and delivery, exclusive access to events or new collections are some of the ways luxury brands can make the customer feel special and part of an elite community. Harrods, the world's foremost luxury shopping destinations does a great job of offering an array of value added services to customers. By offering additional services, brands not only enhance the value of their luxury goods but they foster loyalty.

 

5. Building a Sense of Belonging: Luxury customers don’t just want to purchase products; they want to belong to something bigger with resonates with their values. Whether it’s exclusive membership programs, invitation-only events, or private social media communities, creating a community where luxury customers can connect with like-minded individuals enhances the brand experience and makes customers feel wanted. Brands like Hermès have long thrived on cultivating a sense of belonging through invitation-only events and intimate customer engagements. This sense of community creates emotional loyalty, making customers feel like they’re part of an exclusive club, which ultimately outweighs price concerns.

 

Conclusion: Crafting Memorable Experiences Is Key to Growth

 

In a challenging market, the way forward for luxury brands is clear: elevate the experience to enhance value. Customers need to feel more than just a transaction—they should feel connected, understood, and valued. Through personalization, impeccable service, storytelling, and creating a community, brands can shift the conversation away from price and toward the exceptional experiences that only luxury can provide.



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