Posted by Dave Lorenzo - Business Coach

I stumbled across this article in the Wall Street Journal last week and it reaffirmed a general principle I teach my clients. 

That principle:  Every business should have a luxury offering.

Why?  Luxury purchases are emotional and value is in the eye of the beholder.  Here are four of the emotional triggers associated with luxury products and services:

Pride of Spending – Clients will be proud to show off a product or service for which they have paid a premium.  Remember the line “if you have to ask you can’t afford it”?  Who wouldn’t want someone to say that about your product?

Perception of Quality – “You get what you pay for”.  Think about a good defense attorney.  If you were on death row would you want the public defender (who’s free) or would you want the guy who charges $750/hour?  Note:  this is the perception of quality and not necessarily the actual quality.  Still, people buy based upon their perception.

Confidence in the Brand – For some reason, paying more will often increase the confidence that people have in your brand.  The thinking is that if it costs a lot it must be good.  See Mercedes vehicles if you doubt this.  Lexus vehicles are more reliable and arguably better built but what do most of the affluent folks in your neighborhood drive?

Buzz – Spending big bucks certainly gets people talking.  Some people like it when others talk about them.  Why not have people talk about their friends because of  the money they are spending on your product or service?

So let’s say you’re a local business – how do you add a luxury brand extension?

In retail I advise clients to start a Private Client Group that includes personal shopping or clientelling.  In most cases this involves shopping by appointment, sometimes during times when the store is closed.  In other cases this involves access to products or services days or weeks before the general public.  In still other cases this may mean not going to the store at all. I have one client who brings the latest fashions to her Private Clients twice per month.

For service businesses this could mean 24–hour service at a moment’s notice – or a regular “check-up” that other clients don’t get.  I have a plumber as a client who performs monthly “check-ups” on the air conditioning systems of his Private Clients. My auto repair shop clients go to their Private Client’s homes, pick up the car and drop it off after the repair is finished.  They also provide a loaner car to the client.

Finally, I have a restaurant client that provides limo service to and from the restaurant for their Private Clients.

Oh, by the way, luxury clients are at least twice as profitable as their “affordable” counterparts.  Is this something you can work into your business? 

Filed under: Marketing
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