While luxury brands are starting to understand the importance of creating a seamless brand journey through omni-channel marketing, the luxury consumer still enjoys the personal, white glove treatment. According to a new report by the Luxury Institute, consumers rely more on the knowledge and service expertise of the in-store sales associate for their purchasing decisions than they do on their laptops or cell phones. That means luxury brands should be investing in training their sales personnel to deliver a unique and superior customer experience. Continue reading “The Sales Associate – Luxury’s Best Advantage”
When Luxury Speaks a Different Language
I recently spoke about luxury sales and customer service at a special event hosted by Quintessentially Lifestyle in Panama City, Panama. Quintessentially offers its members curated luxury lifestyle services and experiences around the globe. The event took place at the elegant Waldorf Astoria Panama Hotel and was sponsored by Mercedes-Benz, L’Oreal, Johnnie Walker Blue Label and Multiplaza Pacific Mall. Attendees included business owners and luxury associates from the hospitality, retail, banking, real estate and media sectors.
Transforming Employees into Passionate Brand Ambassadors
I was recently interviewed for the Wharton School Business radio program on Sirius XM When Things Go Wrong hosted by Christian Terwiesch. We talked about how to transform employees into passionate brand ambassadors by helping them create personalized brand heritage stories, incorporate engaging brand vocabulary into their customer conversations, and position features as benefits to the customer.
Use the player below to listen to the program.
When Luxury Gets Stingy
Unfortunately, the curtailment of expectations around services and products has become de rigueur. We suffer cramped seats on airplines, poor service from our cable providers, and smaller containers of juice (have your noticed your half-gallon of orange juice is now only 59 ounces?). But when stinginess hits the luxury sector, it’s an even more egregious offense. That’s because we expect the luxury experience to be delightful, and when it makes us feel we’re being nickled and dimed, it’s no longer a true luxury experience.
I’ve encountered this phenomenon in several instances: when I had the battery of a very expensive watch replaced and it had to be sent to the customer care center, I was charged an additional $35 to ship the watch back to my home rather than back to the store. It cost the company no more to have the watch shipped to my home, so the $35 charge was an obvious ploy to get me back into the store. Another example occurred with a recent stay at a Hyatt hotel. My bathroom amenities included soap, shampoo and conditioner, but no lotion. Thinking this was a mere oversight, I called down to the front desk and was instructed that indeed, no mistake had been made, but if I wanted lotion, I could come down to the front desk and get it myself.
That’s why I was disappointed, but not nonplussed, to read about Jeremy M. Peter’s recent trip to Hawaii in the NY Times. Though Jeremy and his partner frequented local, unpretentious accommodations through most of the trip, they decided to spend their last few nights on the Big Island splurging on a $1300/night room at the Four Seasons at Hualalai.
Though his room was elegantly appointed in dark woods with a gabled ceiling and within steps of the beach, the hotel’s service level matched neither the décor nor the surroundings. I’ll let Jeremy take the story from here:
There were little annoying disclaimers warning us that we would be charged a $30-per-person fee if we did not show up for our dinner reservation. If we wanted faster Wi-Fi in our room, that would cost us an extra $25…When we went to the Tranquility Pool, which is off-limits to anyone under 21, staff members acted as if they were doing us a favor by finding us a pair of empty chairs. “We’re really busy” were the first words out of the attendant’s mouth — much to our amazement since we looked around and saw ample room to add a couple of chairs and even a few scattered empty ones. My tranquillity was quickly dissipating.
The bartender could barely be bothered to make eye contact with the patrons. And he displayed a little sign at all times — “Hours 11 to 5” — that read like an admonishment not to dare ask for a drink if it was too close to 5 o’clock. And sure enough, at just a few minutes to 5 on both days we were there, he moved the sign over to the front of the bar to ward off any pesky, thirsty violators of his last-call diktat.
Every part of the luxury experience — from the first greeting, to the exquisite craftsmanship or exceptional service — should be about creating a delightful and memorable experience. But when the service standard does not match the level of luxury implied by the décor and price tag, the luxury customer is left feeling duped. The impression one comes away with is not of enchantment, but of overall disappointment.
Coach the Coach: A collaborative coaching technique for sales managers
A few years ago I headed up a training team for a high-end jewelry brand. We were asked to create a learning initiative to help promote diamond sales. The blended program integrated different learning methodologies including e-learning, videos, webinars, games, support tools and in-store activities. The program required sales management teams to coach their local sales teams through a multi-week agenda. While the initiative did improve diamond sales, it unfortunately brought to light a mistaken belief that our sales managers were good coaches.
We looked for a way to help our sales managers improve their coaching skills. We needed a design that was both low-cost (we had exhausted our budget) and time efficient (sales managers were bogged down with daily operational tasks). In addition, we had other programs running simultaneously and could not afford to invest a lot of resources into designing a formal coaching program. Our solution was to create a program where the sales managers became coaches for each other. Here’s how it worked:
- We scheduled 30-minute phone calls with groups of no more than 10 sales managers at a time.
- We wrote a few scenarios of sales interactions “gone wrong.” I played the role of sales associate while another team member played the customer (you could also role-pay with one of the callers if you send out the script in advance. Each scenario lasted 2-3 minutes and focused on an issue such as being rude, giving wrong information, or not asking open-ended questions.
- Prior to the call, we asked one of the sales managers to role-play as the sales manager in the scenario. Once the scenario concluded, we asked the sales manager to provide feedback to the “sales associate” (me).
- After the sales manager finished coaching the sales associate, we asked the other sales managers if they’d experienced a similar situation and how they’d handled it. We questioned whether they believed the sales associate’s behavior would change as a result of the coaching. If not, why not? If so, then why had the coaching been effective?
- We encouraged the sales managers to coach each other (hence “Coach-the-Coach”). We allowed this process to happen naturally; our role was simply to guide the conversation back if it went off track.
- We spent the last 5 minutes of each call reviewing key learning points and emailed a summary to all participants afterwards. Several sales managers offered suggestions for future scenarios.
One unanticipated benefit of the program was that the groups learned over time to trust and depend on each other for advice. The Coach-the-Coach program proved to be a quick, interactive, fun, and convenient way for our sales managers to hone their coaching skills.
Luxury Talent Goes Big
This Harvard Business Review post, “Luxury’s Talent Factories,” discusses how large luxury conglomerates such as LVMH, Kering and Richemont actually drive talent performance. Most management research would argue the opposite. It’s generally accepted that companies can increase their financial returns by focusing on core lines of business. Contrary to this evidence, the article states: “Diversification generally does not add value unless there are significant cost savings and operational synergies across units—which isn’t necessarily the case with all luxury groups.”
Diversification generally does not add value unless there are significant cost savings and operational synergies across units—which isn’t necessarily the case with all luxury groups.
According to the article, here are some of the reasons the “Big 3” are able to use their size to their business advantage in developing luxury talent:
Mobility – Diversification of internal brands means that employees who move from subsidiary to subsidiary bring a core set of brand values and skills. They are also better able to build their personal networks across multiple internal brands. The advantage to the enterprise is that they’re able to leverage talent when and where they need it.
Best practices – The organization can identify and transfer best practices across products, and gain the benefit of new perspectives at the same time. In one case, CRM talent from a fashion group was brought in to help build a CRM function for a watch brand.
International Experience – Cross-cultural exposure inspires creativity and provides exposure to a larger pool of manufacturers and suppliers.
Understanding the Global Customer – As technology and social media create a growing international marketplace, it’s imperative that brands understand how luxury customer expectations vary from country to country.
Although Europeans can explain to customers what luxury means, they also must have experience in foreign markets to understand which aspects of luxury the customers there actually care about. For example, in America consumers will buy watches for their functionality or performance, whereas in Asia it’s more about the prestige of the brand.
The three large luxury groups are able to leverage these advantages for the individual as well as for the enterprise. It only works, however, when the group is able to keep its brands relevant and continuously invests in developing premium talent.
The ROI of Customer Retention
This infographic by Shankman-Honig does a great job of demonstrating the cost of lost customers and what can happen when brands start focusing on customer retention:
A “May” Reminder
It’s May! After a long, chilly winter it’s nice to feel the weather warming and to see the flowers blooming. Spring brings rain and violets. It brings spring cleaning and the desire to perhaps add a few new pieces to my wardrobe. I know that as I start my spring shopping, my ears will be filled with the sound of buzzing bees and sales associates asking “May I help you?” Continue reading “A “May” Reminder”
Please don’t be rude!
Milton Pedraza, CEO of Luxury Institute recently confirmed, “Luxury brands lose half of their top customers every year. The biggest reason why a consumer won’t come back is not the product—it’s a rude or inattentive salesperson” (The new face of luxury: breaking down the myths and stereotypes of the luxury shopper). On the surface this statement seems to contradict the finding of a recent study titled, Should the Devil Sell Prada? Retail Rejection Increases Aspiring Consumers’ Desire for the Brand (October 2014 Journal of Consumer Research). The study (co-authored by Dr. Darren Dahl, a marketing professor at the Sauder School of Business and Prof. Morgan Ward of the Cox School of Business) found customers who receive poor treatment from sales associates in a luxury retail environment are more likely to make a purchase.
Luxury brands lose half of their top customers every year. The biggest reason why a consumer won’t come back is not the product—it’s a rude or inattentive salesperson
Handling Customer Complaints with Grace
When customers have a higher expectation of service, as in the luxury sector, the potential for customer dissatisfaction increases. I may not expect a hand-written thank-you note after purchasing a fashion ring at Macy’s, but I’d be surprised not to receive one if I bought a yellow-diamond pendant at Tiffany & Co. Because the service expectations of the luxury customer are so high, complaints need to be handled with extra care.
The goal, of course, is to prevent customer complaints altogether by listening attentively to the customer and ensuring seamless service. But things can and do go wrong, even in a luxury environment. When they do, it’s important to remember to act with grace. The dictionary defines ‘grace’ as a polite or pleasant way of behaving. It’s important to note as well, that the word ‘grace’ comes from the Latin gratia—to give thanks. Many people say grace before a meal in order to express gratitude. In the same way, a complaint can be seen as a gift. It presents an opportunity to exceed customer expectations and create loyalty. When we handle the complaint with grace, we are thankful for this gift.
When a customer is dissatisfied with your product or service, here are six steps you can follow: Continue reading “Handling Customer Complaints with Grace”
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