The rich may be different, but not as much as you might think. As wealth continues to concentrate at the affluent end of the spectrum and predictions trend toward slower growth, luxury market behavior may hold important lessons for marketers at all points along the scale. In a recent white paper by The Luxury Institute, several trends treading into 2014 caught my attention.
The report mentions that top luxury brands are dumping CRM firms failing to deliver on promises. And, I might add, why shouldn’t they? No one, no matter the market, should be sending budgets toward firms that are not accurate, timely, nor supportive.
Luxury brands, it seems, are also dropping budgets for analysts unable to provide highly accurate attribution to sales channels. Just like everyone else, luxury brands want to know where their marketing investments have the biggest bang for the buck in the customer sales journey. Holy grail. It’s what every brand wants to know. It should also be what every marketing analyst strives to provide.
“Most of it is exhaust,” claimed the report of on Big Data. True. However, one man’s exhaust is another man’s fuel, so it is important, no matter the market segment or level, to look at the big picture and choose wisely. Interestingly enough, the report hints that luxury brands may be crossing this off their lists as well, preferring direct, personal interaction with customers on a daily basis.
The report discusses a new luxury market profit model embracing customer culture, underscored by a 2013 Deloitte study on culture and values. The study affirms that companies that do good while doing business are far more profitable than those that simply sell themselves. The Luxury Institute studies indicate that data collection increases three-fold, and retention two-fold, in the top tier of customers responsible for 70 percent of sales. Taxes may have something to do with the popularity of charitable causes, but when it comes right down to it, who can argue with a firm that donates to the Humane Society or local schools?
I have to send out a big Chertudi “hurrah” to the luxury market. I know why those CRM vendors were dumped. It’s complicated. I’ve seen lots of models and systems take their shot at getting attribution right for significantly improved CRM. For the first time since I’ve been in this industry, we finally have a highly reliable attribution system that tells us where our marketing is really working.
It is fascinating to peer inside the attribution data and see the importance of connecting CRM to behavioral data. I’ve always known that email marketing was important. I was shocked to see in a recent study that email is a key driver in multichannel sequences, with scenarios going something like email-email-email-purchase or email-search-email-purchase, with emails carrying significant weight in the process.
Adobe truly is a highly considered luxury brand of software, especially the Creative Suite division. We also have noted the importance of moving from an online “vending machine” to a personalized culture that shifts the transaction in a customer-centric direction. Conversion comes from earning our trust online as customers vote with their dollars, appreciating the opportunity to tailor their subscriptions to their needs and trying before they buy.
The bottom line is that luxury brands will be tightening their 2014 marketing belts while focusing on engaging customers with the human touch of customer culture. If you haven’t already felt these trends, take a page from The Luxury Institute. Focus on customer-centric strategies, giving customers accurate, pertinent information to help them make quick, solid decisions. They will reward you for it with product loyalty.