Customer engagement strategy used by luxury brands
A guide examining the customer experience and engagement strategies used by luxury brands
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What is customer engagement?
Customer Engagement is a unique connection and a to-and-fro interaction between a customer and a brand. A highly engaged customer demonstrates more trust, purchases more, spreads brand positivity. Providing a greater quality of customer experience is an important construct in your customer engagement strategy. This becomes furthermore crucial in case of luxury brands where product and purchase experience become an important selling point along with product.
Why premium brands are built on a great customer experience?
In this era of the empowered customer who has 24/7 access to information, brands have to act intentionally according to what’s important to the customer, how they want to be serviced and how luxury brands fit into customers' lives.
“Affluent customers already place a higher value on experiences rather than possessions” says Christophe Caïs, and they look for brands which represent a certain lifestyle. It is argued that CX is now more important than the price of a product - and even the product itself. Luxury shopping is more than a transactional purchase, it’s an emotional investment and customers expect a premium, luxurious experience.
Customer engagement, specially when it comes to luxury brands benefits both brand as well as the customer by making them know more about the other. Brands interacts with customers throughout their purchase journey in order to get the customer insights such as preferences, priorities and lifestyle of customer and thus suggest the best fit and personalised product. Customers interact with brands to learn about the products and identify the product that fulfils their product as well and psychological needs.
“An industry once dominated by middle-aged affluent buyers is now seeing a strong cohort of younger shoppers holding off on buying homes and cars, and instead splurging on limited-edition sneakers or the latest collection by an emerging designer,” says Vision Critical . Advancement in technologies have allowed younger customers to network and communicate directly with the brands through multiple offline and online channels. This integrated engagement with customers helps brands to learn the personal preferences and unique needs which are inherent factors for overall customer experience. According to Bain & Company; “this ‘Millennial state of mind’ is permeating the luxury industry and changing the purchasing habits of all generations.”
Here, CX Network examines strategies used by brands to bring luxury CX to life with the aid of technology and innovation.
What are various customer engagement strategies?
- Memberships and in-store experiences
“Experts say that more than 90% of luxury sales still take place in stores. But the new focus is on experiential retailing. It’s all about ‘who I am’ rather than ‘what I have’… Experiential retailing needs to offer luxury consumers a place to not only shop, but also listen to music, eat luxurious foods, touch and try products, and most importantly, hang out with their friends and share the experience.”
Many luxury brands host VIP, member-only events such as fine dining experiences, spas and wellness centres. These exclusive events add a social dimension to the brand and also allow the target audience to test products. Sales advisors transform into ‘lifestyle managers,’ ”who act as curators, tailoring experiences and products to the [tastes] of individual clients.” - Albatross
- Knowledgeable and empathetic frontline talent
A friendly, knowledgeable representative is seen by many as the most important element of good customer experiences. Every ‘function, feature, colour, size and usability’ must be known by the brand’s sales people/‘lifestyle managers’. When a staff member illustrates they are intellectually invested in a brand and its products, this boosts the prospect’s confidence in the professional’s opinion and leads to increased customer purchasing.
Being met by a friendly, approachable staff member who seems happy to see you and 100% willing to help delights customers. Staff members should balance this with knowing when to give customers sufficient space to browse. Each customer deserves respectful, understanding and helpful service - even if it’s the 100th interaction of the day. High-end businesses pride themselves on this trait.
According to Rutgers; “customers want ‘emotional luxury’ derived from feeling recognised, special, and known.” The everyday person is becoming increasingly exposed to luxury experiences; brands like Uber, offer a personal chauffeur on-demand through a streamline app. “Premium brands cannot differentiate on technology alone to acquire and retain customers. That requires developing brand representatives whose service orientation is rooted in emotional intelligence.”
Marketers try to put helpful insights into the hands of emotionally intelligent employees by decoding past behaviours, signals and buying traits. This paired with training on empathy, anticipation and learned contextual listening empowers the employees to provide differentiated experiences for the customer. Positive emotions feed into long lasting rapport between brand and consumer.
Read: Global State of Customer Experience
- Premium personalisation
What’s more special than knowing something is yours, and yours only? Brands like Jo Malone - Tailor your scent offers customers a personalised scent with an opulent experience - the process is half the fun. Acknowledging customers’ desires for options tailored to them, enhances their experience. Big data, advanced analytics and AI are enabling brands to pinpoint trends in customer preferences. Customers often share information about themselves with businesses, so offering personalised deals for their birthday, for example, or monitoring buying habits to offer products similar to previous purchases, helps to impress the customer and make them feel valued. When it comes to delighting the customer, luxury brands must use this attention to detail to offer something personally special and unique to prospects.
- Data science and predictive customer experience
Behavioural data has the potential to help luxury brands outmaneuver cheaper and direct competitors. Data visibility is key to being one step ahead to anticipate customer needs and surprise them with personalised suggestions. Richard Wheaton from The Drum explained; “As the customer weaves her path to purchase between the physical and digital world, she exchanges data that we want in return for information that she wants… With the right mix of data activation and data science, the consumer’s touchpoints can be mined to understand the likeliest next action – be it a store visit, a phone enquiry, booking of an appointment, or leaving never to return… This type of digital “closed loop” opens up a wealth of opportunities. The in-depth customer knowledge of their buying history and their online enquiry enables a greatly enhanced in-store appointment. Product recommendations based on this data can, for instance, be shared with salespeople ahead of the appointment, so the customer can have a completely personalised experience, with their needs anticipated and any ideas for matching or ancillary purchases curated to be ready on their arrival.” This behavioural data is also useful for sentiment analysis, flagging angry customers at risk of churning. Some customer data platforms have the ability to go one step further and advise staff members on how to best recover the situation.
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The challenge comes in collecting usable, structured and arbitrated data from an in-store or analogue environment. The answer lies in mimicking on-line journeys in the off-line world and as a byproduct collecting the data for analysis. Currently, this is a work in progress, but the technology to deliver this will soon be available and could be game-changing.
- Accurately actioning voice of the customer data
Customers will highlight issues that may be missed internally. With luxury, it’s assumed that when a customer offers an opinion it is not just acknowledged, but actioned - especially in the case of complaints these need to be resolved swiftly and with empathy. It’s one thing to say, ‘we’ve received your feedback’ but it’s another to react with helpful, compassionate solutions.
Only relying on post-purchasing questionnaires such as NPS scores will not give an accurate reflection of your brand’s performance as you will only be hearing from customers that have made a purchase. Christophe Caïs Owner & CEO at Albatross Global Solutions explains if a customer has made a purchase, it is likely they have had a good customer experience, this correlation alone could “skew the overall results towards the positive”. Sales associates may avoid inviting customers to complete a survey if they suspect the response will be negative, this further distorts the data. He reminds that the average conversion rate for luxury boutiques is only 15%, which means 85% of customers are ignored. “Inaccurate negative feedback at least motivates change - inaccurate positive feedback can mask dissatisfaction and lead to a comfortable complacency with ineffective processes.”
Albatross suggests the ‘Store Performance Evaluation Programme’ which uses ‘trained evaluators’ whose “profiles are similar to that of the brand’s core clientele” allow for a more accurate representation of your customers journey at each touch point, online and in store. Correlation analysis evaluates the aggregated data and reveals moments that drive your CX, emotional engagement and brand advocacy. This gives your brand “crucial guidance on where and how it should focus its training programs to achieve the most significant results.”
Nikki Gilliland believes there should be more focus on ‘love metrics;’ These are measurements that focus on ‘active metrics’ such as referral or retention rates, which show how customers interact with a service. Downloading the app is one thing, but using and engaging with it, is another.
Listen carefully to feedback, requests, complaints and suggestions - these tactics have unlocked trailblazing strategies for some firms that have even won them significant market share.
- Removing points of friction
Frictionless purchasing isn’t the end of the buyers experience. Free return shipping, easy in-store returns and quick return processing are now the norm. While it may be expensive for the retailer, these elements are absolutely a necessity to build on customer retention in the long run. If you can buy £10 headphones on Amazon Prime and they’ll arrive the same evening, why should you wait longer for your £10,000 watch?
- Consistency
“Consistency helps make customers feel comfortable” says Pip Stocks, CMO. As the infamous saying goes; ‘you get what you pay for’ but when it comes to luxury, you expect a little bit more - every time. When a customer receives positive interactions, consistently, they will be excited to return, time and again. It’s comforting to know exactly what to expect, especially when interactions are consistently delightful.
- Brand voice, tone and attitude
Every customer care specialist must have a core understanding of the company's ethos. Every phone call, email response, chat reply and in-store customer should leave with the exact same positive feeling. Customers recognise subtle branding and will associate it with the company’s ‘experience.’ This is expected of all brands a customer interacts with, so how do luxury brands go the extra mile? Usually by adding a personal touch, staying formal, respectful and without impatience. Luxury brands need to do the unexpected, be unique and remain an allure of elegance and alacrity.
- Communication
Oliver Fehl Senior Director Retail Concepts at Adidas told the CX Network that simplicity is key; “customers don’t want complication, both on and offline - these are the expectations. You have to communicate to the customer on a level that works for them.” Customers want to seamlessly navigate or be navigated around the customer journey, moving between platforms seamlessly. This constantly-connected consumer wants to be proactively communicated with and have their pain-points intuitively predicted to solve any potential problems. It is the responsibility of the company to initiate conversation, particularly when it comes to luxury experiences - remember - luxury brands must always be at least one step ahead of the customer.
- Online channels
High-end brands have traditionally approached online selling with caution, as they feared it cheapened their brand or made it less exclusive. It is imperative that brands have an online presence if they want to maintain or boost sales, especially on mobile devices. Shopping online is now an activity people indulge in at work, in front of the TV and even in the bath.
Product pages must demonstrate the intricacies and craft of luxury products in minuscule detail, so invest in specialised photographic equipment. Rolex the wrist statement for wealth and class has web pages that are elegantly simplistic with high quality imagery that truly showcases the multi-million dollar intricacies of its mechanical craftsmanship.
Blogs, regular content and news are native to millennials, and often relied upon for education and inspiration. Louis Vuitton and Gucci use their blogs LV Now and Gucci Stories to promote new lines, news, events and notable exhibitions. The brands’ creative, insightful content engages customers and spikes interest.
Related content: Why personalization is crucial for CX success
- Social media
Luxury brands have notoriously branded themselves on exclusivity, and shunned social media in fear of cheapening the brand. But now that the consumer is becoming increasingly computer literate and younger customers have more disposable income to enjoy spending, it would be a mistake to neglect connecting with these customers online. Social media platforms allow customers to speak directly to brands and influencers thus leading to empowerment, engagement and also allows the brand to update each customer of their journey personally. “Behavioural psychology tells us the more empowered, engaged, and updated customers [are] during their journey, the less likely they are to assign blame to the brand when things go wrong.”
Tiffany & Co. tapped into the ‘Millennial Mindset’ by making its London’s Covent Garden store, ‘Instagrammable’ with a ‘fun’ interior, selling everyday items with the goal of modernising the brand for a younger, more “socially-savvy” audience. Louboutin also has a strong social media presence fit with dynamic imagery and fresh content that showcases new products and events.
What are the advantages of customer engagement in luxury brands?
- Enhances brand value, brand image and end-to-end purchase experience.
- Increases customer trust and loyalty.
- Provides important customer insights and statistics.
- Helps boost overall sales and revenue.
- Improves overall customer journey.
Conclusion
Luxury products often involve a significant financial investment, in return for this customers have high expectations about the quality of experience they deserve. To exceed these desires luxury brands need to consistently deliver convenient, premium journeys that make customers feel both prestigious and valued. Otherwise, in today’s switching economy they will risk losing clients to competitors.
Quick links
Everything you need to know about customer loyalty in 2023: A CX Network Guide
The complete CX Network guide to NPS
The influence of emotion in employee engagement
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