luxury brand

Doing or Being?

Isaac Mostovicz writes that marketers must focus on understanding what motivates their customers above all else ...

I recently gave a keynote speech at an international conference in Lisbon, Portugal. The topic of the conference was “Marketing & Consumption: What future?”  I offered a variation on this topic which discussed the way marketing heads are discussing, “Marketing: quo vadis?”

 

Reflecting on luxury, I think that we sometimes err in our thinking. We believe that if we could only define what marketing or luxury or brand are, we’d have found a Holy Grail. Thus, with the mysterious exception of luxury, many articles and textbooks try to create as accurate as possible definitions of what marketing or brand are. The question is, of course, once we have a definition what can we do with it? The answer is very obvious – nothing.

Isaac Mostovicz presents at the “Marketing & Consumption: What future?” conference

Well, some of us enjoy knowledge for the sake of it and there are experts in brands and marketing just as there are experts in medieval Mongolian poetry, pre-historic music or other esoteric topics. However, when we want to put this marketing knowledge to use, we fail. One of the leading journals in marketing checked how many practicing marketers research their field or read the findings that appeared in that journal, which claims that its audience consists of both academia and marketing practitioners. The answer was, as you might expect, that nobody cares to read or learn what those findings are.

 

In my opinion, we make the cardinal mistake of asking the wrong question. The question is not what marketing is but what marketing /brand/ luxury does. How does it affect us, what benefits do we draw from it and how can we properly use this knowledge? This question is not simply a different question but indicates a mindset that is opposite to the one prevailing in academic and practitioners’ circles. While trying to understand what a term like marketing is reflects on us and on our egoistic satisfaction, asking what something like marketing does recognises that there is a world around us that we need to satisfy, that we want to affect and influence and that we need to consider first.

 

Others agree with my approach, e.g. Ernest Dichter, the father of motivational research that changed the landscape of US marketing . Additionally, in 1960, Theodore Levitt published “What is Marketing?”, arguably the most popular article to appear in Harvard Business review of all time and said, “when a customer asks you for a ¼” drill he actually asking for a ¼” hole”. Both of them told us that marketing starts with knowing who your customer is and what they want. However, despite the sound nature of this simple idea and vast empirical proof, marketers are not as focused as intensely as they should be on what emotions are driving their customers. When checking who the customer is, marketers must look at the deeper psychological layers that motivate the customer to choose one product or option over the other.

 

This lack of customer insight is widely apparent, and to cite the recent Goldman Sachs example, it’s clear that treatment of customers can range from extremely bad to extremely good.  To take myself as an example, I would not choose Goldman Sachs as a financial provider because they are apparently untrustworthy, but it’s possible that they employ managers that are genuinely nice people who have merely acted in an untrustworthy fashion. In this way, my motivation for choosing a product has been selecting what I perceive to be a “good” brand (if such a one exists) over a “bad” one.

 

To use a different example – Blackberry, iPhone and Android phones are all excellent products but customers will choose one option over the other equally good option. In this instance, as marketers we should understand what the parameters are that have made each customer identify with the different product. The assumption is that the customer who wants a BlackBerry doesn’t want an iPhone – I know that some people prefer the Android operating systems over those of the iPhone, for example. Nevertheless, they might advise me to buy an iPhone since my psychological needs are totally different to theirs.

 

When dealing with my own customers I always ask, “Who is your customer?” and gradually, people start to realize that they cannot describe him or her to me. What I am actually looking for is a description that allows me to identify the typical customer according to defined parameters, but it seems that nobody can describe what those parameters are. For example, one client told me that he has 10,000 customers. But he was actually referring to 10,000 people he has served in his shop at one moment or another. Yes, they were his customers in the past but can he consider them future customers? Will they visit him the next time they shop? Past performance is not a guarantee for future success.

 

Another question I ask them is what the needs of their customers are. Of course, every jeweler will tell you that their customer is looking for jewelry and every owner of a shoe shop knows that people come to their shop to buy shoes. But does the shopkeeper know what motivates the customer? Can he recognize their deeper reasons for wanting a particular product? When dealing with my customers, most cannot answer this simple question or, in Theodore Levitt’s words, my clients know that the customer wants a ¼” drill but they do not know what the ¼” hole looks like.

 

Brand consulting suffers from a similar problem.  A typical request that one of my clients made was that “we need to be differentiated and we need branding”. I told him that the cheapest and quickest way would be for his entire company to paint their faces green – that would differentiate them and even attract a lot of media attention. Actually, my client realized what his company’s problem wa – all the companies in his industry (hi-tech) look the same. He failed, though by spelling out only half of the problem. While he wanted to be differentiated, he did not consider the situation through the eyes of his clients or consider how this differentiation would address his client’s needs. Well, this is the just the beginning.

 

Brand takes us one step further. When I asked this client to describe his customer of choice and to use a real-life example, his face lit up and he told me about two of his preferred customers. He quickly told me that it was not the money his company earned on the deals that was important to him, but the bond he created with these customers. Not all our customers are those we would like to work with and not everyone is our customer of choice. It is not enough to know who our customer is or what his needs are. We need also to know who we are and what our needs are. If we manage to match our needs with those of our customers, then we have a strong brand. Do we need to differentiate? Not exactly. What we need to understand is that if we really want to interact with only those who share the same worldview and deep needs with us, our market is limited. A brand’s profit does not come from sheer volume of sales but from our ability to address the needs of our customer of choice in a way nobody else can – because we truly and intuitively understand their needs.

 

Luxury marketing is the ultimate test. Luxury is the behavior of needlessly overspending. We cannot begin marketing if we do not intimately know who our customer is and what their needs really are. Describing luxury behavior as needless tells us that those needs are much deeper and cannot be logically explained. Do we know what they are and do we know who our customer is? Can we describe the parameters that will allow us to find our customers? In terms of our brand, are we proud about what we offer? Will we be able to look back when time arrives and say that we believed in what we were doing? Luxury strips away all superficial logical arguments and asks us to delve deep and to face the real questions. Do we know how to do this?

 

Apple is the rare example of a brand that does know how to do this. It really understands its customers and that is why its fans are so loyal. The brand also develops its products according to the needs of its customers. The fact that their systems are a “walled garden” to other technology companies and that each application for the iPhone requires Apple’s approval is not mere greed, but based on a deep understanding of their customers’ needs.

knokke says of this article...

hi Isaac,
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knokkeavenue@gmail.com

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Tiffany & Co – Where the Heart leads the Head

Isaac Mostovicz writes that Tiffany's new digital campaign aims to capture consumers' hearts as well as minds ...

I have written previously about luxury brands’ adoption of digital campaigns, for example designer Marc Jacobs’ MarcFam which encourages consumers to interact with the brand online via Twitter and Instagram.

 

I read with interest about the latest instalment of luxury jeweller Tiffany’s digital campaign “What Makes Love True,” which has adopted a similar approach in terms of digital user interaction. However this campaign, based on the concept of the art of love and romance, invites users into a world charged with emotion, presented in a highly immersive digital environment.

 

The first part of the campaign incorporates brand and user created content – videos of consumers narrating tales of “true love,” an interactive map where consumers share locations where they have experienced romance, and additional filmed content. For the second part of the campaign, launching next week, consumers will be able to upload their own tangible examples of “true love” through a user-curated gallery.

 

I have written in the past on the importance of brands connecting to consumers’ emotions, and this is a very successful association for a brand that wants to position itself as having a major significance at “life-stage” events such as engagements and weddings – with that significance now firmly embedded through its own virtual environment.

 

Chris Ramey, president of Affluent Insights, Miami commented: “Selling product benefits is, today, a failed strategy. Tapping into your prospect’s deep-seated values and emotions is key.

 

“Tiffany understands this marketing evolution as well as anyone,” he said. “Emotive selling connects neurologically to consumers who are disinclined to buy more stuff.

 

“This is the new reality for selling luxury.”

 

The What Makes Love True microsite can be found at

http://www.whatmakeslovetrue.com.

True Love in Pictures by Tiffany & Co

 

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India’s space challenge drives new trends in luxury shopping

Isaac Mostovicz writes that luxury brands in India are turning to home delivery options to reach their clients...

India is one of the four largest emerging economies (in addition to Brazil, China and Russia) and is expected to surpass China to be the world’s most populated country in the coming decade. With its count of High Net-Worth Individuals more than doubling in the past year (according to the World Wealth Report recently released by Capgemini and Merrill Lynch Wealth Management), there is certainly plenty of potential consumers for a variety of products and services.

Luxury brands are relatively well established in India; its first two luxury malls opened in 2008 – DLF Emporio in Delhi and UB City in Bangalore. Although welcomed by luxury retailers at the time, allowing them to expand out of the five-star hotels where they had traditionally confined themselves, in recent months the lack of appropriate retail space for luxury brands has become an issue. This is further compounded by soaring rental prices on what is available, meaning rents are far beyond what brands are willing to pay.

According to a report by international real estate consulting firm Cushman and Wakefield, rentals in the country’s high streets have gone up considerably – by as much as 15 per cent in some of the markets.

This appears to be driving a trend among luxury brands in India, with many switching to home delivery services for their high-end clients, in some cases even arranging personal fashion shows for their select few. Brands such as Gucci, Jean Paul Gaultier, Jimmy Choo are going out of their way to send a range of items for display at the client’s home.

Such a service may suit Lambda personality types who seek freedom in where and how they shop, but for Thetas who prefer context and consensus, the service may not be so appealing given it lacks engagement with like-minded shoppers and the all encompassing brand experience usually achieved through visiting a store.

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Social media for luxury brands

Isaac Mostovicz writes that luxury brands will continue to explore the potential of social media in 2011...

The efforts of mid-range brands to reach consumers through social media channels are well documented. However, social media’s association with inclusivity means that ‘exclusive’ luxury brands have been slow to explore its uses, but this looks set to change.

2010 saw the luxury market experience a digital tipping point. Many brands launched e-commerce sites, some experimented with Facebook and Twitter personalities (e.g. Burberry, Gucci), while a few went even further; streaming live runway shows at New York Fashion Week and enabling consumers to interact in real time, is just one example.

The fashion industry in particularly has been quick to recognize the potential of such interaction, and has driven the emergence of ‘crowd sourcing’. This allows an engaged consumer base to determine which products should be manufactured – the ultimate empowerment of the consumer.

My prediction is that luxury brands will this year look at how to capitalize further on the instant consumer connection that social media can facilitate. However, a recent report from Gartner revealed that 70% percent of social media campaigns will actually fail in 2011, highlight

ing that brands must carefully consider their strategy before executing a campaign.

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