Theta-Lambda

Post-purchase is where luxury marketers must place the emphasis in the buying cycle

Isaac Mostovicz writes that luxury brands must connect with their customers post-purchase ...

An interesting article on Luxury Daily has revealed some research from Condé Nast Ideactive, the research arm of the publishers, which showed that luxury brands must improve their marketing efforts to high net worth customers past the point of sale.

 

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The research shows that unsurprisingly, most brands focus all their attention on customer attraction but when it comes to retention, they could be missing out on the chance to turn brand loyalists into brand advocates. Condé Nast Ideactive examined consumers’ emotions at each stage of the sales journey and what marketing devices are used to satisfy their needs at each point.

 

Previous posts on this blog have discussed the importance of marketers connecting the luxury purchase process with emotions and making customers feel special, singled out, or important.

 

Pat Connolly, head of strategy for Condé Nast Ideactive, New York echoes this idea.

 

He comments: “Brands need to invest in emotion, and these gaps where people are very emotional [explore and post-purchase] is an opportunity for brands to invest in things like content and experience,” he said.

 

“Doing this post-purchase will create advocates and content-creators that deliver on the first gap [the explore stage].”

 

Post-purchase, the research has found that consumers, especially the youth market, need almost immediate validation from friends and family post-purchase – often carried out through mobile or social media.

 

Within Janusian thinking, this is a particularly Thetan trait – as Thetas seek belonging through bonding or affiliating with their peers. Thetas aim to fit in or contextualize themselves within their desired group and use socially derived understandings of product characteristics as a basis for their consumption.

 

However, the idea of a personal gift or something that singles out the buyer post-purchase is something that will particularly appeal to Lambdas. Lambdas seek distinction as an ultimate end goal – so a personal touch from a luxury brand that helps them stand out will satisfy their desire for uniqueness.

 

Clearly, brands should take advantage of this part of the buying cycle and view the post-purchase experience as an opportunity to reach out to their consumers.

 

 

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Hermès to examine provenance through exhibition in London

Isaac Mostovicz writes that Hermes is choosing to focus on the quality of its products for its latest campaign ...

Luxury Daily reports that Hermès, the French fashion retailer, is to demonstrate the craftsmanship and history behind its brand through a new exhibition in London opening later this year.

Hermès official image for Leather Forever exhibit

The Hermès Leather Forever exhibit will demonstrate the antiquity and provenance of the brand, founded 175 years ago this year, and is the latest step in terms of demonstrating to affluent customers that its price points are reflective of the quality of its product.

 

Hermès has initiated several campaigns of late around its provenance. It has created a microsite called Hearts and Crafts that examines the detailed craftsmanship and quality of its products through biographies and interviews with the craftsmen, from the leather-cutters to the silk-drawers.

 

The site also hosts a documentary, which tells the story of the many people who contribute towards the creation and manufacture of Hermès products.

 

Of late, even high net worth customers who may not be directly affected by the economic downturn question the quality behind some of the prices charged for luxury goods – so this campaign aims to reassure and establish Hermès as one of the ultimate quality brands.

 

Chris Ramey, president of Affluent Insights, Miami commented: “Authenticity is one of the platforms for luxury. Hermès will continue to emphasize their craftsmanship, history and quality because it’s part of their DNA.”

 

Within Janusian thinking, this campaign will appeal to those of a Lambda mindset – who see an item’s value not in terms of price, but in terms of the time invested.

 

 

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The classic rules of “exclusivity, rarity and scarcity” must be adaptable

Isaac Mostovicz writes that one size may not fit all when it comes to luxury marketing ...

A recent article in Marketing Week describes how the luxury goods sector, as one of the few within general retail that has endured the muted financial environment, is marketing itself to its customers. Brands such as LVMH continue to post excellent profits and consider their outlook for 2012 as “excellent” whilst ordinary high street retailers struggle.

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As a result, more and more brands are reaching upwards to try and appeal to these high net worth consumers. But some marketers claim that there’s no secret formula to attracting the attention of luxury purchasers – and that tried and tested is the best way forward.

 

Peter Cross, business partner of Mary Portas at the retail branding agency Yellow Door comments that while luxury purchasers are now more open to value purchases and more discerning of what they actually buy, traditional luxury marketing is still very much at the fore.

 

True luxury is still based on exclusivity, rarity and scarcity,” he says.

 

By making their most valuable customers feel special and singled out – for example, through special “gifts” that may not be available to other consumers – marketers are able to generate emotions of goodwill, rarity and exclusivity – as well as word of mouth from their customers.

 

Looking at this from the point of view of Janusian thinking, it could be argued that this classic “exclusivity, rarity and scarcity” tactic will affect one type of Janusian personality differently to another.

 

Lambdas, who seek achievement and uniqueness as an ultimate end goal, are likely to be very influenced by an individual, personalised gift or product as this will help them to stand out against the crowd – a key goal for Lambdas. Thetas, on the other hand, who generally seek acceptance into their social crowd, may find this technique attractive as it will help to establish themselves within their specific social class.

 

Within luxury marketing, one size does not fit all and marketers must remember that overarching “rules” may not suit every brand when considering a tailored strategy.

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The Psychology of Consumption and the Birth of Modern Marketing

Isaac Mostovicz writes that that our subconscious psychological impulses may affect our buying habits more than we believe, according to Ernest Dichter...

A recent article in the Economist describes how Ernest Dichter, “the Freud of the supermarket age,” transformed marketing in the USA through his behavioural research and ground-breaking ideas around the role of the unconscious in sales.

 

Dichter was convinced that traditional analysis of consumers (at the time carried out through speculative and somewhat slapdash polling techniques) offered very little insight into buying psychology and presented a limited view of what makes consumers opt for one product over another.

 

Rather, by advocating in-depth psychoanalytical research in lengthy interviews, Dichter gathered that subconscious urges and socialized inhibitions are what affects consumers’ buying habits. Furthermore, Dichter understood that possessions are extensions of our own personalities, serving as “a kind of mirror, which reflects our own image.”

 

I have argued previously that luxury marketers must focus on the human characteristics that drive consumers. By a simple characterization of consumers into two personality types – Theta and Lambda, I created a dichotomy that allows marketers to better understand how consumers behave according to their values, unconscious motives, and desires.

 

The Theta personality seeks affiliation and control as an ultimate life purpose, so they seek acceptance to fit in within a desired group and use socially-derived understandings of product characteristics as a basis for their consumption.

 

Lambdas, on the other hand, seek achievement and uniqueness as an ultimate end goal, and so are more likely to interpret products based on their individual responses to the product, how it helps or prevents them to stand out, and how the product benchmarks against their regular consumptive patterns.

 

Today, in addition to the empirical analysis marketers carry out through geographic location, gender and income, new research and developments based on neuroscience show that Dichter’s insights are coming back into fashion.

 

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Luxury marketing: the importance of understanding consumers

Isaac Mostovicz writes that that it is important to for luxury brands to understand their different global consumers...

I have often argued that for luxury marketers to be successful, they should apply different positioning to similar products in order to fulfill consumer’s varying expectations of how a particular product is meant to help them represent themselves and reflect their life goals.

To better understand the different ways in which consumers reflect on products, I developed the characterization of two personalities – Theta and Lambda – and argued that marketers should take both into account when planning a campaign.

That is why I was interested to read that a presentation made at the Luxury Briefing World Summit 2011 by Ledbury Research argued for the need for luxury brands to try and understand their consumers better, saying that:

“…Luxury brand marketers need to stop thinking of the affluent population as one group and try to understand the different cultural aspects, lifestyles and spending habits at play within the various levels of the world’s wealthy.” (Luxury Daily)

The presentation argues that the wealth landscape of the world is changing, and that brands need to alter their marketing campaigns and stores accordingly. For example, Asia-Pacific is starting to take a larger share of wealthy consumers, whereas the number of millionaires in Western Europe is declining.

James Lawson, the founder and director of Ledbury Research, said at the summit:

“The first thing is to think about your marketplace and avoid the trap of talking about the wealthy as one population too much… the group is large, and I encourage you to think of them as many different segments.”

This is important as there are key differences between luxury consumers in the same countries, and even more variants when we consider consumers globally.

I think that more and more we will see brands who take the time to understand their varied sets of customers – whether the differences between Theta and Lambda personalities shopping in the US, or the differences between first and second generation wealthy clients in the United Arab Emirates – reaping the rewards.

Fructuosa Almadin Luib says of this article...

“A diamond is forever.” ~ De Beers

Who can forget that catchy phrase? 😉

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Digital Media for Luxury Brands

Isaac Mostovicz writes that that digital media is an opportunity not to be missed for luxury marketers...

Recent articles with names such as ‘Harrods ups digital ante with content-to-commerce link’ and ‘Burberry continues digital domination to deepen connection with Gen Y’ are just some of those highlighting the recent trend – and increasing importance – of luxury brands embracing social and digital media as a key part of their marketing strategy.

I have written about this previously, arguing that if luxury brands are to appeal to a global consumer market, brands are going to have to bring newer technology into stores, on mobiles and to people’s homes.

This article on Business 2 Community titled “Social Media Impacts the Luxury Customer, Too” argues that the luxury consumer, as well as engaging online because of brand affinity, is also impacted directly by what transpires in the social media space.

“According to a recent survey from Unity Marketing, of those individuals classified with a high-net worth, as defined by having more than $1 million in investible assets, indicated that comments, tweets, Facebook posts and so on directly influenced what websites they visited (59%), what retail stores they patronized (56%) and also what designer brand they purchased (57%).”

Unity Marketing Luxury Tracking Study

The article concludes that luxury marketers need to be pro-active in the social media space, as the luxury consumers are out there.

For Theta personalities, who seek affiliation and to contextualise themselves within a desired group, social networks both on and off line are likely to highly influence their consumption decisions. Digital media, with its emphasis on sharing, recommending and ‘liking’, is thus not an opportunity to be missed.

[…] Dr. Isaac Moscovitz, owner of Kahro, a jewelry store in Raleigh NC, writes in his blog post on digital media for luxury brands, “Digital media, with its emphasis on sharing, recommending and ‘liking’, is not an […]

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Luxury marketing with QR codes

Isaac Mostovicz writes that QR codes can be an effective tool in luxury marketing...

QR, or Quick Response, codes – a type of code which can be read through a smartphone and redirects the user to a webpage, links to text or pre-composes an email – are becoming increasingly present in luxury marketing, both in magazines and newspapers, and on billboards and posters.

As this article on Luxury Daily notes, QR codes can be an effective tool to take a print advertisement to a multi-channel campaign. They enable consumers to engage with the brand in a new way, through real-time content and creating more of a personalised experience.

This style of marketing could work particularly well for consumers with Lambda style personalities, who are likely to judge products based on their individual responses to it. For those with Lambda traits, luxury marketing that goes the extra mile to ensure a personalised service that stands out from its competitors is likely to be effective.

However, the article reminds marketers to be wary of how these codes are used – if the website the code directs to is not properly optimised for mobile phone use, for instance, then this would be a negative experience rather than an enriching one, and potentially harmful for the brand.

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New trends in luxury travel

Isaac Mostovicz writes that about the rise of luxury holidays...

China, India and Russia will account for a progressively larger percentage of worldwide luxury travellers, according to this recent article in Travel Weekly.

As younger luxury travellers tend to favour authenticity and adventure over opulence as they reject rigid sets of planned activities – something I have written about in the past as appealing to Lambda personalities – nature-oriented destinations such as New Zealand, and culturally vibrant places such as Peru will gain popularity, alongside “traditional” accommodation such as Yurts and eco-lodges.

Destinations in Europe are proving popular too, with over 40 per cent of all luxury travellers saying that their next destination would likely be in Europe, with France and Italy high on the list – destinations which would likely appeal to more traditional Theta personalities.

A report by the International Luxury Travel Market claimed that around two-thirds of luxury travellers make at least four trips a year, lasting on average ten days. Around one per cent of the world’s hotel rooms qualify as ‘luxury’, where room rates are approximately four times that of a chain like Hilton, so it is perhaps not surprising that over half of luxury travellers are between 45 and 54 years old, and earning at least $100,000 a year.

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The Luxury of Customisation

Isaac Mostovicz writes that about why luxury customers want the same thing – an individual, customised product...

British luxury brand Burberry last year launched its Burberry Bespoke service, which will allow consumers to select a made to measure trench coat, from the choice of fabric and its colour to the style of buttons and lining. Burberry has promised this will allow over 12 million variations of design – and price.

With the rise in mass production replacing craft production as the dominant form of process in the luxury goods market, the voice of the individual consumer was limited to deciding which of the products on offer they would purchase, and not what the product should be in the first place.

The Burberry Bespoke service illustrates a new turn in production referred to as “mass customisation”. This customisation seeks to restore individuality to the design process. It achieves this through involving the consumer in choices – what colour should the product be? What additional features? What design, pattern or print? – resulting in a product which is effectively made to order.

Another example of this “mass customisation” might be Louis Vuitton’s Mon Monogram service, which allows consumers to monogram the ubiquitous design with their own initials. This also applies to clothing, where an approach that is individual led may be more favourable in terms of getting the perfect fit.

I have written before about the difference in Theta and Lambda personalitites; the Theta seeking affiliation and control, and the Lambda seeking uniqueness. Lambda types are more likely to select products based on their individual responses to it, how it helps them to stand out, and how the product benchmarks against their regular consumptive patterns. Mass customisation is likely to appeal to Lambda personalities as they navigate the luxury market, with the opportunity to mark their choices as theirs and theirs alone rather than following the crowd.

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Luxury on the rebound

Isaac Mostovicz writes that that investment in luxury items are on the up again, particularly in developing markets such as China...

If we needed further proof that the world’s super-rich have rebounded from the financial crisis, we need look no further than this recent article in Reuters showing that the demand for art, watches, vintage cars and other luxury items expanded in 2010, with collectibles such as boats and jets accounting for almost a third of these investments.

Whilst taste and personality – whether they are Lambda or Theta, for example – determines what each individual will enjoy investing in, certain items such as artworks are more likely to be acquired for their potential to gain value.

The demand for diamonds has benefited from rising prices of raw materials, as they are seen as a particularly safe investment.

This demand has partly been spurred on by wealth in growing economies, particularly those in Asia (see my recent post on Chinese luxury bathrooms), which are reviving markets in ‘investment’ pieces as well as dictating the luxury goods that are manufactured in the first place. With Asia surpassing Europe in number of millionaires for the first time ever last year, it is clear that to see new luxury trends emerging we must cast our eyes East.

Luxury Homes by VAPF says of this article...

China is fast becoming the world’s top luxury good consumer, and the fact that they idolise the European way of life means that they are purchasing all things that symbolise a proximity to European citizens, including luxury homes in Spain, a favourite holiday home destination for many Europeans.

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