How luxury brands can build deeper relationships

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By: Wise Marketer Staff |

Posted on October 2, 2015

For the luxury sector, more than others, providing experiences that meet customer expectations is critical if brands are going to build loyalty and long-term relationships successfully, according to Joanne Varey, managing director for promotional marketing firm Granby Marketing Services.

With Millward Brown's 'BrandZ Top 100 Most Valuable Global Brands' recently claiming that the value of luxury brands has dropped by 6% in the past year, it has never been more important for the luxury market to get customer engagement right.

For consumers purchasing a luxury brand, there's obviously a large financial investment, but also more emotion surrounding the purchase, as they are likely to have spent longer researching and saving for the product. When buying from the brand, consumers aren't just investing in the product, but the premium experience that comes with the price tag.

The multi-channel environment means brands can now really enhance the experience they are providing, engaging the consumer at every point in the journey, making them feel part of something unique and personalised to them, which should leave them feeling positive. The multiple touchpoints also enable brands to learn more about each individual they are interacting with, paving the way for more targeting messaging and a richer experience in the future. This is an exciting prospect for those getting their marketing strategies right, but a significant challenge for those who aren't prepared.

Customer data lies at the heart of providing a desired and effective customer experience, of course, so brands must ensure they are maximising opportunities to collect the insights that will enable them to deliver a premium journey. With that in mind, what can the luxury sector do to help them create stronger relationships with the customer to drive further purchases?

The growth of digital channels has opened the door for brands to execute innovative and engaging campaigns that encourage customers to interact at a variety of touchpoints during the journey. This not only creates a wealth of opportunities for the brand to draw the customer into the experience further, but also enables them to get closer to the customer, generating more data insights. Implementing promotions that touch multiple touchpoints and encourage customers further along the purchase journey will deliver value to both brand and customer.

Of course, the promotion must fit with the overall brand and anticipated premium experience. There is no one size fits all for promotional marketing; the best results will come from an approach that's bespoke to the brand in questions and audience being targeted. Traditional promotions that provide a free gift with purchase remain effective in encouraging engagement and loyalty, but critically, won't de-value the quality of the brand. Brands are increasingly bringing digital channels into campaigns, which provides access a larger market and meets consumer expectations for innovation, providing new opportunities to engage with them, beyond the purchase.

Harrods recently ran Stiletto Wars, a mobile app-based game developed to promote its new luxury shoe department. The game was only accessed through downloading the Harrods app, but in return for doing so, users were in with a chance of winning gift cards and VIP shopping experience. The luxury retailer successfully built awareness around a new in-store offering, found an effective way to reach younger female customers, drove up app downloads and gathered valuable customer data, which could then be used to deliver relevant communications in the future.

For many customers, in-store remains core to the luxury brand experience - and the reason many customers still choose to visit the stores rather than purchase online. It's here where customer service must be at its peak, so that people leave intending to return again in the future. Once customers are inside, brands have the chance to physically collect the all-important data insights that will inform their customer communications to that individual in the future. If brands can build digital in store it enhances the overall experience and provides an effective bridge between on and offline. Arming sales assistants with iPads, for example, can provide efficient customer service, helping customers find and purchase items that may not be in-store, enable them to browse related products or sign the up to an exclusive newsletter that will enable them access to premium promotions and events, based on their preferences.

If a consumer has shared their data, it's critical that their individual needs aren't ignored by the brand in the future. Why invest in creating opportunities to unlock these preferences in the first place if they don't intend to use them? Brands need to ensure they have all the customer data available to continue engaging the customer effectively beyond the purchase.

This doesn't mean bombarding them with promotional offers or messages on a daily basis. For the luxury market in particular, brands must be focused on the quality of their offers rather than quantity. Consumers aren't going to be buying a new car, coffee machine or handbag every month, so targeting them with offers for these straight after a purchase will fail to have an impact and indicate that they don't know the individual or their purchase history.

Instead, brands should use these data insights to send offers related to their recent purchases. Whether that's a voucher for free coffee pods or an invitation to attend a VIP coffee tasting event to launch a new range. These types of offers are relevant to the brand, but more importantly reassure the customer they are part of an experience and are recognised as a valued consumer.

"New customer channels have presented the luxury market with new ways to get even closer to their customers and deliver the premium and positive experience they expect," concluded Varey. "Those brands that recognise how to unlock their customers' preferences and invest in marketing campaigns that enable them to do so will be rewarded with deeper relationships that see customer returning again and again."

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