Luxury brands & affluent customers need more value
For those brands targeting the affluent luxury consumer, the essence of 'lifestyle branding' - being relevant to the lifestyle and needs of your target audience - is to align your brand's values with what the customer values most, according to Pam Danziger or Unity Marketing.
Value for money is what everyone wants, but very few brands seem to understand exactly how to deliver it. Does this mean a lower price tag, or higher quality products? Or does it mean better customer service, more involvement in social media, or new loyalty programme rewards? The problem, of course, is that the answers depend on the business, the brand, the value proposition, and the target audience.
However, according to Danziger, a good place to start is with a deeper understanding of your customers and what they value the most. Today's consumers will be loyal to the brands that speak to their unique lifestyle. What do they hold dear? What is truly important to them? Marketers must put in the effort to find out this information about the target customers, then bring the answers back and plug them into the company, the brand, its marketing communications, its web site and its social media strategy.
Unity Marketing's trend report, entitled 'Luxury Consumers and What They Value Most', calls this approach 'lifestyle branding'. Today, it is no longer enough to know simply the age, gender, and income of your customers (their demographics) and target those segments in general. Instead, marketers must understand their customers' values and priorities in order to understand their unique psychology (in other words, knowing why people buy from you). Then, you must use these insights about consumer values and build up a deeper connection through marketing and branding messages.
Senior lecturer Paurav Shukla at the UK's Brighton Business School puts it like this: "Managers will have to change their core message and value proposition to reflect the market conditions and consumer motivations. The question which managers need to ask is what is the value proposition in the present circumstances most of my customers are looking for and how can I develop and convey a message which reflects consumers' reality rather than the brand's own reality."
In Unity Marketing's 'Q3 2010 Luxury Consumer Tracking Study', the company asked 1,364 affluent (with annual household income averaging US$298,300) luxury consumers (i.e. those who bought one or more of the 22 luxury goods and services included in the tracking study) about what they value most in their lives and in their lifestyle. After examining many factors, the company prioritised affluent consumers' lifestyle values within the context of an established research structure adapted from the Kahle List of Values (LOV) scale that includes:
- Warm relationships with others;
- Fun & enjoyment of life;
- Financial security;
- Being well-respected;
- Sense of belonging;
- Having enough money to buy nice things.
The report's conclusion is that, in establishing and communicating values that align with consumers' own personal values, marketers have to earn customers' trust and respect. Danziger concluded: "In order to build a true connection with the customer, not just a transaction, marketers need to take a 360-degree lifestyle approach, and understand the many different dimensions, values and priorities of their customers, then use that understanding as a platform to build a long term lasting brand connection with them."