High-end brands of all kinds depend more than ever before on retaining a relatively small number of high-value customers. So why are they so uncomfortable asking those customers for feedback?

Last week’s vacation in Madrid was a real balancing act between dropping in on the best and brightest luxury retailers to see what’s cooking while simultaneously not allowing Mrs. Israel to make them vastly more successful than they already are. Despite a little stress in that department, I had a great time watching pros like Loewe, Hermès, and Prada, as well as an exciting number of luxury brands which were new names to me.

All this luxury brought to mind a subject we’ve looked at for some time now – the riddle of why that group of retailers which is most dependent on building long-term customer relationships stumbles so badly when it comes to soliciting feedback.

Why It’s More Important in Luxury. Think about luxury brands as compared to Main Street brands. Luxury brands’ customer lists are comprised of a smaller number of customers, each of whom represents a higher lifetime customer value. Losing one of these customers due to an unfavorable experience with product or the buying experience is a very damaging proposition.

In fact, many of these customers are what researchers call “aspirational” buyers. An economic up-and-comer might spend 1 or 2% of her pay for the year on a single piece, simply because of the way it makes her feel. This can start a long-term relationship with the brand, which will grow as her own economic situation prospers. If that early store experience leaves her feeling otherwise, however, that lifetime of brand loyalty can be irreparably damaged. (For more on this, see our post on The Value of One Lost Customer.)

Why Can’t They Ask? So why don’t you typically see luxury retail brands asking for customer feedback? We see two main reasons.

First, one of the cardinal rules of positioning your brand at the top of the luxury pile is that everything about you needs to resonate and reaffirm that you are already the best. Even a tacit acknowledgement that there could be room to improve can run counter to that message.

Second, consumers everywhere first got comfortable with the notion of using the web and technology in general to give feedback on Main Street. This means that the most effective ways to gather and share feedback can have – if we’re being honest – a somewhat pedestrian feel. I think we can all understand why a company like Nordstrom might hesitate before pulling a page out of a company like Target’s playbook, regardless of how effective it is for Target.

And that’s a problem, because luxury customers – like everyone else – are embracing technology to share their thoughts about these brands with everyone else in the world through social media sites of all kinds.

Not doing so themselves simply makes a luxury retailer the last one to get the news when something's going very right or very wrong in the field, which is an expensive mistake.

How can they make the leap? The economy has experienced more than a hiccup – it’s experienced a sea change which has altered the way consumers think about how they spend their money for a long time to come.

As luxury brands reconfigure themselves to survive and – in some cases – prosper, a vital element will be learning to find ways to measure their customer experience in ways which are congruent with their larger brand experience.

The good news is that this can be done very effectively using tools and skills already on hand in luxury brands everywhere. Next week we’ll distill our thoughts on how to do this into the three most important Luxury Retailers’ Rules for Feedback.

Until then, have a happy and safe New Year’s!

Views: 13

Comment

You need to be a member of FohBoh to add comments!

Join FohBoh

Comment by Meghan Reed on December 31, 2009 at 10:45am
Great post! Can't wait to read Luxury Retailers’ Rules for Feedback.

Advertisments

 

DEPARTMENTS

Social Wine Club for Craft Wineries

Smartbrief

Kids LiveWell atwitter over Twitter party

In its continuing effort to promote more nutritious and flavorful children's menu options, the NRA will hold a Twitter party  -More

Starbucks could become top on-premise wine seller in U.S.

Starbucks is planning to slowly expand its evening sales of wine, beer and small plates to thousands of selected stores throu -More

The evolving nature of snacks

Snacks have shifted from an after-school treat to a meal alternative as meal times become more fragmented.  -More

JOBS & CAREERS

Posting a job or finding a job starts here at FohBoh. Call us about special $25 posting packages to syndicate across all major jobs boards.

National News

Wahlburgers Announces Expansion Plans Including Franchise Agreement in Philadelphia

Wahlburgers has signed a franchise agreement with Hingham Associates, LLC that will bring five Wahlburgers to the metropolitan Philadelphia area over the next several years. The franchise group is actively looking at sites and is targeting a late 2014-early 2015 opening for its first restaurant.

Chipotle Mexican Grill, Inc. First Quarter 2014 Revenue Up 24.4%

Comparable restaurant sales increased 13.4% - Restaurant level operating margin was 25.9%, a decrease of 40 basis points

Jamba Juice Announces Grand Opening of New St. Louis, MO Location

Jamba Juice Company announced the brand’s continued expansion in the St. Louis market with the opening of a Jamba Juice® store at 11477 Olive Blvd. on April 16, 2014.

Expert in Real Estate Analytics Joins Luna Grill

Luna Grill, the San Diego-based Mediterranean restaurant chain, is welcoming retail real estate industry veteran Greg Thorburn to its leadership team. Thorburn has been brought on board to fill the newly created position of Vice-President of Real Estate.

Rita's Italian Ice Awards Area Development Agreement for Kansas

Rita's Italian Ice has awarded franchise and area development agreements for Kansas and the Kansas City area, which extends to the Missouri side of the city, to franchisees and local residents Jay Miller, Jeff Miller and Pat Reilly.

CROWD FUNDING

If you are looking for capital to start or grow your restaurant, create the next 501c3, develop and launch the next app for the restaurant industry,or want to help your peers in some meaningful way, we want to know about it.

TED TALKS VIDEO

TED: Matthew Carter: My life in typefaces - Matthew Carter (2014)

Pick up a book, magazine or screen, and more than likely you'll come across some typography designed by Matthew Carter. In this charming talk, the man behind typefaces such as Verdana, Georgia and Bell Centennial (designed just for phone books -- remember them?), takes us on a spin through a career focused on the very last pixel of each letter of a font.

TED: Jeremy Kasdin: The flower-shaped starshade that might help us detect Earth-like planets - Jeremy Kasdin (2014)

Astronomers believe that every star in the galaxy has a planet, one fifth of which might harbor life. Only we haven't seen any of them -- yet. Jeremy Kasdin and his team are looking to change that with the design and engineering of an extraordinary piece of equipment: a flower petal-shaped "starshade" that allows a telescope to photograph planets from 50,000 kilometers away. It is, he says, the "coolest possible science."

TED: Norman Spack: How I help transgender teens become who they want to be - Norman Spack (2013)

Puberty is an awkward time for just about everybody, but for transgender teens it can be a nightmare, as they grow overnight into bodies they aren't comfortable with. In a heartfelt talk, endocrinologist Norman Spack tells a personal story of how he became one of the few doctors in the US to treat minors with hormone replacement therapy. By staving off the effects of puberty, Spack gives trans teens the time they need. (Filmed at TEDxBeaconStreet.)

TED: Jennifer Senior: For parents, happiness is a very high bar - Jennifer Senior (2014)

The parenting section of the bookstore is overwhelming—it's "a giant, candy-colored monument to our collective panic," as writer Jennifer Senior puts it. Why is parenthood filled with so much anxiety? Because the goal of modern, middle-class parents—to raise happy children—is so elusive. In this honest talk, she offers some kinder and more achievable aims.

© 2014   Created by FohBoh.

Badges  |  Report an Issue  |  Terms of Service