This year, let’s skip the tricks and go straight for the treats.
Contact us today to see how we can help you find your next best prospect.
This year, let’s skip the tricks and go straight for the treats.
Contact us today to see how we can help you find your next best prospect.
Over the past few years, marketing has experienced a shift. As businesses moved into digital channels, and with the emergence of social media platforms, they were given the opportunity to communicate with customers on an individual level. Although personalized marketing has allowed businesses to understand their customers individually, how ethical is it for businesses to use affinity data to learn more about their consumers?
Momentum always follows money and motivation. In 2017, over $15B had been invested in AI-focused startups. As of this year, that amount has been surpassed and is forecasted to be over $58B by 2021. Industry analysts believe AI-enabled businesses will create over $2.1T worth of business value and generate over 2.3M new jobs while eliminating 1.8M existing jobs. Technology has always been the core of our economic growth, where disruption and business value are constantly created and recreated in a virtuous cycle.
Creating business value is defined by new revenue, new markets, new customer experiences, and cost reductions. Although the needs of the consumer are the main focus, their personal values seem to fade into the back as companies digitally transform. How do we unlock business value that also serves the beliefs of the greater good? Creating this balance can be challenging.
AI-enabled experience economies, for example, face this challenge. However, these technologies come with self-learning techniques, so they are able to seamlessly gather and sift through information on individuals and their interests. Although this data provides businesses with the ability to understand and persuade consumers on a personal level, without human judgment and intervention things can go awry. We will need a moral and ethical playbook for the practice of personalization.
Data is our frenemy. It’s our fuel. It’s also the basis of the Information Age.
Consider Facebook, Google, and WhatsApp’s business models. We don’t value them simply because they’re free. We value them because they adapt to our needs and values. These platforms allow us to connect with our external environment by adapting to our behaviors, and subsequently suggesting where we should go, who we should meet, and what we should do all day, every day.. It is free because businesses realize, in the long run, that having and subsequently monetizing your data is much more valuable than having you pay for their services.
Although these platforms make daily life easier, we are collectively subsidizing our personal data for access to free browsers, searches, ratings, and reviews. Digital social platforms, in some cases, have been able to manipulate this data to influence our way of thinking and being instead of serving us what we have consented to. This helps businesses understand your values and provide you with items that may be of high value to you. Data, in that sense, helps businesses and users cut through the digital noise, and provides us with an experience that feels more gratifying and focused. Instead of having to enter our information constantly, or searching for related items, we are given recommendations that are just a click away.
Well, Data is still your frenemy. But, so is Personalization.
So that begs a few questions: Where are our ethical boundaries in our data usage? What are the gray areas? Who gets to store, share, secure, and govern our data? Who decides? It is our responsibility to be vigilant and to remain aware of how and where our data is being used.
Ethics isn’t a pile of red tape that we have to maneuver around in order to forge connections. Ethics is the system upon which our businesses and technological systems should be designed-in.
In the conquest for privacy, personalization takes a hit.
In the quest for personalization, individual freedoms take a hit.
So what does ethical marketing look like? That will be the focus of our series on ethical marketing and personalization. Why? Because it’s personal.
Ever wonder how to retain your luxury customer? Today’s customer can jump from a retail environment to a digital one within a given day. How do you ensure that you engage them on every channel?
Omnichannel marketing strategies in luxury marketing offer a distinct way of interacting with your customers. It’s more personalized and dynamic.
Omnichannel marketing can be defined as a multichannel sales approach that provides your customers with a fully integrated shopping experience. They may be shopping online from a desktop or mobile device, by phone, or in a brick-and-mortar store. Omnichannel marketing strategies for luxury brands utilize all of those channels, but in a way, that best fits your customers’ needs.
The goal is to give your customers a seamless experience from channel to channel.
How do your customers like to shop for your product or service? What is the process they usually follow before they decide to buy from you? Do they use a desktop computer? A smartphone? A tablet? Or do they go to an actual, physical location? And how many times during the day do they switch between those devices?
Here are the more typical channels used in omnichannel strategies in luxury marketing:
Omnichannel luxury marketing reaches your customers in the way they prefer to interact with your business. They may use one channel or switch between them throughout the day. But you need to give them those choices.
While omnichannel marketing uses multiple channels, multichannel marketing may not be omnichannel.
“Most businesses invest in multichannel marketing,” writes Aaron Agius in a HubSpot article. “They have a website, blog, Facebook, and also Twitter. While they use each of these platforms to engage and connect with customers, in most cases, the customer still lacks a seamless experience and consistent messaging across each of these channels. You can have amazing mobile marketing, engaging social media campaigns, and a well-designed website. But if they don’t work together, it’s not omnichannel luxury marketing.”
Omnichannel marketing uses the same channels, but in a way, that best fits your customer’s personal needs. Is your customer planning on visiting your physical store? Shopping on your website? Calling and ordering by phone? Interacting through a mobile app? Omnichannel luxury marketing is done in a way that creates an integrated and cohesive customer experience, regardless of which channel a customer chooses.
In the past, a retailer might provide a desktop experience, a mobile experience, and also a tablet experience. Now they must create an omnichannel experience that customers can use whenever they want.
The more channels you utilize for marketing, the more likely it is your customers will find you. So having multiple channels does improve your marketing efforts. However, multichannel marketing alone does not ensure people are actually going to do business with you. It only gives you access to a bigger audience.
Omnichannel marketing can also help you get the most out of every channel. Omnichannel luxury marketing is a move towards more personalized communication with your consumers. This includes determining the best channels of communication to reach them.
Regardless of strategy, good marketing programs begin with sound data. You start by targeting the people who fit your customer profile. Those are the buyers with a much higher potential or propensity to purchase your product or service.
“Through data science and our database, we identify the group of individuals that we want to go after.“ said Patrick Bischoff, president of the Commercial Markets Group at WealthEngine. “At WealthEngine, we believe that our clients are best served by building a ‘cocoon of information’ around an identified individual. We provide this information cocoon for them.”
When you’re trying to reach wealthy customers, you need to know what resonates with them.
“Obviously, we’re exposed to many, many forms of media these days,” said Bischoff. “It’s not simply the one-page ad in the luxury magazine or the TV ad for a certain brand. An omnichannel strategy can start with a direct mail message.
“At the same time, you already know the individual’s email address. Somebody who receives a direct mail piece then receives emails at a particular cadence. You’re trying to stay at the forefront of an individual throughout the whole process.”
That’s why it’s important that each part of your consumer’s experience is consistent. An item placed in a shopping cart through a mobile device should still be there when your customer accesses the cart on their desktop computer.
Luxury marketers should also have a strategy for a cohesive experience across all appropriate platforms to reach their target customers. Such a strategy will give your customers the feeling of that all-important “personalized service.” Also, companies that successfully implement omnichannel luxury marketing have an advantage over their competitors.
These interesting statistics regarding omnichannel marketing results were cited in a GetCRM article:
90% of customers expect consistent interaction across various channels.
87% of customers think brands need to put more effort into providing a seamless buying experience.
Businesses utilizing omnichannel marketing strategies achieve 91% greater year-over-year customer retention rates than businesses that don’t.
Companies with extremely strong omnichannel customer engagement see a 9.5% year-over-year increase in annual revenue and a 7.5% year-over-year decrease in cost per contact.
Yet omnichannel luxury marketing encompasses more than simply providing seamless, multiple channels of customer contact. You have to offer your customer quality contact with your business. Your customer service must be up to par, whether by phone or through an online chat. Otherwise, a new, interactive website or colorful brochure won’t have much value.
All channels of a luxury marketing strategy must work together to provide today’s luxury consumer with their ideal buying experience.
WealthEngine data can help you determine how to best reach your target luxury consumer. Fill the form on the right and a rep will contact you very soon.
Why do consumers consider one brand to be a “luxury” brand and another brand not? Exclusivity? Performance? Quality? Innovation? Heritage? For the most part, those all have been defining characteristics of a luxury brand, and they still are. However, there’s been a shakeup underway. The traits that carry the most weight with consumers in today’s luxury market have changed.
“The definition of ‘luxury’ is undergoing a paradigm shift in the consumer market,” said marketing expert Pamela Danziger. Unity Marketing and Luxury Daily recently surveyed over 600 luxury retailers and marketers. They found that the definition of luxury is the “number one disrupter of the luxury business.”
What does this mean for a luxury marketing strategy? If you know how consumers think of luxury and what drives their purchases, it can help you determine the best strategy to attract wealthy clients. You can also reduce the cost of acquisition.
Ask any Apple buyer how well they like their Mac or iPhone. They’ll undoubtedly tell you they believe Apple products are far superior to any competitor. It doesn’t even matter if competitive products offer better features. Apple may got its start by launching a unique computer product to compete against Microsoft. But Apple’s following has grown far beyond disgruntled PC users. There may be a certain “status” to owning an Apple product. However, the company built its brand on a reputation of quality and performance.
Now consumers are defining luxury differently. Just a few years ago, quality took over as the leading characteristic of luxury. Data from a recent major report confirms that quality, not exclusivity, is now the key definer of luxury for consumers globally. According to Albatross Global Solutions and Numberly’s fourth annual “The Journey of a Luxury Consumer” report, 85% of luxury consumers say quality is the most important characteristic.
“What separates true luxury from the idea of luxury is quality,” says Javier Calvar, chief operating officer at market research firm Albatross Global Solutions.
A change in the demographics of today’s luxury consumer is behind the shift in what defines luxury. Traditionally, the luxury market has been made up of older consumers, many with inherited wealth. Baby boomers and those older still make up 60% of the total global luxury market. But the other 40% is made up of Generation X and millennials. So younger consumers are representing an increasingly significant portion of the luxury business.
Younger people, with newfound wealth, are not only moving into the luxury market, they’re redefining it.
“When money goes into the hands of people that didn’t have much of it before, the relationship those individuals have with luxury brands is very different from those who have been exposed to luxury brands for a long time,” said Calvar. “A really large percentage of our top-end product customers are between the age of 30 and 50. It’s no longer a retirement plan to buy yourself a yacht to enjoy in your golden years. ”
Millennials in particular are a luxury marketing segment growing in importance and wealth. They see exclusivity as less important. Instead, they prefer to “belong,” and have little interest in something that separates them from their peers.
How can you connect with this new luxury market customer? Identify the specifics of your target customer’s profile. Once you know about their likes, dislikes, and best methods of contact, you can build a more effective luxury marketing strategy.
So it’s more than demographic data, it’s about understanding your customer’s mindset, whether your luxury customer is 35 or 65. Appealing to a baby boomer is different than connecting with a millennial, though both may have interest in the same product. Knowing the buying motivations of each allows you to tailor your message to that niche segment.
“Quality always will be essential to luxury, said Lyle Maltz, a director with Kantar Vermeer, WPP’s global marketing consultancy. “But now emotional value and a strong, personalized relationship with consumers are of great importance in luxury marketing.”
Today’s luxury marketing is “highly personalized marketing. It has a very specific and defined message that resonates with an individual’s affinities, interest, and wealth capacity,” agrees WealthEngine’s Patrick Bischoff, president of the Commercial Markets Group at WealthEngine. You need to build that one-on-one relationship with your customer to make them feel they are being treated as an individual.
The new luxury market consumer will define what makes a brand a luxury brand, not the other way around. Today it’s less about marketers and more about consumers. That can make it more challenging for luxury marketing strategy, as the definition of “luxury brand” continues to shift. Still, to truly prosper in the luxury arena, luxury marketers will need to follow the lead of their target luxury consumer.
“The change in how consumers define luxury and the new path to purchase is dramatically redefining the marketing strategy,” said an unnamed marketing industry insider in a Forbes article. “Luxury brands must be very agile and innovative in order to gain the favors of the new luxury consumer.”
Giorgio Armani is a brand known globally for its high-end designer men’s clothing. It began by targeting the ultra high-end professionals who desired a high quality product. Since then, Armani has gradually expanded its brand scope with products aimed at broader customer segments. Armani launched a line of jeans in the U.S. market for fashion seeking, price-sensitive youths in urban metro areas. It’s an example of a luxury brand creating sub-brands to capitalize on and cater to a different customer segment.
As stated in a WARC article, “The traditional luxury model has been challenged further with the rise of digital platforms, social mobility, the emergence of ‘affordable luxury,’ and the particular preferences of millennial shoppers.”
With more younger luxury buyers who grew up in a digital world, you must also change your luxury marketing strategy. Part of building a luxury brand involves communicating with customers in the way they prefer. Years ago, that may have been print ads, direct mail, or TV commercials. Today it’s more likely to include special videos, social media, apps, and other digital means that provide a “total customer experience.”
Everyone is looking for new customers for luxury marketing. What you may not realize is that a great source of new business is your existing customer database. Here’s how you can mine it to lower your customer acquisition cost.
The key to reducing your customer acquisition cost lies in how closely your past customers match your current target luxury marketing customer profile. The better the match, the more likely you’ll attract wealthy clients and have repeat customers. Correctly mining your current customer list can provide an abundance of prospects for your latest products or services.
“There is this philosophy that everybody is driving after net new customers,” said Patrick Bischoff, president of the Commercial Markets Group at WealthEngine. “Certainly, we want to grow our business and want to increase net new customers. Yet we at WealthEngine, together with our clients and some of the premier consultancies, have recently conducted studies. The first step in proper luxury marketing is to go back to your existing database.
Not only is it less expensive for a business to retain past customers, it’s also more profitable. A Bain & Company study found that just a 5% increase in customer retention can increase a company’s profitability by 7%. Also, the average amount spent by a repeat customer was two-thirds more than a new customer.
According to a MarketingProfs.com article, getting your past customers to buy from you again can also result in more ongoing revenue. If you can convince your customer to make a second purchase, that customer is more than twice as likely to buy a third time. And that customer is more likely to buy even a fourth time! “If you’re able to make even a small increase in your conversion rate for second-time purchases, you’ll see serious revenue growth.”
So honing in with the right targeted marketing for your one-time buyers will increase the amount of second-time purchases. And once you’ve gotten them to make that second buy, it’s often only a matter of time before they make their next purchase. You’ll also reduce the customer acquisition cost.
Customers who happily made a purchase from you are more likely to buy again. Of course, you can start with purchase data to help determine what else they may buy from you. But purchase history alone may not be a good indicator of future luxury purchases.
Say you bought something at a fashion retail store. You’ll be in that retailer’s customer database. They may have your email address. They may have your name. But they have no idea what your potential is to buy more in the future.
“What is the capacity of the individual to spend with me, who I have already in my database? Most of our clients don’t know,” states Bischoff.
Previous spending is a key component of luxury marketing, but it should not be the only data point you’re using. Not all existing high net worth customers will have the abilty or capacity to spend more with you. So, identifying those who do is essential to enhancing your revenue and driving a higher customer lifetime value.
Data beyond income or net worth will be valuable in determining your luxury marketing focus. Besides wealth, there are plenty of other data points to consider.
“We advise our customers to take their database and append it with our Wealth Engine information,” explains Bischoff. ”Appending means we match their records with ours. We have a database of 240 million individuals in the U.S., covering about 85% to 95% of the adult population. We match these individuals with our data and our system. Then we can add to the information that our clients have.”
One person may have a net worth of $5 million. Another person’s net worth is over $500 million. Plus there are up to 1,200 different data points on likes, affinities, donations, causes they support, etc. All this WealthEngine information is reported back to our clients. That allows them to start pinpointing their luxury marketing efforts toward people they already know. They already know to contact these people because a lot of them gave contact information in a prior buying session. That is the starting point.
Once you understand all of these things about your existing database, you can then start to make use of other resources. Those include AI, machine learning, and any kind of predictive modeling to score that database. By scoring, you can determine the best of the best luxury marketing prospects.
Should your database be segmented or categorized? Should you not market to the entire database, only two segments of it for certain products or services? The real trick is that score, which is a very unique feature of WealthEngine.
Getting specific about who you’ll be marketing to can make your work much more efficient. “It is imperative for brands, both luxury and non-luxury, to prioritize and segment their customer base. Then they can identify who they should focus their time and budget on in their marketing campaigns.”
In addition to pulling your best repeat prospects from your own list, you can apply that modeling score to new prospects. The WealthEngine database is full of individuals with whom you have not had any previous interaction. Combining your data with WealthEngine data will model those potential luxury market buyers so that you can reduce your customer acquisition cost. Luxury marketing is not just about previous buying habits, but identifying others who are most like you past buyers. They are prospects who have the tendency to make purchases and have wealth to do so.
In that case, WealthEngine will give you the most “lookalikes” to your best customers. Those are people you know as your best customers based on how well they fit your target profile. Then, you will actually be marketing to the people who look most like those who already have some relationship with you. That will definitely reduce your customer acquisition cost.
“Comprehensive and informative data is a prerequisite to everything marketing today. It’s the foundation. You need to know something about an individual before you can customize your engagement strategies.”
Find out more about how WealthEngine data can help you reach more of your luxury marketing customers.
Luxury lifestyle marketing has changed. No longer can you simply market an image of your brand and how it will make the lifestyle consumer feel. Today’s luxury buyers purchase items that act as an extension of their values and identity. Here’s how to appeal to them.
Luxury lifestyle marketing is the process of high-end brands forming a relationship with a targeted group on the basis of their shared values and interests. High-end brands use their products as a means of communicating and forging deep emotional connections with their consumers.
Each brand has an identity. For example, Jeep’s identity is the “adventurer”. Adidas’ identity is “athletic”. Each brand has an identity that’s connected to a specific set of attitudes, values, and interests. Consumers, then, want to engage with brands that have a similar identity to theirs. So, when a brand with a particular set of values appeals to a consumer with a similar set of values, that process of influence is an example of luxury brand marketing.
No lifestyle consumer is the same. Think about your circle of friends: do all of you hold the same interests? Do you all hold the same values? Today’s lifestyle consumers engage with brands that allow them, or give them the tools, to connect with their ideal selves. In that sense, not every luxury brand will appeal to every lifestyle consumer. That is why it is important to find and forge relationships with consumers whose ideals align with your own, and vice-versa.
In general, lifestyle consumers don’t want to be “sold” anything. They want to resonate with high-end brands on an emotional level, and feel that they’re part of a community that they support, and that supports them.
In order to appeal to the lifestyle consumer, you have to ask yourself two questions:
What values do we want to promote?
What type of emotional connection do we want to have with our consumers?
By determining what type of relationship you want to have with your consumer, you’re better able to cater to their evolving needs.
Your consumers’ needs and values is the foundation. So, what can we lay on top of this foundation to create something sustainable and influential? Here are the 3 keys to building a successful lifestyle brand:
Adidas’ identity is athletic. All Saints’ identity is edgy. What’s yours? Being able to clarify your identity allows you to narrow your focus, and understand what kinds of customers you’ll be forming deeper connections with. In luxury lifestyle marketing, knowing your identity helps you identify the values and products your customers will feel most connected to. By determining your identity as a lifestyle brand, you’ve just opened the door to all the necessary information you’ll need, not only to become successful, but to become influential!
If you want to forge emotional connections with potential and existing consumers, you need to know who you’re talking to. You may have people walking through your door with differing needs, yet all of them likely share similar values. It is important to create targeted messaging using hyper-personalization so that you focus on their interests. Each consumer is an influencer. You want to articulate that you hear and see them—and that you are not simply trying to sell them your product.
It’s also important to show them that you’re receptive to their perspectives and ideals. The way they are, and who they are, is of value to you, and you want to cater to that. You can also forge these emotional connections by creating novel experiences for your consumers. When your offerings and your overall branding is striking, the experiences that you’re offering to your existing and potential consumers, will stay with the people who believe in your values.
Correct data tells a story about an individual. Instead of trusting that each of your consumers will find what they need from you, you have to get to know more about them. When you look at the wealth, age, behaviors, and demographics of individual customers, you are better able to anticipate their needs based on their values. We can then identify their propensity to stay with our brand, and understand what they may want to see or purchase in the future that we could create. Becoming attuned to this information allows you to create a loyal customer base. More than that, you’ve now created something even more integral: community.