Luxury Retailers on Service With Style

Retailers who don’t sell jewelry know plenty about high-end sales strategies, personalized customer service, and, above all, making the experience memorable

The definition of luxury is rapidly changing—not only in the jewelry and watch trade, but also across a variety of product categories and industries. JCK spoke to representatives from noncompeting luxury retailers—car companies, private jet purveyors, magazine publishers, and piano ­makers—in an effort to gain insight into the marketing, sales, and customer service strategies that appeal to the high-end customer.

Anecdotal evidence from varying luxury businesses is strikingly similar: Post-recession, the well-heeled consumer is placing superior craftsmanship, quality materials, and—especially—customer service ahead of products that are seen as status-enhancing.

According to a December 2012 survey by the New York City–based Luxury Institute, which teamed up with the Lincoln Motor Co., more than 80 percent of affluent Americans say that superior craftsmanship and materials tip the scales when it comes to buying decisions. Their third most important consideration is superior customer service both during and after the sale, according to 76 percent of the respondents. An overwhelming majority—more than 90 percent—say that acquiring a long-lasting, high-quality product is more important than enhancing their status.

© Ford Motor Co.
Lincoln wants you to look at its MKZ and think “luxury.”

Given that status ranks low on the priority list, Ford Motor Co. has seized the moment to recast its Lincoln division—a brand that in terms of prestige has always trailed carmakers such as BMW, Lexus, and Mercedes-Benz—into a boutique luxury line. The division is revamping its midsize MKZ sedan and three other vehicles, as well as personalizing customer service and debuting an advertising campaign featuring a likeness of President Abraham Lincoln. “What we see in this insightful Luxury Institute research is that during the recession, the U.S. luxury market changed and people changed,” says Jim Farley, executive vice president of Ford Motor Co. global marketing, sales, and service. “They want what appeals most to their desires and not what they believe will impress others, and this is a trend we believe will continue to grow ever stronger. We also took good note that in the automotive sector the expectation of great service is still being underserved, something we intend to address with the new Lincoln.” 

Today’s luxury experience is personal, says Greg Furman, founder and chairman of the New York City–based Luxury ­Marketing Council. “Most wealthy Americans are working-class kids like me—90 percent of wealthy individuals have corporate jobs,” he says. “Only 10 percent have inherited money. The growth [consists] of primarily working class who have risen by their own bootstraps. And now that they’ve made it, they want to purchase goods in a sophisticated, experiential way.”

Experiential and personalized service is among the most important components of Lincoln’s turnaround efforts. Every customer who purchases an MKZ is presented with tokens that range from champagne and handmade jewelry to a one-night stay at a ­Ritz-Carlton hotel. “What we hear consistently and loudly from wealthy consumers is that the manner in which the goods are sold, as well as the service provided after the sale, is nearly as important as the product themselves,” says Luxury Institute founder and CEO Milton Pedraza.

Experience is another great differentiator, according to J. Bruce Peddle, vice president of sales and marketing for private jet agent Flexjet. Wealthy clients always have an alternative, he says. “Anybody can buy planes. But we feel that in order to be successful, we need to deliver a memorable experience,” he says. “Exceptional service comes with personal service. We have to understand who’s getting on board, know their names, their favorite wine, do they have a dog, birthdays—some very simple things get us a long way.” Announcing when the plane is flying over a client’s hometown or alma mater, for instance, can be enough to make the flight memorable.

Technology advances are increasingly enabling employees to keep track of details as well to better target marketing efforts—information such as what customers have bought in the past, how they want to be reached, and at what level of frequency. Everybody from salespeople to front-line employees who interact with the client must be included in the conversation.

“I was recently staying at the Park Hyatt Milan,” says Steve DeLuca, senior vice president and publisher of American Express’ Departures magazine.

“I approached the dining room for breakfast. One of the waiters said to me, ‘Hello, Mr. DeLuca, welcome back. Would you like the usual?’ It had been two months since I was last there. I’m still blown away. Everyone wants to be remembered. Those ­mental notes of customers—what they’ve bought in the past, who they are—it means so much when we’re all ­running around so fast. It’s my favorite ­luxury story of the moment.”

Too many brands leave their sales force in the dark, according to Furman. “People on the line are not being informed about competitive products and benefits,” he says. “A car wonk, for instance, might have done all the research and will be powerful and then they’ll face the salesperson who is flat-footed on how to ­articulate that brand. Innovative brands are reinvesting in every facet of the marketing mix—­educating their staff and people on the line—and it’s creating more of a partnership.”

Courtesy of Steinway & Sons
Is there anything more grand than a Steinway & Sons piano?

Steinway & Sons, for example, invests significant time and money in educating and empowering its sales force. The company requires employees to attend Steinway University, a three-week course that teaches associates everything from the company’s legacy to the inner workings of a piano. Piano hobby­ists, not professionals, make up the majority of the 150-year-old company’s sales. Nevertheless, a salesperson must be equally well prepared for the professional. They don’t necessarily have to be able to play, according to president Ron Losby. In fact, playing can be off-putting to the hobbyist who may play only once a week or simply want a piano as furniture for a room. “The No. 1 [obstacle] to a sale has nothing to do with the product,” he says, noting that making a sale is as much a game of psychology as anything else. “It has to do with the customer’s self-worth.”

Luxury companies are realizing they are competing not only within their own industry for a sale, but also with retailers across all industries. Like-minded companies that have combined their efforts see collaborations as an effective way to bump up their customer base. In the past, Steinway & Sons has partnered with BMW and Karl Lagerfeld. In about a decade, for its 160th anniversary, the company will partner with an as-yet-unnamed New York designer for a ­limited-edition collection of pianos.

Steinway & Sons has historically looked to other luxury goods retailers for pointers. Tiffany & Co., for instance, offers important cues about the luxury customer, says Losby. “It’s important to know what turns them on from a visual and merchandising approach,” he says. “The lighting is extremely important. We spend more on lighting than anything else.”

The piano maker also has shifted its retail model away from 36,000-square-foot showrooms to a smaller selection of instruments more beautifully displayed in 2,500- to 3,500-square-foot showrooms—a trend that’s showing up in the fashion retail world as well. Says Losby: “The idea of exclusive scarcity ­provides a little urgency.”