Growing a luxury business – it’s easier said than done.
The Big Question
“How can we get guaranteed sales, for free?”
– A lot of business owners when they talk to us
That is usually what most conversations with potential clients boil down to, even if they don’t say it openly, that is often what they want. As consultants, we have people or startups approach us on a regular basis asking how they can get luxury-level sales for free and what the cheapest kind of campaigns are they can invest in for quick and explosive growth. Do you see the problem here? If yes, gratulations, you are on the right path already. Keep reading if you want to be sure though.
The other scenario that we often encounter in prospecting are companies that we reach out to but turn out to be very skeptical of modern marketing or using technology to reach HNWIs. In other words, they think they need some magic bullet to get going. If they have been in the business for several years they also often think that the low-tech approach they have been using in the last 10 years will still work in next 5-10. Hint: it won’t! There is very little openness towards new approaches in small and medium-sized luxury companies sadly. This often can lead to hour-long calls which can be fruitful but often end up being a complete waste of time on our side.
Now, why do I still engage with these prospects then? As a consultant, I really want to help business owners. It’s true, I get satisfaction from seeing traffic go up, sales exploding through the roof and companies being able to grow and launch new products. It legitimizes my professional sense of self. I love the luxury industry. For me, it’s a win every time I can convince a decision maker in the luxury industry to invest in modern marketing. No client has ever regretted trusting my expertise in that sense. Because the projects and campaigns I launch deliver results and create brand equity, period.
Don’t get me wrong, there are also companies in the luxury business who understand that the affluent consumer is indeed a special one and that it requires a certain amount of finesse and patience to engage with them successfully (be it online, offline or a mix of those two). Those companies are the best type of client to work with since they understand that to get somewhere you HAVE to invest first and take some chances with your budget (returns come from risk, after all, every stock market investor knows this).
I thought writing this blog post would be a good idea to maybe have a go-to reference when explaining to these potential clients why investing in branding, marketing, sales management and public relations is unavoidable (in that order btw.) In providing free education, I hope to create better buyers. It’s as simple as that, so let’s start.
*Disclaimer* – This guide implies that you have a worthy luxury product or service ready to launch. You have production, sourcing, teams, logistics and legal regulations already figured out. If you need help at the product/inception stage this article is not for you, and to be honest, you should probably not yet invest into marketing or a consultant for that matter unless you have the capital to outsource creativity and business management completely to somebody else.
There can be no luxury without proper branding. The luxury dream consists of multiple things (too many to list them all here) but the main ones are quality, aesthetics, uniqueness, rarity, exclusiveness, heritage, storytelling and an undying commitment to excellent VIP service pre and post-sale of course. Now in the modern times, this dream can be expressed in many new and interesting ways:
- Your homepage
- Your branding materials
- Your social media accounts
- Your retail/sales/office space (where your receive clients)
Hire web-developers, graphic designers, and copywriters (by the way, we offer copywriting too) who KNOW the luxury space and what kind of visual quality is required, don’t be a cheapskate. Pay especially attention to things like landing page design, e-commerce design and the psychology behind why a certain site works with affluent prospects. Invest in professional product/business photography, high-end sales & marketing brochures, quality content and professional social media management. Hire a visual merchandiser or interior designer and build an office or retail space that represents the kind of business you want to attract (unless you are a remote-only business).
Here is where the magic happens. You have your product/service and branding down, now it’s time to promote. Giving a strict and complete order here is difficult since it depends on the market, the profit margin and your available budget but there are nonetheless some must-haves:
- Your marketing strategy blueprint for the first 6-12 months
- Customer/Account Profiling (creating targeted personas or a finite account list)
- Inbound/Email Marketing
- Content Marketing (blogs, videos, music, pictures, mini-sites etc.)
- Media Buying (display, ppc, mobile/apps, affiliates, print)
- Search Engine Optimization (SEO)
Your strategy blueprint is the key component here. We usually do a two-step approach: strategy first, execution second. If you don’t know where you are going in terms of goals, budgets, expenses, and assets, you are essentially flying blind and relying on luck!
I also didn’t include influencers, celebrity promotion or events & sponsorships here for a reason. Lot’s of luxury business owners overestimate the effectiveness of these measures when they don’t even have an established brand yet. Later on, these can be very effective though if used correctly.
All of these points are very important for the long-term health and growth of a modern luxury brand. If you neglect one, eventually your business will suffer and stagnate. You can’t build awareness in the right circles by doing one-off activities. Consistency brings results. Mark my words!
There are some luxury business models (especially in the b2b or service categories) where marketing alone cannot create enough sales or leads to sustain the business in the short or mid-term. For that reason (and in case you running a classical retail or wholesale point-of-sale business) you need to invest in some quality sales staff and the kind of environment where they can thrive.
- A lead generation blueprint or sales plan is again key
- Outbound/New Business Sales
- Inbound Sales
- Account Managers
- Retail Sales
- A quality CRM (integrated with your marketing automation)
Make sure that marketing and sales are aligned and the representatives are getting the type of coaching, training, technology, and materials they need. Be it via books, seminars…you name it. Create commission structures that reward new business over existing accounts and make sure not to over-rely on your one or two top-sales people. They will hold you ransom at some point, or move on to another brand and take your customers with them. To prevent this, try to build your digital channels (like SEO, or social media) to the point where they can match the performance of your the prospectors in your organization.
I know this opinion will be quite controversial since marketing, sales, and public relations all like to present themselves as must-haves and most important to the success of a new luxury brand. I still think though that public relations should come after investing in branding, marketing, and sales. Why? Because of the effectiveness and longevity of most pr-campaigns. Even if you get that initial coverage in a luxury magazine, the free editorial showcasing your collection on page 3, the review piece saying how your yachts are the most exquisite on your favorite yachting blog, how long will that boost of attention last before the consumer moves on to something new? Public Relations managers need movement in the company to create effective outreach campaigns after all. Some examples can include:
- A new collection
- A (fashion) show
- A new product or service
- A trade show, an event
- A sponsorship, a charity, a foundation
- A celebrity or influencer showcasing your product
There are indeed a lot of ways to leverage the power of free exposure. But if you drill deeper you will realize that there are often high hidden opportunity costs associated with all of these ideas. So all that exposure is not really free after all, isn’t it? How many times a year can you innovate if you are let’s say a small luxury boutique hotel? How many yachts can you refurbish per season if you are small to a mid-sized charter company? Maybe you just created one product, like a gold and diamond chess board and that is it for now? How can you keep doing ongoing PR in that case? Invest in the departments of your business that can, within a reasonable timeframe (3 months+), pay for themselves. Then expand and go crazy. This is the smart approach. Also, if your company is already profitable it will be so much easier to give PRs what they need to thrive.
But David, you didn’t tell me exactly what I need to do?
That is right, you correctly realized that a simple blog post cannot replace a paid for blueprint for growth. There is a reason why I charge a premium for my time and sometimes even have to educate prospects on why I charge what I charge.
Starting a luxury brand is not easy. Starting any brand without the right kind of capital and know-how is hard, but starting a successful luxury brand is borderline impossible without the proper funds and skilled outside help. Remember the question from the beginning? The question reveals a flawed approach to business.
Let me stress this again:
If you can’t invest a certain amount of money to get a sale you a) shouldn’t start a business right away, you should first work on securing financing or b) you haven’t understood how sales & marketing really works in general.
Take us at High End Consultancy as an example, we had to pay for hosting, custom fonts, stock footage, designers, plugins etc. to set up this blog and our homepage. Apart from the know-how, I gathered in the early days of my career and academics, I had to consume an excess amount of courses, books, seminars, programs, articles and attend events to hone my craft and be able to run a profitable consultancy with my wife. And I would consider myself far from being all-knowing. There are always new developments that I need to follow to stay up-to-date.
We also came up with the funds for these business expenses ourselves and never whined about it. That is why I would never approach somebody and ask if he wants to work for free or question why he charges what he charges. I consider this to be rude, to be honest. You know what you are worth, and if you are in the luxury industry, you should know the value of your product and be proud of it.
To sum it all up, you should know when it is the right time to invest. Do me a favor, stick to the correct sequence of things and build your business in an ethical way. And if you don’t know the right way, read this blog.
If you want professional help for your business and you have a real budget that you are willing to risk (yes, risk) for success, then contact us. We love to work with people like you. Because we, like you, like all successful business entrepreneurs before you are risk takers too.