Customer Service ExcellenceLecture Four Affluence and Customer Service
What do we mean by affluence? The term ‘affluent society’ was first coined by economist JK Galbraith more than forty years ago. Then, for the first time in history, spending became discretionary - people began purchasing items beyond those of basic subsistence At around the same time Abraham Maslow was articulating his hierarchy of needs theory that as societies develop, we move from needing products to sustain us to wanting products for our self esteem and self actualisation. Adapted from Complicated Lives Michael Wilmott and William Nelson 2003
Fast forward to the ‘noughties’ For most citizens of the industrialised world, affluence has reached such levels that we have developed a fundamentally different set of needs and expectations. Experiment: Write a list of the types of products that you need during a weekend. Write a list of the products that you wantduring the weekend and why do you want them? Adapted from Complicated Lives Michael Wilmott and William Nelson 2003
More demanding and more marketing literate consumers…. Consumers have developed a critical understanding of the relationship between them and the marketers. Individualism is promoted with an implication for brands being less about ‘what I have’ and more about ‘how I am’ Exercise: Who am I? Describe this person.... Adapted from Complicated Lives Michael Wilmott and William Nelson 2003
Higher incomes allow us to seek new ‘meanings’ consistent with Maslow’s self actualisation concept. Analysis shows that each new generation is more interested in experiences than the previous one. People are more concerned with wider issues – the environment, animal rights and third world employment practices. Adapted from Complicated Lives Michael Wilmott and William Nelson 2003 We are seeking fulfillment and experiences
Class debate How seriously concerned are we about wider issues such as the environment, animal rights or third world employment practices? In recessionary times, do our views regarding the above issues still affect our purchasing choices or are we more focused on low prices?
… Affluent Consumers ….. Ostentatious spending, bigger, better, flashier Having the best money can buy Buying products that express my personality
Then towards the end of the 1980’s … People began to associate ostentatious spending with bad taste not affluence There was a demand for subtler modes of distinction The new individualism is more about people’s beliefs, value, expertise and experiences Adapted from Complicated Lives Michael Wilmott and William Nelson 2003
How do the affluent distinguish themselves? They buy VERY expensive goods Vertu (Nokia’s luxury phones for the affluent) They buy products and services that show sensitivity to broader aesthetic or ethical agendas Rumah - Luxury Ethical Homeware from A World Lifestyle Collection. Rumah, London, UK They might reject the relation of certain goods to self expression altogether and the ability to distinguish good quality .natural’ and ‘authentic’ products’ from crudely marketed status symbols becomes more important to people. Hampshire Farmers' Markets - Hampshire's food, drink and crafts, direct from the producers Adapted from Complicated Lives Michael Wilmott and William Nelson 2003
All of this makes life more complicated for companies trying to sell their good and services to affluent consumers because their motivations are less ‘visible’Adapted from Complicated Lives Michael Wilmott and William Nelson2003
QWhat do affluent consumers fundamentally want? A : ‘to be able to have it all’; A successful and rewarding career…… To be great parents …… To live a happy family life…. To participate in an ever widening range of leisure pursuits …..
To have a multiple identity…. Dynamic executive Concerned mother Playful socialite Committed vegetarian ...........................Jane, female,35, £45,000 plus income What is the Impact for Customer Service Delivery?
Why are marketers interested in targeting the affluent?
Luxury Goods and the importance of excellent customer service Luxury goods sales hinge on customer service, research shows Delivering the service: FedEx - Supply Chain EMEA Fashion (Apparel) & Luxury Goods Industry
What do the affluent buy? YouTube - The World's Most Expensive Mansion . . .
Targetting the affluent Don’t assume the affluent can all be placed in the same segment According to car industry experts; Cadillac owners want to be chaufferred, are not attentive to styling details or the cars colour. Primary interests are comfort and the impression they make on others Porsche owners prefer to drive themselves. They are more interested in performance than luxury and the colour red is a favourite Jaguar owners are more austere. They are interested in elegance and prefer darker colours Mercedes owners like to feel they are in control. They tend to prefer muted shades of tan, grey and silver
Segmenting the affluent… Old money: They live on inherited money They tend to make distinctions among themselves in terms of ancestry and lineage rather than wealth. They are secure and do not need expensive goods and services to create an image Source: Consumer Behaviour A European Perspective Solomon et al 2006
The nouveaux riches They often don’t know how to be rich (e.g lottery winners) The Russian super spenders Champagne elite chase the world's nouveaux riches | Life and style | The Observer ‘They would like to spend more money , but are frustrated by the lack of products and services available to them’ Source: Consumer Behaviour A European Perspective Solomon et al 2006
The ‘Get Set’ Affluent but not ‘rich’ They desire the best products and services but may have to be a bit more selective in their choices. When targetting this group the emphasis must be on quality, authenticity and lasting value; Patek Phillippe advertising ‘You never actually own a Patek Phillippe. You merely look after it for the next generation’ Waterford Crystaladvertising ‘Steadfast in a world of wavering standards’ Source: Consumer Behaviour A European Perspective Solomon et al 2006
Net a porter – An ‘expert’ in providing on line excellent multi channel customer service The company: Designer Fashion | NET-A-PORTER.COM | Designer Clothes, Shoes, Bags and Accessories for Women The continued investment in customer service:NET-A-PORTER.COM Provides Customer Service with eGain OnDemand™ Impact one: - Service De Luxe: Net-A-Porter.Com + Stella McCartney Faux leather Thigh-High Boots Impact Two: Net-a-Porter profits rocket | News | Drapers