Fallon Brainfood: How Customer Service Will Save Luxury

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Why customer service will save luxury. March 8, 2011

Meet Savanah and Jeanine. Savanah Brihn Jeanine Lilke

And, you’ll also see two other faces via Skype. Peter Rose Mark Guarino Senior Vice Senior Auto and President Entertainment Analyst

AgendaThree Stages of LuxuryShifts in Consumer and Brand BehaviorExamples of Modern Luxury Customer Service

What if I don’t work on one of thosefancy-schmancy luxury brands?Customer service is becomingincreasingly important for all brands.And historically, mass brands adoptthe behaviors of luxury brands forcingluxury to continue to raise the bar.So this is your time to learn from themasters and plunder.

Luxury customer service is no longer conﬁnedto one-on-one interactions with sales people Mobile Social Media In-Store Online Experiential

Act I: The Boom

Few were invited to partake.

It was truly a lifestylewith its own social cachet.

The best money could buy.

Made by artisans,not assembly lines.

Sold by experts.

With personalizedand attentive service.

Not for Everyone Personalized Service Part of a Larger StoryAt its core, luxury was… Made and Sold by Experts Exquisitely Crafted A Social Experience

Act II: The Fall

Consider your status when traveling.

“The saddest thing I can imagine is to get used to luxury.” — Charlie Chaplin

And that is exactly what we did.

When luxury went corporate,the primary objective changed.From: To:Creating the ﬁnest Making money,things money could buy. lots of money.

Consumers overextended their credit.

Offered entry-level productsto reach aspirational customers.

Reduced the quality to turnaverage proﬁt margins into luxury margins.

No longer hired experts.

Traded individualism for homogenization.

Holiday InnBegan to expect luxury-style service in non-luxury environments.

Began to expect luxury-style service in non-luxury environments.

This triple threat brought luxury to its knees.1.  Big conglomerates homogenized brands to increase proﬁts.2.  Consumers expected a piece of the luxury life.3.  Mass brands incorporated luxury services.

And the recent economic recession certainlydidn’t help luxury retain its appeal. 38% of consumers reported they reduced the amount of their luxury purchases in the past year Source: Mintel, Consumer Attitudes Toward Luxury Goods, U.S., March 2010.

And the recent economic recession certainlydidn’t help luxury retain its appeal. In the first half of 2009, worldwide sales of luxury goods fell 20% Source: Bain & Co. Consulting, May 2009.

Act III: The Comeback

In other words,they needed to return to this… Not for Everyone Personalized Part of a Larger Story Made and Sold by Experts Exquisitely Crafted A Social Experience

In a way that isn’t this…

The only way to modernize luxury is throughcustomer service and customer service is bigger than you think it is.

Afﬂuent consumers view customer serviceas an essential part of luxury. 57% of high-income shoppers identify superior customer service as a defining quality of luxury goods.Source: Luxury Institute, September 2010.

Yet, that’s where luxury falls apart. 50% of high-income shoppers have noticed a marked decline in the customer experience.Source: Luxury Institute, September 2010.

Here are some impactful ways to draw onthe classic codes of luxury in a modern style.

FROM: Brand validates customers TO: Customers validate brandBurberry: Teamed up with Facebook to create a social networking fashionblog that revolves around the famed Burberry trench.

FROM: Inaccessible to most TO: Accessible to many, but truly rewarding the bestRitz-Carlton: Through collaborations with like-minded partners,Ritz-Carlton awards the best customers with exclusive experiences.

experience.FROM: Personalized one-on-one services TO: Use technology to personalize all service touchpointsBloomingdale’s:Engaged shoppers with an interactive and individualized experience.

environment.FROM: Guided discovery TO: Self-directed discoveryBMW: Transformed the traditional dealership experience to createa more welcoming environment.

FROM: Guided discovery TO: Self-directed discoveryMINI Cooper: Extended the campaign into new markets by offeringdistinct experiences in the public space.

FROM: Product experts TO: Lifestyle expertsLululemon athletica: Community Ambassadors lead classes andexperiences unique to the lululemon lifestyle.

Tiffany & Co.—Engagement ring app effortlessly connects mobile to in-store.FROM: Singular customer interactions TO: Seamless customer interactionsTiffany & Co.:Engagement ring app effortlessly connects mobile to in-store.

FROM: TO: Brand validates customers Customer validates brand Accessible to many, Inaccessible to most but truly rewarding the best Use technology to personalizePersonalized one-on-one service all service touch points Guided discovery Self-directed discovery Product experts Lifestyle experts Singular customer interactions Seamless customer interactions

Three things we want you to rememberabout luxury customer service.

1.The old ways of luxury laid the foundationfor the modern luxury market.

2.To stand out today, luxury brands must usecustomer service to reinvent their identity.

3.In order for continued success,luxury needs to out-behave,not just outperform, the competition.

Thank you.

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Fallon Brainfood: How Customer Service Will Save Luxury

by Jeanine Lilke

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