Luxury brands and stores are turning to Customer Relationship Management (CRM) , a customer-centric philosophy, to create the ultimate customer shopping experience for their wealthy clients. A software tool, CRM uses technology and information collected on customers' purchasing preferences, to build business, loyalty and relationships.
How Customer Relationship Management Works
As luxury brands fight hard to build momentum after the economy dipped and fizzled, many are investing in CRM strategies to deliver even more extraordinary customer experiences that wealthy clients expect and demand. However, these high-end retailers have implemented CRM from an operational angle, relying on technology and gathering information on customers' purchasing preferences, sales activity, marketing campaigns and results, and even employees, to paint a picture for the corporate decision makers about the vitality of their prestige, retail landscape. But is just knowing this information enough to deliver value and develop stronger customer relationships?
CRM Data Improves Customer Service
Luxury shoppers don't go to stores just to buy things. Prestigious consumers place enormous value on the experience of the acquisition, expecting not only extraordinary service and the highest quality but also personalization and understanding. According to Greg Furman, founder and president of the Luxury Marketing Council in New York, "Luxury buyers want to see evidence that the store or brand understands who they are and what their buying patterns are." Sophisticated shoppers want to be recognized, be shown products that would truly be of interest to them (based on their past purchases), and made to feel like they are the store's or brand's best customer.
To remain in the retail lap of luxury, prestige brands must be able to provide a level of service that delivers on their promise of luxury. One way they can achieve that distinction is to optimize the collected CRM information and put it into the hands of their direct salespeople or online associates through hand-held computers or a mobile phones; otherwise it will remain raw data. Empowering their floor and online sales force with real-time data makes can be used to make the customer feel truly special because the sales associate can reference important, historical information about the customer, using it to add value to the shopping experience and probably additional dollars to the sale.
Using CRM to Show Luxury Buyers They're Understood and Recognized
Luxury consumers are not receptive to mass e-mails about store specials and sales; learning that everything is being marked down 50% is irrelevant to them. CRM data enables management to target an audience with an effective offer. If a savvy, prestige store crafts a message offering a discount based on a customer's historical purchases, the wealthier shopper will take notice because they're being recognized. Another method to show a store's best customers their buying preferences are appreciated and valued is for retailers to up-sell or cross-sell a brand's products. For instance, knowing a customer's preference for Gucci handbags and that they've never bought a pair of Gucci shoes, the store then offers a limited time only discount on Gucci shoes. Or, because CRM data reveals that certain loyal customers have shopped in a particular department numerous times, the store can offer discounts at certain locations on certain days.
While the analytical data CRM provides to management is invaluable, using it for customer experience relationships and help in getting luxury shoppers to transfer brand loyalty, spend more and feel good about it, is the ultimate goal for the luxury retailer.
Readers interested in brand management will also find information on social media marketing in Should Luxury Brands Use Facebook to Attract Wealthy Friends? and Can Twitter Improve Brand Loyalty for the Luxury Industry? Strategic partnerships are another way luxury brands can increase new business as reported in Luxury Brands Form Strategic Alliances to Increase New Business, and for an overview of all marketing ideas, read Branding Strategies That Keep Luxury Brands Competitive.
Sources:
Marketwire.com, "Luxury Institute's Wealth and Luxury Trends 2011 and Beyond," (accessed October 12, 2010)
Luxury Society.com, "10 Critical Steps for Creating A Powerful Luxury CRM Culture," (accessed February 24, 2010)
Kathleen Armentano - A freelance writer and website publisher, Kathleen has spent over 20 years researching and writing for B2B corporate America and graphic ...
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