Luxury Brands Failing With Customer Experience

When it comes to customer experience, ironically, many luxury brands that are built on the experience of their products fall short when it comes to delivering even on the simplest dimensions of experience with their brands. According to a Forbes article that cites a ContactLab and Exane BNP Paribas study of 30 luxury brands, many brands fall down when it comes to customer data capture across even the most basic dimensions like gender and zip code, which allow for simple segmentation and personalization of messaging, content, products and offers.

While the study cited specifically focuses on email, the lesson is applicable to all brand channels, from in-store POS and mobile to social and even direct mail.

“If content does not cater to their needs, their impression of a brand will be lowered and they will eventually unsubscribe.” -Marco Pozzi, study author

We sat down with Matt Segal, who advises an array of leading luxury brands, like Godiva Chocolates and Citizen Watches on customer strategy and loyalty marketing, to discuss these findings.

Q: Matt, why are luxury brands behind when it comes to omni-channel customer experience?

MS: Luxury brands are plagued by many of the same issues mainstream brands are struggling with; it’s a mix of failure to capture customer data, and even when a does capture it, nothing is often done with it. While many luxury brands are apprehensive to incorporate loyalty programs into their brands, they can be designed to align with the brand’s goals and can provide tremendous customer insight into the customer’s demographics, behaviors and preferences in order to deliver relevant, valuable experiences.

Q: Why are luxury brands apprehensive when it comes to loyalty?

MS: While certain brands are engaging the benefits from loyalty solutions, many have the mindset that loyalty programs have to focus on delivering discounts and coupons. This perspective on loyalty is plaguing so many brands, but could not be farther from the truth. Luxury brands ranging from Pandora Jewelry to Harley-Davidson are using various types of loyalty programs to to deliver exceptional experiences to their customers to help cultivate genuine loyalty towards their brands.

Q: How luxury brands provide rewards that don’t focus on bargains that can discount the brand’s value?

MS: The customer strategy of a loyalty program should align with the overall goals of the brand. In some cases luxury brands will develop tiers in their loyalty programs that can be earned based on a customer’s brand interactions. Each tier can provide elements that enhance their experience with the brand which can range from everything from complimentary gift wrapping and valet parking to product sneak peeks and personal shoppers. The key is developing a strategy that extends and enhances the customer’s experience to create a stronger affinity with the brand.

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