It’s a question which is often posed to large corporations and their teams rather than a diamond wholesaler or jewellery retailer. The obvious answer is either the diamond business or the jewellery business, but that’s a technical answer. In fact it is the product that you sell, it is not the business you’re in.
You’re in the luxury business.
If, as a diamond merchant, you really look at your business as a single facet (pardon the pun) of selling stones, then you will always be limited by the amount of stock you carry or the price at which you sell it. Don’t get me wrong, that might work for you, but I think it’s fair to say that your ability to leverage your customers down the pipeline will be greatly limited. If you can create the atmosphere which inspires your customers to appreciate that your diamonds are truly superior to your competition’s, then this will go a long way in how they sell your diamonds to their customers.
If, as a diamond jewellery retail store, you think of your business as one which just sells product then you too are missing the most fundamental trigger which will build your relationships and more importantly, the perception that your customers have of you in their mind.
My aim with this line of thinking is not to create some random discussion on what we do, but more importantly to bring to light the need to challenge the way we think about our business if we are to tackle the problems and difficulties that we have today.
If we begin to take this idea and expand on it, where does it take us?
I think the first question we need to ask ourselves is, what does it mean to be in the luxury business? Is it purely that we sell expensive items? The answer is definitely not. Selling expensive items is not the trigger – it’s selling expensive items relative to similar items in the market itself. You could buy a million dollar apartment which is expensive, but not when compared to a twenty million-dollar apartment.
Rather than get tied up on definitions let’s get to the crux of the matter. What behaviour do we have to display and what environment do we have to create for our customers to make them feel they’re experiencing “that something special”? I think it’s fair to say your goal is to make your customers feel that they are in Louis Vuitton and not Woollies!
That being said, we can’t and/ or don’t want to spend $100k to refurbish our stores. And, of course, we don’t need to renovate, we just have to come at it from a different angle and look for other methods.
A simple tool to help you create the setting is the ‘award’. Winning an award, or achieving a certain status in your industry can act as a very powerful focal point from which to differentiate you from your competition, and build the image in your customers mind that you are one of the best at what you do.
You may have won an award ten years ago, but that shouldn’t stop you from branding all your marketing material as an award winner. The best examples of this technique is Olympic athletes who use this status for the rest of their lives to generate an income. Everyone likes to be associated with the best. Occasionally customers might just think they will come to you first to get ideas and then go to someone else to buy because as an award winner, you are too expensive! But in effect what you have done is create an opportunity for a sale… what happens next is up to you.
If you were to analyse your top customers, and look at what they spend with you throughout the year (or maybe over five years), how much are they worth in real terms? How much would you lose if they never set foot in your store again?
If you got to know them well – which I assume by now you do – what experiences do you think you could give to them to take the relationship to another level? Could you hire a yacht for an afternoon and invite them for lunch? Could you hold a small dinner party at the most exclusive restaurant in town? How about flying them interstate to see the latest musical? Have you thought about the impact that such an experience would have on them and the flow on effect that it would generate if they were to talk about such an experience to their friends and family?
This is a how the big end of town deals with their customers on a regular basis: they look to provide them with experiences, luxurious experiences!
Of course, no one doubts that at the high end of town these people could pay for it themselves, but that’s not the point. It is the recognition that they are special, and that you want to treat them as special. This is truly one of the key drivers and emotional components of luxury.
Paspaley Pearls invites a select number of customers whom they fly up to the Northern Territory for a week to experience their pearling operations as well as a touch of Northern Territory magic.
What could you do? Get creative, make a budget, have some fun, and when the naysayers ask you how can you justify spending that money, your response should be “how can we not?” What if these customers never walked
into your store again because the guy down the road just might be doing this exact thing?
I purposefully did not focus on how beautiful your store looks, nor any of the other things that you could use in terms of setting. l’m focused on the relationship and understanding the psychology of making your client feel
valued and special.
When you start to get this right, and I’m sure many of you already have, the question is how you now extend this feeling to the next tier of customers, so that it moves all the way down the line to every customer who deals with you. I guess we could call this the Tiffany experience.
There’s a great story… many years ago a marketing guru was having dinner with the chairman of Rolex. A friend of his stopped by the table to say hello and turned to the head of Rolex whom he recognised and asked “how is the watch business going?” The response was, “l don’t know”. There was a pause and a moment of awkwardness at the table. How could the head of one of the most successful watch company in the world not know how the market was? The chairman’s next statement was “Rolex is not ‘the watch business’. We are in the luxury business.”
So, what business are you in?