Ain't It Rich?
The new competitive differentiation for luxe retailers will be about behaviors and solutions that are customer--not product--centric.
For the rest of the July 2007 issue of CRM magazine please click here

There's a growing distaste among shoppers at luxury brand stores. Some recent press reports cite customers' complaints about inattentive staff ignoring their needs and about indifferent treatment. Even well-known customers have suffered indignities at some high-end shops: Two years ago Oprah Winfrey arrived at Hermes's Paris store--which, granted, had closed 15 minutes earlier for a private event--wanting to make a quick purchase, she had explained, only to be turned away first by a clerk and then by a store manager. Leave it to others to hash out how racist the incident was (although you can't name a more customer-unfriendly behavior than hatred, can you?). The point is, the problem of poor luxury customer service exists, and the proposed solutions are not solutions at all. Retail luxury goods executives are rushing to offer quick fixes like new store designs and new customer databases. These are the easy ways out, and will not solve the problem.

The root cause of the issue is that the luxury goods industry, perhaps more than any other, is stuck in a very traditional mode of product centricity, and execs believe that if they offer something, customers will automatically buy it. Luxury product companies are guilty of the highest transgression when it comes to customer centricity: In high-end retail goods' hierarchy of importance, luxury designers occupy the top spot. Designers are worshipped and their products are often presented to customers as if they should be grateful for the privilege of purchasing them. Decades (centuries?) of elitism and selectivity have engendered an Olympian level of customer contempt.

Luxury goods vendors' behavior, however, is not really unique; rather, it's an accentuated version of product centricity. If you have ever stepped into a luxury goods store and were welcomed with a top-to-bottom can-he-afford-us look from a salesperson, you know what I am talking about. And the discomfort you feel this insulting moment is exactly the feeling customers have when interacting with a non-customer-centric organization.

Design alone can no longer save luxury brands--execs are tasked with increasing revenues at these enterprises just as at other businesses, and to make this goal they must develop a complete, true customer-centric strategy that evaluates every possible touch point with customers. Products alone are not sufficient to win the race for customers' loyalty. The days of intimidation as the primary customer emotion elicited at a store must end; inspiration must replace them. Luxury store staff should treat customers as the most important segment in the relationship, and the designers as customer servers. The customer experience must include the employee's behavior and that behavior must differentiate through delight. All employees should be trained to deliver amazing experiences, and the superior attitude must go. It will not be an easy transformation; many employees join such companies exactly because they are elitist. But the change must take place.

The problem is deep, but how these customers are perceived has to change. This alteration will require an in-depth strategic approach that is a core necessity. Customer experience should not be a luxury in any industry--it is the new competitive differentiation.

Lior Arussy (lior@strativity.com) is the founder and president of Strativity Group (www.strativity.com). He is the author of several books, including Excellence Every Day (Information Today, Inc., 2008), his most recent, an excerpt of which appeared in CRM’s May 2008 issue. To learn more about customer strategies, sign up for his newsletter at Strativity Group's homepage.

Page 1
To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
Related Articles
In an exclusive excerpt from his new book Excellence Every Day, industry thought leader Lior Arussy examines the truth--and crippling fictions--behind the value of experience.
Feeling battered by the recession? This is how you do battle: Fight! Fight! Fight!
Research by Strativity Group shows that higher investments in customer experience result in lower attrition and higher referral and customer satisfaction rates. Cutting back is not an option. "The race is on," says Lior Arussy, president of Strativity Group.
Financial services firms need to look at more than just monetary compensation to keep employees engaged, according to a new study.
Is a new industry standard keeping executives from focusing on the relationships that matter?
Lofty statements too often end up as small and meaningless actions.
The ever-evolving journey toward exceptional customer experience.
If that's the case, do we really need to change?
The real thing requires tailored, customized, and personalized solutions.
Focus on the customer's heart, not his head.
Only if you remember why it mattered in the first place.
From now on, consumers will be saddled with residual uncertainty.
The measurements you track are an indication of the customer relationships you want to have.
Popular Articles

Home | Get CRM Magazine | CRM eWeekly | CRM Topic Centers | CRM Industry Solutions | CRM News | Viewpoints | Web Events | Events Calendar
DestinationCRM.com RSS Feeds RSS Feeds | About destinationCRM | Advertise | Getting Covered | Report Problems | Contact Us