• July 1, 2007
  • By Lior Arussy, founder and president, Strativity Group

Ain't It Rich?

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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.

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