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Your competition is leaving town. And the bad news is that your competition is taking your best customers with him—frequently.
The competition for selling "things" in the luxury segment now comes from other luxury businesses that sell "experiences." If there is any doubt where the money is, compare growth in the luxury travel business (double digits) with growth in the fine jewelry business (single digits). Look at the increase in the number of private jets: Gulfstream has a three-year backlog on its largest planes. Yachts too are in unprecedented demand: 1,000 yachts over 100 feet in length are currently under construction.
The wealthy are choosing to commemorate the significance of birthdays and anniversaries by renting a castle in Scotland or a villa in Tuscany and flying the whole family over for the celebration. Instead of buying "a rock," they are cruising the Rock of Gibraltar.
Catering to the affluent has escalated to a new level. Service today is much more sophisticated than ever before. The bar has been raised by companies in the luxury travel industry who know they are providing more than a place to stay and a way to get there.
The best luxury companies are providing an exceptional experience by tailoring every aspect of what they offer, no matter how small, to suit the individual client's preferences and then capturing the information so that they can seamlessly customize future experiences and anticipate the customer's needs before they even have to ask.
For example, customized service has helped make NetJets (owned by Warren Buffett's Berkshire Industries) and Marquis Jet (its sister company), the leading marketers of fractional jet ownership and "jet card" travel.
If you are a NetJets or Marquis Jets customer (having paid a minimum of $100,000 for the privilege of access to one of their jets), your preferences regarding every aspect of your travel experience have been collected and are used to customize the experience on each flight you take. When you are escorted aboard your aircraft it will be stocked with your brand of liquor, your favorite wines, and your favorite bottled water. Before your board, the magazines will have been switched so that only your favorite titles will be visible. The galley will be stocked with your menu and the meat or fish will be prepared to your exact liking without you having to ask.
If you are fortunate to be returning to a hotel or resort that is managed by Rosewood Hotels & Resorts, your room will be on the floor you prefer, facing the direction you most appreciate. Your bed will be made with the pillow you prefer. Room service will know which blend of tea you desire and which newspapers you want to read when you are served in the morning. Your dietary restrictions, if any, will have been recorded and honored. You never have to remind the hotel of any of your preferences. They are always remembered and respected.
If you are one of American Express' Centurion Card holders you can pick up the phone and through your concierge, charter a yacht for $250,000 and be flown to meet it. When you arrive, it will be set up just the way you and your party want it. The concierge will have kept notes from the last time you set sail.
Why do these companies focus so much effort and attention on such small details? Leaders in the luxury travel arena know they are not selling travel. They are creating—perhaps "staging" is a more apt expression—memorable, personalized experiences against which everything else, including their experience buying jewelry, will be measured.
A jeweler's best customers live in an age of bespoke experiences even when at home. Your best customer's luxury automotive dealer checks with them regularly and will provide them an unusual car and driver for a really special occasion. He knows he is selling "presence" and perception, not transportation.
The maitre de knows their favorite table, the way the salad should be chilled, and exactly how much time to leave between the entree and desert. He knows he is selling an orchestrated experience, not merely sustenance.
What are you selling?
Richard Baker is CEO and founder of Premium Knowledge Group, Dallas, Texas, a consumer research and intelligence company, which tracks America's wealthiest consumers and their product and service purchasing patterns. He can be reached at: rbaker@premiumknowledge.net.
author: BY RICHARD BAKER, PREMIUM KNOWLEDGE GROUP