Understanding The Upscale - BY LARRY PIMENTEL
In my previous columns I’ve focused on the up-market consumer and how to market to that client in today’s dizzy economy. This month I’m taking a different twist by giving you the chance to gain valuable insight from one of the foremost authorities on luxury in the country Greg Furman, founder of the Luxury Marketing Council. I think you’ll benefit from, and be inspired by, his perspective on today’s luxury consumer and how luxury is changing. Here’s my interview with Greg Furman.
What is luxury travel today and how has it changed? The definition of luxury is changing rapidly. Today, it refers to things that are so distinguished by their inherent value and quality that they are considered worth every dime. They stand out. Their quality is so great and they command a premium price. Luxury consumers want these products and services, but only after they understand what is the level of quality and value. They’ll spend, and spend heavily, but they want to do it intelligently.
Who are luxury customers today? Today’s luxury consumers are quite different than those of past generations. Tens of thousands of them didn’t inherit their wealth, but were self-made and have strong middle-class values. They possess high drive and a powerful work ethic. A high percentage of them were working-class kids who worked long hours, climbed the corporate ladder, and are now on their second or third career. I’ve been fortunate to fall within this segment. Just over 16 years ago, I founded the Luxury Marketing Council. Today, I’m in my third career. I’m an entrepreneur who paints, sculpts and has his own studio. I will be the first to tell you that I have an incredible life, and I am grateful for it every day. And I’m not alone. There are 2.7 million people in the U.S. like me with investible assets of $1 million or more, and they made it on their own. Only 10 percent of real wealth in the U.S. is inherited or that of celebrities, such as star athletes, actors or similarly prominent individuals.
How does this apply to the travel agent community? Travel professionals can benefit greatly from understanding that today’s luxury consumer has a hunger for knowledge about products and services. They want to know the “best of the best” for wine, food, fashion and travel. They want to learn from professionals like you – in a non-condescending yet sophisticated way. They want to know why you’re recommending what you’re recommending, and what makes it the best. It’s also vitally important to remember that these clients have more money and are more willing to spend it. As the economy turns around, that willingness will most certainly increase accordingly.
How should agents approach the luxury customer? It’s important to exude confidence. Never be intimidated by luxury consumers. Remember that about 90 percent of them made it on their own good wits, so avoid judging them by their pocketbook. I once worked for Neiman Marcus. The top salespeople there at the time were selling up to $3 million per year each. Had they pre-judged clients by their appearance or presumed ability to spend, they very easily could have underestimated the depth of wallet for countless customers. The same holds true in the travel business. Luxury consumers are willing to spend heavily on travel, but also are typically rather sophisticated and knowledgeable about it, so you need to be, too. Knowledge is power. There can be a bonding experience between you and your client. Shooting for the moon and proposing to them your highest-priced product is perfectly appropriate, providing you sincerely believe the product is ideally suited for them and can articulate why. They’ll let you know if you’ve gone too far.
How important is the luxury consumer market? This segment represents your best customer advantage. In a recessionary market, luxury consumers are largely the only ones standing tall. They also represent your biggest chance for sales and higher commissions. Even if they’ve lost 30 percent of their portfolio, they still don’t have to decide between a Patek Philippe and a Timex. They still understand the price-value equation and they want the best. So go to your best customer right now – those 2.7 million consumers. They’re willing to spend more; they tend to be more loyal over time; and they refer more clients if asked, so they represent a powerful word-of-mouth tool for your business. Price doesn’t matter if you can convince them of the value of the experience. There has never been a better time than now to sell travel to the luxury consumer. Today’s luxury clients want high-touch, sophisticated, unique and memorable experiences. They want to enjoy their wealth rather than display it, and that’s precisely what an outstanding travel experience offers. If you sell exceptional experiences with sophistication, passion and knowledge, you are likely to capture the greatest share of wallet, as well as referrals and leads from those highly sought-after clients.
Larry Pimentel, a recognized expert in luxury travel, is president and CEO of Azamara Cruises. This column is adapted from one appearing in the January issue of Agent @ Home magazine. You can reach Larry Pimentel by emailing lpimentel@azamaracruises.com.
Source: TravelPulse.com - Jan 05, 2010 / © 2010 Performance Media Group