November 10, 2010
Direct messaging such as personal phone calls and social media tactics are particularly effective for targeting consumers with annual incomes higher than $500,000 and should play a role in holiday strategies, according to research from AgencySacks.
The research provides insight into how luxury brand marketers can counteract the economic forces that would conspire to depress consumer spending in the luxury sector this holiday season. The key is to focus on message personalization and discreet value propositions.
“What our research from Q3 shows is that affluent customers need havy personalization,” said Andrew sacks, president and chief executive officer of AgencySacks, New York. “If I were doing anything as a luxury marketer for the holiday season, I would have a lot of sales staff who are ready to call their best customers.
“As old fashioned as it seems, I think the telephone is the best weapon for this season for companies selling high-priced products,” he said. “Tons of people are mailing and tons of people are doing advertising, but not that many are making the effort to do things in a highly personalized way."
AgencySacks is a marketing agency and research firm with clients such as The Leading Hotels of the World and Cartier.
Striking a balance
Even as the economy begins to grow again, consumers remain cautious (see story).
AgencySacks’ research offers some possible solutions for opening wealthy consumers’ purse strings again.
First, wealthy consumers — those with incomes above $500,000 a year — were three times as likely to respond positively to receiving personal phone calls from luxury brand sales associates as affluent consumers taking in between $250,000 and $499,999 each year.
Likewise, wealthy consumers were 2.5 times more likely to agree that they think social networking sites such as Facebook and Twitter are a good way to receive exclusive offers.
“It’s obviously still not a time for extravagance,” Mr. Sacks said. “it is a time to really explain the rational justifications that people will use to support their purchases — quality, authenticity and value.”
Direct messaging can help drive revenue by creating a stronger bond of consumer loyalty.
Additionally, such communication could encourage consumers to be more proactive and shore up their holiday shopping plans on the spot. This point could be especially important as consumers continue to push back their holiday shopping later and later each year.
“If you contact a consumer the first week after thanksgiving, when they haven’t given it a lot of though and you can tell them that half hour on phone or hour in store will take care of shopping and make them feel special, that’s a winning formula,” Mr. Sacks said.
Messaging over direct and social media channels can also help brands effectively and discretely drive value purchases via lower prices.
A luxury brand that can drive promotions over channels such as Twitter and Facebook while maintaining the high quality of messaging stands to win big.
“There’s a risk when times get desperate and the end of December is nearing and lots of inventory is still on the floor,” Mr. Sacks said. “It’s tough and there is pressure to move product, but there’s a balance.”
“You can maintain the taste and nuance and subtlety most luxury brands stand for and not just go out there and scream sale,” he said. “There are ways to couch the message and still make it clear that discounts are available while keeping the brands image.”
Peter Finocchiaro, editorial assistant at Luxury Daily, New York