Targeting Like a Luxury Brand - Markus Kramer
4776
post-template-default,single,single-post,postid-4776,single-format-standard,ajax_fade,page_not_loaded,,qode-title-hidden,qode_grid_1300,qode_popup_menu_text_scaledown,qode-child-theme-ver-1.0.0,qode-theme-ver-10.0,wpb-js-composer js-comp-ver-4.12,vc_responsive
Targeting like a luxury brand

Targeting Like a Luxury Brand

Conventional marketers are measuring the right things with the wrong measurement instruments. The severe addiction of judging performance by traffic, ratings, online engagement percentages, followers and conversion rates is becoming almost preposterous. The management consultant and one of the greatest statisticians of all time William Edwards Deming stated that: “The most important things cannot be measured.” The way a brand manager defines measurement affects their business model. Certain niche brands demonstrate a business model that differs from conventional models by continuously learning meaningful lessons from luxury brands. What are these lessons that turn out to be useful over time for targeting – for all brands, and across all sectors? Why are particular niche brands – despite not having enormous budgets – thriving when it comes to marketing?

One reason why certain niche brands thrive today is because they learn what and how to measure from luxury brands.

The reason why certain niche brands thrive today is because they learn what and how to measure from luxury brands. They learn measuring like a luxury brand. The predominant principle that these niche brands borrow from luxury brands is the Quam Bene non Quantum. This principle makes way for the strategy being focused on quality over quantity. In other words, the measurements and analytical conclusions of managers are restrained from being dominated by numbers. But how does it work on an operational level?

One of the ways this expresses operationally is focus. These brands do not target everyone. Instead, these brands choose to target a very specific segment that needs to be reached and attracted. The rest of the segments follow as a chain reaction. The segment that they usually target has very clearly defined and distinct characteristics. These characteristics can be derived from in-depth psychographics studies that reveal the lifestyles, attitudes, value systems etc. of a given consumer segment. This is evident in the fact they are more concerned with ‘who are we reaching?’ as opposed to ‘how many are we reaching?’ with their investments in marketing and promotion. Taking into account that quality is among the values that are valued the most by the targeted segment. An expression of alignment with Quam bene Non Quantum principle.

Identifying what segments of early adopters and key influencers need to be targeted is the most important qualitative step to take. Key influencers for niche brands are more valuable than any popular influencer. They are fully aware of the fact that sometimes having only a hundred early adopters or key influencers as, say, Twitter followers is worth a hundred thousand random followers. This is particularly because the managers behind these niche brands have mastered the intricacies of word-of-mouth marketing. Though with a much smaller budget than any FMCG brand, some of the niche brands have found a way to access the viral spiral. How? By learning the principles of brand management from luxury brands – consciously or not. One of the principles is about how you don’t have to be a luxury house to sell high quality products. You don’t have to be a high luxury empire to be able to provide fine quality service. The niche brands that learn from luxury brands know that fundamentally great service costs nothing and it sells itself. They target like a luxury brand.

You don’t have to be a high luxury empire to be able to provide fine quality service.

Some of the most widely known examples of such niche brands that proved to be successful over time are: Moleskine, Barbour, Harvard Business Review, Red Bull, National Geographic, Apple etc. The one thing these high quality niche brands have in common is the accurate qualitative segmentation that makes way for strategic targeting. Their shared denominator is the fact that each brand turns into a ‘small monopoly’. It is important to clarify that not all niche brands have managed to do that. However, all high quality niche brands have found ways of continuously learning from luxury brands. All niche brands that learn branding principles from luxury brands pass the test of time.

Let’s focus on the Moleskine case study. On a qualitative level, what Moleskine created was more than just a notebook. The segments that it attracted were the artists, thinkers, writers and members of the international intelligentsia. The brand evokes an earlier era of the European arts scene that consisted of segments as haute bohème writers, hommes des lettres, the literati etc. The main competitive advantage of this niche brand was its distinct plainness, associations with certain intangible values that particular segments could identify with, the lifestyle fit, and the quality of the cover and paper. It gradually became a trusted companion of travellers, adventurers and discoverers outperforming the competing notebook brands. For instance, it had €128 million in sales in 2015 – €30 million more than the year before.

The search and the demand for quality is increasing. We are witnessing the re-birth of the economy of qualities.

So learning from luxury brands the principle of Quam bene Non Quantum is not only about product development. It is also about targeting, segmentation, tone of voice and positioning strategies. The search and the demand for quality is increasing. We are witnessing the re-birth of the economy of qualities. Especially for the last decade we see how the need for quality is rising partly because of the growing criticism on mass production, choice clutter, lack of uniqueness and over-industrialization. In an era when quantity is trying to silence quality, certain segments of consumers begin demanding and advocating quality to preserve it. Whilst I value and welcome technology and indeed use many analytical tools myself from GA to Insights, all the signs show that targeting like a luxury brand has been, is and will continue being a profitable strategy to apply.

References: