Driving customer loyalty is a challenge no matter the market.

But, when it comes to the luxury market, are there different considerations?

Loyalty360 talked to Eastwest Marketing Group CEO Lou Ramery about this intriguing topic.

What challenges do companies face in driving customer loyalty in the luxury market?

Ramery: A major challenge is the lack of frequency … frequency from the perspectives of both purchase and relevant dialogue. Whether they are expensive timepieces, automobiles, cruises, jewelry, etc., the infrequency of purchase occasions often constrains luxury brands from engaging and maintaining highly relevant communications. These brands must find opportunities to increase the cadence of appropriate, personalized, and relevant communications.

Are these challenges inherently the same, or slightly different, from the non-luxury market?

Ramery: To a general degree, the challenges are similar. Across all markets, there are three key dimensions for determining customer loyalty:

(1) Consumers’ re-evaluation propensity: The frequency with which the consumer re-evaluates his/her position with respect to the category products and services.

(2) Level of category involvement: The degree of interest, passion, excitement about the category or service.

(3) Brand Commitment: The level of interest, passion, excitement, and emotional bond to the brand and the observed endorsement of the brand. However, the expectation of the brand’s ability to provide personal fulfillment, shared perspectives, and lifestyle alignment is accentuated to a far higher degree in the luxury marketplace.

What are companies in this market doing well and where do they need to improve?

Ramery: Many luxury brands have developed experiences via mobile devices, including branded apps that provide convenience and ease of interaction. The next important phase is going beyond product/service and connecting on a lifestyle basis. Rolex has done a fabulous job in moving beyond a timepiece or even a wearable fashion statement to aligning and sharing experiences. To that end, luxury loyalty programs should invest in and include experiences that would otherwise not be available to their members.

What role does technology play?

Ramery: Real-time technology enablement has become table stakes for POS integration, point accrual & redemption, beacons, app deployment, website content management, and campaign management. Additionally, smart data (a single 360-degree view of the customer), advanced analytics (predictive NBO), appropriately cadenced relevant communications and seamless delivery are requirements to enable unique, personalized, and consistent experiences.

What do you foresee as trends in this area?

Ramery: For luxury clientele, the focus will be in exclusivity and shared perspective, rather than points or rewards. To be able to deliver on unique and meaningful experiences, luxury brands will need to develop strategic partnerships with complimentary luxury brands in providing robust and relevant lifestyle occasions. Important to program economics will be to assign many of the top end experiences to an “unpublished tier.”

Rather than driving an expectation based on a contractual obligation, the surprise and delight occasions will be viewed as the brand’s understanding of and commitment to the member. Content will need to be co-created, inform, entertain, reflect common ground and support the underlining alignment between the member and the brand.

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