With examples such as flagship-stores, loyalty programmes, birthday wishes and brand repositioning, the service world takes a growing amount of its inspiration from the luxury goods sector. How and why does this happen, and what are its limitations?
At a time when standardisation and outsourced call centres are the norm, Nespresso France has made a radically different choice in the area of customer relations by e-mail1 through personal replies to each of the 150 e-mails received, interactive FAQs and the use of a virtual helper on the web site. And all of this with immediate effect: instead of a 24-hour reply, response times of half a day and even two hours are becoming the set standard. This way of dealing with customer queries and complaints, based on attentiveness and the individualisation of answers, calls on the skills of 230 members of staff in its customer service centre in Lyon. And these measures are directly inspired by the codes of the luxury sector, a logical consequence of the business model invented in 1986 by Nestlé aiming to sell coffee differently.
Since this time a number of brands have repositioned themselves upmarket to reach levels of exception, such as the iconic Club Med, which in the last ten years has concentrated its activities around top-end hotels and holiday villages. Another example is that of agship stores for brands such as Nespresso, Nike, Apple and Orange, which is a new concept of stores that showcases the brand’s values, the only way to convey the customer relationship in our all-virtual era. Across the board, these brands have one aim: standing apart from other more generalist (and even low cost) brands which, through aggressive pricing, attract the passer-by who has had his bearings blurred and his pockets emptied by the economic slowdown.
The luxury service spirit, or personalising the service
Standing out above the rest can take a number of forms. “From the basic tenet that today everything can be bought on line, Printemps doesn’t offer its clients a simple range of products, but instead a unique purchasing experience through a specialist selection of fashion brands or accessories that the brand believes are the most creative or trendy on the market,” explains Eugénie Briot, in charge of the Design and Luxury Innovation master’s degree at Paris-Est Marne- la-Vallée university. For others, such as Air France, the fact that a customer tests low-cost services even once is an excellent advertisement for their economy class flights. In contrast to Easyjet and Ryanair, which transport more than they offer an air travel experience to their passengers, the French national airline can justify its higher prices through the attention paid to the service offered to its clients.” Where Printemps positions its added value to customers in the spirit of service and specialist ranges, Air France stands out through an on-board service which has its roots in the luxury universe more common to long haul flights in Business or First Class.
The luxury service spirit, or the customisation of the service, can be played out in a hundred and one different ways, some of them quite unusual. In the 1940s for example, the jeweller Van Cleef & Arpels employed two Bourbon princes in its New York shop. “Today, a valet service can be asked by a client to find a present for a wife who already has everything,” says Eugénie Briot. “The value of the service will be in how the valet company understands the personality and aspirations of this particular woman. Which means that it isn’t necessarily the price of the service which means the most. However, the spirit of service which comes from the luxury sector sometimes has a high cost to the company, which is included in the price of the service.” One of the principles of luxury is that the price is not open to discussion; it is considered as justified, and this is why summer and winter sales are such an aberration in the sector. This is a logic which leads the luxury sector to charge for services – such as Wi- in top-end hotels – when the same services are cheaper or even free in more general public brands.
Controling the expectations generated
“Given rising competition from the low-cost sector, most brands face the challenge of rebuilding their customer- perceived value,” adds Eugénie Briot. “But just because it’s dear doesn’t mean it’s a luxury. Only a few of the sector’s practices among the most expensive, can be successfully adopted by mass retail.” As long as they don’t become too commonplace: for example, sending birthday wishes, which was a practice made possible by shop assistants keeping notes on their customers, has now become generalised and even automatic because they are now sent electronically; this has made this particular form of attention much less effective.
The other limit is to think that the same codes of luxury are all shared by all the clientele. “Take the example of Disneyland Hotel, which gained its fifth star two years ago. The hotel attracts on the one hand guests who have broken into their savings to pay for a night at 1,200 euros a shot, and other people who are totally used to this level of service,” says Eugénie Briot. “If there isn’t anyone to carry the luggage to the room, the latter group will find this unacceptable, whereas the former won’t even think twice about it.” By trying too hard, it can be dangerous for a company to generate expectations that it cannot control. And so it may be easier and more effective to increase the value of services using the customer relationship as a vector. For example, giving meaning to banking advice through advisor-coaches who will be able to bring their clients better knowledge in the areas of financial services or life insurance, for example. Personal advice which is usually only found in private asset banking has its advantages.
Perceived value, priceless, therefore essential.
“What is special about luxury is a spirit of service based on the smallest of meaningful attentions, which do not have a price ticket on them and are therefore priceless to the customers who already have everything,” concludes Eugénie Briot. “Therefore perceived value isn’t necessarily proportional to cost of service, and could come from the human factor; this is one of the main lessons to be learned from the luxury goods sector.” This type of gesture can be replicated by other brands. And from public transport companies to banks, a wide range of services are attempting to bring meaning back to some very simple re exes, such as wishing a passenger a good weekend or serving a client a coffee when he arrives for an appointment.
Service and luxury: from product marketing to emotion marketing
A number of services have applied luxury codes to worlds which did not traditionally practice this type of attention. Beyond visible reference points, what has changed is the sentimental value connected to this type of offer: these brands have made us dream and created new references in areas such as coffee (Nespresso), mobile phones (Apple) and photography (Studio Harcourt) by going beyond the stage of product and entering the world of the experience. Behind this is a remarkable work on the brand, its capacity to generate additional perceived value. And to use attractive design too: these coffee machines and smartphones are beautiful objects, something which only used to be found in upmarket environments. Today, the beautiful object and the beautiful retail brand have become more accessible, in order to allow their creators to escape from a value- destructive movement: the commodification of offers. In other words, going from selling kilos of coffee to offering a tasting experience like no other.
Hotel Le Meurice, creating a memorable customer experience
As soon as they arrive in the company, staff members at the Le Meurice hotel, the standard-bearer of the Dorchester Collection hotel group, are trained to develop their know-how, personal skills and being comfortable in their work. These are practices only found in the luxury business: “We have also provided training to luxury goods companies which wanted to show their teams the particular attention afforded to customers and gain inspiration from our quality of customer contact,” explains Nicolas Grau, Director of Operational Services. “Our hereditary know-how and traditions of excellence, among which tableware and gastronomy, are things which give our client a unique experience and real emotion. Our customers do not leave our establishment with something tangible, they purchase an experience. We therefore have to pull out all the stops to make it memorable.”
This experience of excellence is something extended to children (who are offered trips around Paris or treasure hunts in the hotel) and pets which, apart from being walked in the Tuileries gardens by a groom, are also given medals with their name and can dine on made-to-order menus!
(1) the coffee aficionado club of the nestlé subsidiary received, for the second time in five years, the 2011 Qualiweb/Stratégies award for customer service by e-mail. (source: Stratégies n°1665, 09/02/2012)