Luxury Lifestyle Marketing defined
Luxury Marketers Can Transit From Instinct To Info-based Decision-making
by Richard Baker, Yesterday, 5:00 AM
Marketers of goods and services for high-net-worth households (top 2% income, 1% of assets) have historically operated on the instinct of their founders or designers. But as the economy presents new challenges, as competition increases, and as leading competitors become publicly owned, reliable information and systematic decision-making processes are required.
One approach is Lifestyle Marketing, the strategy of appealing to the pattern of underlying values (personal drivers) and tangible benefits (attributes) that create harmony in a target Life Style segment. The Lifestyle Marketing process involves a series of nine steps, the first four of which are summarized here.
- Defining the lifestyle of the target consumer
Lifestyle is a better tool statistically for segmenting affluent consumers than everything except gender. It is more likely than age, income, education, zip code, etc., to predict what affluent people will do and why. Targeting a Lifestyle, rather than a demographic, provides a more detailed definition of the best prospect, how many, why they buy and specifics about how to reach them.
- Project the desired results
Lifestyle segments are statistically projectable to the affluent U.S. population, especially the hard-to-measure top 5%. If a brand has a goal of achieving a certain share of market at a certain price point, it can break that into shares of specific Lifestyle segments. This step allows the development of budgets, projecting marketing ROI, etc., to form the basis for making decisions about advertising, communications, distribution, channel support, and the other tactics in the marketing mix.
Lifestyle segments have clear priorities regarding which values (personal drivers) they are interested in satisfying. Some luxury brands refer to priorities as “passions.” A brand can compare alternative positioning within a Lifestyle segment to determine which of the high priority drivers (passions) it can be most competitive and successful in satisfying. For example, Lexus focused on satisfying the personal drivers associated with “practical” and “avoiding social discomfort” whereas BMW competes on “makes me feel good” and “performs as intended.”
- Product and service differentiators
After deciding on the personal drivers, the marketer must decide which tangible product and service attributes provide proof that the needs will be satisfied. Again, the importance of these attributes varies by Lifestyle. This step would be very important in marketing any activity, such as travel, which has a cultural aspect. For example, each Lifestyle places a different priority regarding the relative importance of culturally related activities when traveling.
- Developing an integrated multi-channel strategy
Today most consumers, even the most affluent, shop multiple channels. But luxury brands are often tentative about developing multi-channel strategies. There is a concern that marketing in the more direct channels (catalog, internet, direct sales, etc.) will create confusion or lower the perceived prestige of the brand.
- Word of mouth
Recommendations from peers and family are the greatest influence on all Lifestyles. The principle communication question, then, is “how to create positive word of mouth.” The answer varies by Lifestyle with some more influenced by publicity and editorial than by advertising.
- Relationship building
Many premium brands are already shifting more money into “non-traditional” modes that emphasize creating links with many aspects of an affluent consumer’s life. For example with non-profit organizations the affluent cares about. Involvement with these organizations (we call it “social networking”) creates access and intimacy.
Lifestyle Marketing provides real personalization in direct marketing. Customers in a ZIP plus four do not have the same motives for consumption. (We say ZIP is worth zilch: Birds of a feather do not flock together.). Marketers need a database, which identifies the Lifestyle of each individual household in the most affluent areas to target messages to the personal drivers and preferred attributes of each recipient.
Finally, after a Lifestyle Marketing strategy is developed, the marketer can check to ensure that there is alignment of all elements in the marketing process. Only a research-based framework can guide decisions at each step of the marketing process.