What Makes a Luxury Brand?

Talking about luxury brands is so fun because we all enjoy them so much! It’s part of the brand to make you feel like it’s luxurious, special, a treat, a status item, etc. Brands like Chanel, Louis Vuitton, and Prada may make women swoon, but luxury is not just about designer clothing and handbags! Luxury brands can be done for anything – peanut butter, and TV shows, coaching, perfume, cars, you name it! Any brand can become a luxury brand if you follow the principles I’m outlining here.

The purpose of a brand is to distinguish one product from another. It’s like we have shelves in our brain and we are trying to figure out how far up on the shelf a product belongs – does it go on the bottom based on a low price or at the top with all kinds of extras for affluent buyers based on their emotional and subconscious needs? When a brand targets the affluent in a particular way, it’s like the affluent hear the message and like a dog whistle, know it’s made for them.

If you’re an entrepreneur offering products and/or services, it’s easy to get caught up with what is the perfect price to charge? But let me ask you this, how often are you just shopping for price? If you’re shopping only because of price, you’re usually shopping at the dollar store! I’ll occasionally walk into a Dollar Store for fun, but it’s for very utilitarian things. If you’re shopping for price and a little style, you’re shopping at Target. If you’re shopping for medium price, style, quality, and service, you’re shopping at Macy’s or Nordstrom. If you’re shopping for style, quality, service and designer flair, then it’s Saks or Neiman Marcus. Do you see how each level adds an additional element? Many entrepreneurs unknowingly are acting like WalMart when they try to market to the masses. Is that the right market for your product? Usually it’s not. Usually you want to at least be Macy’s or Nordstrom and attract the mass affluent who can afford a quality product or service from you.

Using brand strategies, all products can differentiate themselves – even water! You have brands of water that give back to the rain forest,  or they are different types of water like spring water, sparkling water, flavored water, diamond water, etc. Take peanut butter – all brands appear to be the same until you say, “Choosy Mother’s Choose Jif.” Now you’re putting your peanut butter above all the other brands and appealing to women who identify with being good mothers – not just a mom but a really good mom! The message of the brand is: if you pay more for your peanut butter, then you’re a good mom!

Good branding sets you apart and above your competitors, but entrepreneurs don’t always realize, you have to crown yourself! A BMW is the “Ultimate Driving Machine.” It’s claiming to be the best by using the word “ultimate”. It’s brand has to have all the pieces that make it “ultimate” and not be a clunker just charging a high price. Everything has to be cohesive and work together, like the 10 parts I’m going to share with you.

I’m going to quickly review the parts that make a luxury brand:

1. Luxury brands are exclusive. The buyers want people to know they have the affluence to own an exclusive brand. They long to differentiate themselves and confirm their social status. It makes them feel special, unique, accomplished, and even rewarded for their success. Exclusivity can be about affording the best, or having a wealth mentor, or expensive lingerie.
2. Customers love the physical/functional attributes the product delivers or have a profound connection to the brand or brand story. Brands like perfumes, sports equipment, and cosmetics do this with celebrities. For mobile apps, people love the functionality of an Apple iPhone.
3. They portray quality in design and/or workmanship. A Patek Phillipe watch is still a watch, but it is hand made, limited in quantity, associated with things like polo that demonstrate status. It can also express their individuality. Jewelry that displays quality, wealth, and status.
4. The brand performs at an experiential level. Ralph Lauren has created a whole lifestyle around his clothing brand so you experience the preppy, polo, status lifestyle.
5. They have Pedigree – Tiffany has a long history of quality and status. As a business, you create pedigree with your reputation and story. You can still do this as a startup by transferring your personal story, experience, or work history.
6. Natural scarcity – handcrafted, expensive to afford, or limited in number. Not available to everyone. Starbucks hand makes your latte. Artists use limited editions. As entrepreneurs you can limit the number of clients you work with or limit your 1-on-1 time with clients.
7. An emotional connection to the customer distancing itself from mass market brands. Causes a subconscious response that is beyond the cognitive brain. By the way, did you know the #1 reason people buy a Rolls Royce or a Bentley? You might assume because they are handmade cars, or superior craftsmanship. No. It’s to reward themselves for their success. You MUST understand the emotional reasons people buy your products or you will be off target every time.
8. Lives in an environment of detail – store or website experience is detailed and unique. High personal service.
9. Associated with PR, media, celebrities, leaders. You don’t have to hire a celebrity to become a luxury brand, but you do have to be concerned with where you are advertising, who you are partnering with, what your videos look like, etc. Media appearances are third party credibility, but you can do the same thing with customer reviews and that can be powerful too. When I recently bought a headboard online, I read all the customer reviews to hear about the color, ease of putting together, etc. It mattered a whole lot more than being on the Martha Stewart show, so things are really changing with technology. Transparency is here!
10. Having a high perceived value and pricing appropriately high enough but not outrageously so. An unusual phenomenon occurs – demand can increase when the price increases! Yes, it’s been proven. People do associate price with quality. Recently I was looking for an imitation Christmas tree. I didn’t want to buy the too cheap ones for fear of bad quality. I wanted to pay more to get a better tree. They MAY have been the exact same tree! I tell you this to show how our brains think!

Don’t be shy to charge a healthy price!

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