Selling luxury goods in a tough economy

BY PETER SCHOR
Showroom specialist

I know that these tough economic times are challenging for you and your families. Most of us have downsized our budgets and spending, yet the market for high-end luxury goods is still going strong. One might assume that downsizing for the average consumer might mean not purchasing a new auto. For the wealthy, as an example, the price of a Ferrari is about $200,000, and the fact that the Italian automaker is only 4% down proves that even in these tight times the luxury market lives on.
Take a good look at airports and travelers going to exotic destinations and walk the upscale luxury mall or stores, and you will see people buying luxury items. There are around 15 million very wealthy, affluent households in the U.S. A large percentage of them are Baby Boomers between the ages of 46 and 68. Today’s affluent consumers are extremely busy; two of their biggest desires are:

• Saving time and effort. “Technology is the ultimate luxury” is an understatement. Shopping on the Internet to decide what to buy before visiting a showroom or buying online happens. So I advise you to stop fighting this trend and put up a great website.

• One-stop shopping. You need to have more “completeness” in your showroom offering.

Don’t let the economy be your excuse. Use the down economy as a warning and motivation to work harder and smarter. As the saying goes, “When the going gets tough, the tough get going.”

Real-world tips for selling luxury

• Find affluent buyers in your market who are less affected by the economic downturn. Think about where these affluent people hang out and find out the best vehicle for reaching them, i.e. the opera, ballet, country clubs, art galleries, day spas, etc.

• Sell the benefits that your products represent — reduces stress, feels better, improves health, offers a safer existence — rather than the products themselves. Luxury is not the “product” but the buyer’s “experience.” Creating experiences and making consumers feel that having enough money can buy what they want will increase your profits. Showrooms are not a bunch of faucets on mounting blocks on the wall; they are faucets in glass jewel cases. Visit The Wholesaler website (www.thewholesaler.com), click on Archives and go to my October 2008 Showroom column, “Creating the experience in your showroom.”

• Sell beyond the features/benefits bullet points of a product. Potential buyers need to hear emotionally charged stories connected to the product; stories that make them feel something, like “I need that.” In tough times, emotional appeal is king and queen.
• Build relationships and trust. People who buy “luxury” look for specialized, personal service and crave the attention that goes with their purchases. You won’t find this experience by walking the aisles of The Home Depot.

• Sell a luxury product. Many fashionable items today are disposable and not made to last. People are willing to pay for excellent quality; quality never goes out of style. Sell the products with confidence, courage and certainty. Adopt a positive mental attitude and stay positive and upbeat. An industry friend, a director of showrooms for a plumbing wholesaler, told me, “My competitors are so busy buying in to the fact that selling could be particularly difficult in this climate. They portray this fear to clients, ending up overselling, apologizing for the high price or discounting like a street vendor. They kill the sales of luxury items to their clients.”

• Before seeing a client, ensure that your head is clear of negative market news. Go to Archives at www.thewholesaler.com and read my November 2008 Showroom column, “Your attitude will control your altitude in these economic times” and “A check up from the neck up!”

• Be Internet and technology savvy. Most affluent consumers will research the Internet before coming to your showroom. You must learn how to sell against e-commerce sellers and how to entice the consumer with your website.

• Be more creative when marketing and advertising your showroom. Tap into professional interior designers (ASID/IIDA). Affluent people who buy luxury goods hire designers to create their “experience.” Have a fun open house in your showroom. Get creative! Have a palm reader and massage therapist doing reflexology for the guests.

• Combat the reluctance to buy luxury by appealing to a different emotion. Try patriotism; prosperity is money in motion. Convince buyers that they can save jobs, stimulate the economy and enjoy their purchases, all at the same time.

• Sell value by differentiating your services. What is value? The truth is that value, like beauty, is in the eye of the beholder. Every sales professional must find out exactly what the prospect values and ask the questions that reveal what he or she actually wants.

To decision makers, we often appear to offer the same products and services. A commodity is defined as a product or service with no discernible differences, one that is available from multiple sources. Your prospective customers may be busy commoditizing your solution, in which case you must be differentiating it. The bottom line is that, unless you can create a powerful and distinct difference to the customer, your product or service will not stand out. Set yourself apart from the competition by differentiating in the following areas: price; relationship; process; technological, experiential and marketing knowhow. This is all about creating a better “experience” for clients and, most of all, for affluent buyers.

Peter Schor, president of Dynamic Results Inc, is a bath/plumbing industry speaker, educator, author, columnist and consultant in the many segments of our industry. For the past 20 years, he conducted seminars and speaks at numerous conventions. Schor has great expertise in the field of showrooms and hotel bathrooms and has won many industry awards. He also consults manufacturers in taking their products to market in the areas of sales, marketing and public relations. Schor can be reached at 1302 Longhorn Lane, Lincoln, CA. 95648, phone 916/408-5346, fax: 916/408-5899. e-mail pschor@dynamicresultsinc.com or visit his web site: www.dynamicresultsonline.com.