Creating Luxury Appeal for Any Brand

So why do many of us spend $55,000 and more on a luxury car that Consumer Reports says won’t perform as well as a much cheaper brand?

So why do many of us spend $55,000 and more on a luxury car that Consumer Reports says won’t perform as well as a much cheaper brand?

And what makes women buy that $40,000 Gucci crocodile handbag when, functionally, it does the very same thing as a $40 knock-off from Target?

According to my friend, Harlan Bratcher, who has been creating and defining luxury as a C-level executive for labels such as Calvin Klein, Armani and Reed Krakoff, it’s all about emotion.

“We don’t necessarily buy a luxury product because of how it’s made, or even its style, but more so because of how it makes us feel,” says Bratcher. “When you drive that $55,000 car, or carry an Hermès or Gucci handbag, consciously, but even more unconsciously, you feel you have achieved your aspirations, even if that aspiration is as simple as feeling good about yourself.”

As the lead personal shopper for Neiman Marcus in the early 1980s at the beginning of his fashion lifestyle career, Bratcher recalls helping women try on $15,000 gowns, watching them slumping as they looked in the mirror. After spending time getting to know them, and helping them feel beautiful inside and out, suddenly that $15,000 dress was worth even more.

If luxury is defined by how a product makes us feel, as suggested by Bratcher, then is it possible for any brand to become a “luxury,” or something for which consumers are willing to pay a premium?

According to the Merriam Webster dictionary, luxury means:

  • a condition or situation of great comfort, ease and wealth
  • something that is expensive and not necessary
  • something that is helpful or welcome and that is not usually or always available

Per the above definition, its seems a product or brand can call itself “luxury” if it makes consumers feel pampered, extravagant and exclusive.

Bratcher offers a different definition:

“A brand becomes a luxury when it becomes aspirational to the consumer. Aspiration can manifest in many ways, from elevated self-esteem, confidence and sense of self; to a personal statement you believe you deserve to make about yourself.”

While aspiration can traditionally be defined as our hopes, dreams and exquisite goals for life, its connection to luxury is taking on a new meaning in today’s consumer-driven climate. Luxury is not just about exclusive products that one in thousands might own. It is about the experience that elevates the perceived value of the product and brand.

“As CEO of Armani Exchange, my mission was to build a highly relevant experience for our customers that made them feel beautiful, energetic and happy, and in ways that helped them associate those feelings with our brand. One way we did this was to research our customers’ favorite music, and then play it loudly at each of our stores, creating that Friday night dance club feeling. Sales and customer loyalty soared.”

Beyond feeling young, urban and sexy from the purchases we make, today’s consumers are demanding a new sensation: altruism.

Research from both Cone Communications and Edelman shows that more than 80 percent of today’s consumers, from Gen Y to Baby Boomers, choose brands which can show the positive social impact they are having on the world. Aligning with social causes – not just fashion trends and glamorous living – is now becoming an essential part of branding for luxury brands in all categories – from designer apparel and vacation resorts to auction houses like Christie’s.

“Consumers today are seeking actualization in all they do, and they do this by finding purpose in their daily lives, from the deeds they do to the products they purchase, “ says Toby Usnik, Chief Social Responsibility Officer for Christie’s in New York City. “Luxury is now about a bigger brand statement than just the product itself. It’s about shared values, a higher purpose and a sustainable community.”

For Christie’s, Usnik has helped contemporize a 250-year old brand through new initiatives for giving back. This includes the creation of Bid to Save The Earth, a coalition charity auction on behalf of four leading environmental groups: Oceana, Natural Resources Defense Council (NRDC), Central Park Conservancy, and Conservation International. Over three years, this program earned several million dollars to support its causes, and substantially helped to further Christie’s profile as a luxury brand with far-reaching values.

While some might be tempted to up their price, bling their packaging and call their brand ‘Luxury,” the chances for successfully transforming a great brand to a luxury brand are greater if you follow these simple steps.

Create authentic experiences

  • Armani’s nightclub atmosphere was authentic and spot-on for creating a strong dose of the emotions that make us feel powerful, awesome and in a mood to shop.

Tap into feelings that matter

  • While feelings in a nightclub might be fleeting, especially when you wake up the next morning, the overall consistent feelings of belonging and self-esteem you can create with every shopping experience, service interaction, follow-up communications and events are what maintain a brand’s luxury status.

Preserve the Perception

  • Once you’ve broken out as a brand above the cluttered fray, its critical to maintain your sense of luxury. You can do this not just with exclusive experiences, and short product runs for really amazing items, but with your pricing strategies. As Bratcher and Usnik both suggest, lowering your price, or offering discounts, just reprograms the status of your brand and you may never get back the status you once had.

Engage Customers in Sincere Altruism

  • As Usnik says, long gone are the days when a company buys a table at a charity gala or donates here and there. Leading brands are putting a stake in the ground based on their values and communities. They have skin in the game — creating programs that support those values, having their employees volunteer for related non-profits, sharing their platforms with others committed to the same cause. Doing just that made Warby Parker a huge force in the eyewear industry, because its customers’ purchases give free glasses and vision to disadvantaged people globally.

Albeit trite and cliché to say, luxury is still in the eye of the beholder. But now more than ever, it’s in the heart, as well. Building a brand around authentic values and causes that make people feel they are one step closer to actualization, social and personal aspirations, will help elevate your brand in ways much more powerful than you can imagine.

What are the aspirations or hopes you can associate with your brand to secure loyalty and attract high-value customers? You don’t need to open up shop on Fifth Avenue in NYC to succeed. Instead, focus on the dreams, hopes and core values of your customers, and tell your story in a way that makes them want to be a part of it, and pass it on to others.

Bratcher sums it up:

“No one really needs luxury. It’s nonessential. That’s where the dream and mythology come in. And this is why my career has been about anthropology – making dreams for the moment – more than product lines.”

The Purpose-Driven Brand

Since the beginning of time to this very moment, we humans have been driven by purpose. Consciously and unconsciously, we seek meaning in our lives and the need to actively make a difference and leave a personal legacy of good when we move on from this existence. Jung addresses this in his Individuation process and so, too, do modern and past psychologists and researchers of human behavior drivers.

Since the beginning of time to this very moment, we humans have been driven by purpose. Consciously and unconsciously, we seek meaning in our lives and the need to actively make a difference and leave a personal legacy of good when we move on from this existence. Jung addresses this in his Individuation process and so, too, do modern and past psychologists and researchers of human behavior drivers.

Rick Warren, founder of The Saddleback Ministries, and best-selling author, discovered just how powerful our need and drive for purpose is when he wrote, “The Purpose-Driven Life: What on Earth Am I Here For?” Written in 2003, this book became the bestselling hardback non-fiction book in history, and is the second most-translated book in the world, after the Bible.

Today’s consumer seeks purpose outside of the traditional methods of religion, volunteerism, and random acts of kindness toward friends and strangers. Many of us, in fact most of us, seek to further our sense of purpose with our choices at the grocery store, online shopping carts and more. According to research by Cone Communications and Edelman, consumers in the U.S. are more likely to trust a brand that shows its direct impact on society (opens as a PDF). Others, upwards of 80 percent, are more likely to purchase from a company that can quantifiably show how it makes a difference in people’s lives—beyond just adding to the investment portfolio of a very select few.

According to the Merriam Webster dictionary, purpose is defined as:

: the reason why something is done or used
: the aim or intention of something
: the feeling of being determined to do or achieve something

Consumers are not just expecting big business to define a social purpose for the brand, they are demanding it by how they are making purchasing and loyalty choices. Edelman’s “Good Purpose Study,” released in 2012 and covering a five-year study of consumers worldwide shows:

  • 47 percent of global consumers buy brands that support a good cause atleast monthly, a 47 percent increase in just two years.
  • 72 percent of consumers wouldrecommend a brand that supports a good cause over one that doesn’t, a 39 percent increase since 2008
  • 71 percent of consumers would help a brand promote its products or services if there is a good cause behind them, representing a growth of 34 percent since 2008
  • 73 percent ofconsumers would switch brands ifa different brand of similar quality supported a good cause, which is a 9 percent increase since 2009

Another research group, Cone Communications, showed that 89 percent of consumers are likely to switch brands to one that is associated with a good cause if price and quality are similar; and 88 percent want to hear what brands are doing to have a real impact, not just that they are spending resources toward a cause.

This new state of consumerism doesn’t just show people still have a heart and soul, it is a big flag to brands in all industries to integrate CSR or Corporate Social Responsibility into their brand fiber, customer experience and marketing programs.

I interviewed William L. “Toby” Usnik, Chief CSR Officer for Christie’s in New York City, who maintains that CSR has moved far beyond writing a check and then emotionally moving on from a cause or community in need. It is about a brand’s purpose being bigger than developing its return to shareholders. Validating Usnik is a recent article published in the March 21, 2015, edition of The Economist, quoting Jack Welch of GE fame as saying “pursuing shareholder value as a strategy was ‘the dumbest idea ever.’ ” While that might be debatable, it is becoming less and less debatable, per the statistics above that show how defining a brand’s purpose in terms of the social good it delivers to communities related to its business is anything but “dumbest”—and rather, is getting smarter and smarter by the day.

Charting new territory in his role as Chief CSR Officer for Christie’s, Usnik’s first step was to define CSR as it relates to human psychology and the values of the Christie’s brand. For Usnik, it starts with building a brand’s purpose around Maslow’s hierarchy of needs and helping your constituents get closer to self-actualization, or that state of reaching a higher purpose for a greater good.

“Moving customers upwards through Maslow’s hierarchy of needs is critical to address,” says Usnik. “Customers of all ages, and especially Millennials, are moving toward a state of self-actualization and looking to define their purpose and place in communities and the world. They seek relationships with brands that are doing the same within their own value set. As a result, any business today needs to ask itself, ‘What is the impact of our activities on each other, the community, the workplace, customers and the planet?’ “

Defining your brand’s purpose and corresponding CSR efforts is the first step to developing emotional and psychological bonds with internal and external customers. When you make your CSR actionable by engaging others in your cause, you can build passion and loyalty that not only define your brand, but also your profitability. Coke defines its brand through its happiness campaign that involves delivering free Coke and other items, like sports equipment and toys, to villages around the world, and through water sanitization programs.

Tom’s Shoes, an example that is known to most as one of the pioneers in philanthropic branding, went from $9 million to $21 million in revenue in just three years by being a “purpose-driven brand” that enables people to give back to others simply by making a purchase. With a cost of goods sold of $9 and a sale price of more than $60, that is not hard to do.

At Christie’s CSR, is a big part of CRM. According to Usnik, Christie’s helps many of its customers sell high-value works of art. Many customers then donate the proceeds to social causes that align with their personal values or passions. By helping customers turn wealth into support for charitable causes, they actually create strong emotional bonds with customers, rooted in empathy and understanding—which is far more critical for securing lifetime value than points and reward programs.

In just 2014, $300 million in sales were facilitated through Christie’s that benefited non-profit organizations. Additionally, Christie’s regularly volunteers its charity auctioneers to nonprofit events. And in 2014, he estimates they’ve raised $58 million for 300 organizations.

The key to successful branding via CSR programs and purpose-driven strategies that transcend all levels of an organization and penetrate the psyche of we humans striving to define our role in this world is sincerity. Anything less simply backfires. Brands must be sincere about caring to support worthwhile causes related to their field, and they must be sincere when involving customers in charitable giving.

Concludes Usnik, “You can’t fake caring. If you pretend to care about a cause you align with, or a cause that is important to your customer, [you] won’t succeed. Caring to make a difference must be part of your culture, your drive and your passion at all levels. If you and your employees spend time and personal energy to work closely with your customers to make a difference for your selected causes and those of your customers, you are far more likely to secure long-term business and loyalty and overall profitable client relationships.”

Takeaway: The five primary drivers of human behavior, according to psychologist Jon Haidt of the University of Virginia and author of “The Happiness Hypothesis,” are centered around our innate need to nurture others, further worthy causes, make a difference in the world, align with good and help others. When brands can define themselves around these needs, we not only influence human behavior for the greater good, we can influence purchasing behavior for the long-term good of our individual brands. And per the Edelman research, 76 percent of customers around the world say its okay for brands to support good causes and make money at the same time. So define your purpose, build your plan, engage your customers and shine on!