How Not to Lose 90 Percent of Your Customers
Here are a few amazing statistics from the Luxury Institute:
- Most luxury brands lose 80 to 90 percent of their customers in a given year.
- Luxury brands are hard pressed to retain 50 percent of their most loyal customers.
- Less than 15 percent of luxury customers claim to have a relationship with a sales professional.
Let’s translate the loss of up to 90 percent of luxury customers in a given year to kitchen and bath showrooms. It’s not a hard stretch to state that most showrooms have the potential to lose up to 80 to 90 percent of referrals from existing customers in a given year if they fail to deliver an experience that their consumers expect from a high-end showroom. The Luxury Institute points out that there is a tremendous upside opportunity for high-end retail. Customers who have a genuine relationship with a sales professional typically will buy double from that brand and be loyal to that brand for a longer period.
As BKBG Conference Workshop Leader Bob Phibbs (The Retail Doctor) points out, you can’t sell luxury products without first selling yourself. There’s a reason why someone makes an effort to visit a showroom, and it’s not to determine how big of a discount is being offered. The reason why 90 percent of customers don’t return or provide a referral is that the sales professional failed to develop a meaningful relationship. Phibbs offers a four-step strategy to avoid that outcome.
- One-size-fits-all approaches do not work. Showroom customers are similar to showroom products. They stand out from the crowd. They have stronger personalities and are more self-assured. A customized approach is required for each customer.
- Determine customers' personality types and craft stories that resonate with their world views. Don’t dawdle on Driver types. Get to the point quickly because they can recognize best-in-class products rapidly. Provide data and information to Analytics (explain why a custom cabinet is best suited for their project or why a PVD finish will last a lifetime.). Expressive customers will be more attracted to original designs as opposed to knockoffs. Amiables want to know best-selling products and which neighbors and celebrities have purchased them.
- Learn to deal with smartphones. During the sales process, there’s better than a 50 percent chance your customers will use their smartphone. How have you trained your team to deal with that?
- Look for tells. Notice the cars that customers drive when they pull up to the showroom. What does wearing a Rolex watch signify? Check out clothing and accessories as well. Regardless of the budget someone might state, what they are wearing and drive may be a more important indicator of budget potential. Luxury consumers want to interact with sale professionals that understand and can speak to the luxury mindset. That’s why selling through the sales professional’s wallet will never establish relationships that result in a referral or repeat business.