The Laws Of Luxury Marketing In Architecture
Conventional wisdom suggests that architecture, as a category, needs to be marketed in a certain way. An outsider from the marketing space would readily identify what elevates it from other forms of construction and design in a general sense, but they would struggle to understand the nuances between firms when giving advice on strategy. The last eight years in the industry have taught me that there is nothing homogenous about this profession, and there are no rules for how to market it.
I've realised that some firms, whether they know it or not, are in the mass consumption business. Others are premium or super-premium, offering their clients perfection or know-how that objectively justifies a premium price. Lastly, there are the luxury brands, of which there are only a handful, who cater to the growing segment of ultra wealthy and offer them superlative works of art that deny comparison or reason - and demand sacrifice and initiation to the 'club'.
Interestingly, most architects, whichever category they belong in, see themselves as being, or having a duty to market like a luxury brand. The starchitects we admire and emulate, the Zumthor's, Ando's and Hadid's have created genuine luxury brands on par with Hermes or Porsche. Consequently, when we think about how we should build our brand, the luxury pathway is our instinct. It's how our heroes act.
The reality is that we can't, or shouldn't, all be luxury brands. All famous architects are luxury brands, but not all architects are luxury brands. The laws of luxury marketing can sometimes create commercial challenges, risk, anti-egalitarianism and ethical questions that should be considered. In reality, I am sure that you will find a number of strategies in this article deeply disturbing, as I do. But, they offer a fantastic insight into the mindset of truly iconic firms.
So that you can consider whether you want to be a true luxury brand, and what you need to do to get there, we need to understand how legitimate luxury brands are marketed.
For this, you need to read The Luxury Strategy: Break the Rules of Marketing to Build Luxury Brands by Jean-Noël Kapferer and Vincent Bastien.
I'll present and abridge their anti-laws of marketing for luxury brands, that is, marketing strategies that distinguish luxury brands from mass-market or premium brands. Most, or all of your favourite architects in the world are following these rules to the letter.
Forget about 'positioning', luxury is not comparative
Consumer marketing demands a unique selling proposition (USP) that has to be conveyed through the product, marketing and communication. Brands seek to define themselves by a key facet and the expectations of their target audience. Mass-produced brands fear undifferentiation.
Coca-cola is the real thing. Pepsi is the taste of a new generation.
Nothing is more foreign to this approach than luxury. Luxury is the expression of taste, creative identity - it makes a bold statement 'this is what I am'. Identity is not negotiable. The luxury brand doesn't lead the industry, or find a point of difference, it forgets that the industry exists.
Does your product have enough flaws?
Unlike luxury brands, upper-premium brands deliver a perfect product and relentlessly pursue perfection. A brand needs a touch of madness for it to be counted as luxury. A cheap Seiko watch keeps perfect time, a luxury brand will lose two minutes every year. The flaw is not only known, it is assumed. It's the charm and guarantee of authenticity. Luxury watchmakers like adding complications, indeed seek them out in the endless pursuit of art for art's sake. The flaw is a source of emotion.
Do not pander to your customers' wishes
A luxury brand will care about its clients and listen to them, but it will have a willingness to resist their demands when they do not correspond to the designer's precise vision for what makes a truly iconic design. Luxury brands aren't afraid to be seen as stubborn, difficult to work with, or defying reason and good sense if their brand's identity is under threat. BMW's customers curse each new 5 Series release for not giving enough rear passenger leg room, but BMW will not spoil the purity of the design of the car, and its proportions, by compromising.
The luxury brand comes from the mind of its creator, driven by a long-term vision. There are two ways to go bankrupt: not listening to the client at all, but also listening to the client too much.
Keep non-enthusiasts out
In traditional marketing there is an obsession with sales growth. In luxury, wider availability erodes the dream potential among the elite, among opinion leaders. For luxury brands, accepting that 80% of their target demographic isn't attracted to the brand's values is the norm. Instead of working to expand into other segments, they will exclude these non-enthusiasts from their strategy and do something else: brand growth is achieved by penetrating new countries, not new customer segments. Luxury brands, both in architecture and other contexts, are destined to work internationally for this reason.
Do not respond to rising demand
In mass marketing, the job of each product manager is to push up volume and increase supplies to match. If they fail to satisfy rising demand, distributors are annoyed, and unhappy customers will leave the brand and hold it against the company. They will take their revenge by gossiping over dinner about their bad experience: What an absolute scandal to have to wait!
As long as a customer understands the reasons that they have to wait, a luxury brand will become a master to resisting demand in order to be master of it. Hermes' CEO says "When a product sells too much we stop producing it".
A luxury brand must have far more people who know it and dream of it than people who buy it. Again, going global is a strategy for a local luxury brand to grow volume without damaging the dream value through market saturation. If global expansion is unsuitable, the brand will increase average price of their products and services.
Dominate the client
Luxury is a consequence of meritocracy. In a so-called classless society, access to luxury brands is decided on merit and achievement, no longer simply on birth. Everyone is looking for ways to haul themselves up - and luxury brands, or architecture, are a reward for gradual elevation. To preserve this status, luxury brands dominate their clients, while also respecting them. A parent dominates their child, while respecting them also. On the other hand, if they treat them as equal 'best buddies', they lose their aura and "profoundly disturb their offspring".
It's important to preserve a certain distance, that is not aloof, but maintains an aura of mystery. The luxury brand is an adviser, educator and guide in the domain of culture and taste, and should play the part.
Make it difficult for clients to buy
A luxury product has to be earned. The greater the inaccessibility, the greater the desire. Traditional marketing does everything to facilitate quick access to the product. Luxury brands know how to set up the necessary obstacles to the desire, and keep them in place. People eventually get to enjoy the luxury after passing through a series of obstacles - financial, needless to say, but more particularly cultural (they have to know how to appreciate the product), logistical, and chronological (wait two years for a Ferrari).
It is necessary to wait for a luxury product, as with anything even remotely sophisticated.
Protect clients from non-clients, or big from small
Too much 'openness' is harmful to a luxury brand's social function. Luxury brands are segregationist and forget society's democratic principles. Stores introduce a measure of social segregation: ground floor for some, first floor for others. Advertising is for all, but public relations are ultra-carefully targeted (personal invitations to meet the designer). In aviation, everything is done to ensure the first class passengers never have to meet other passengers.
The role of advertising is not to sell
What does luxury advertising look like? The product with a cryptic message. No commentary, no blurb, no sales pitch, no pricing. If you go to a Tag Heuer shop you are handed a thick book which talks about the brand's origins, finely tuned processes, the unique design of the various models. The Porsche dealer staff will talk to you about racetracks, road-holding, and whatever else feeds the myth of the brand.
In luxury, advertising is an ally to building the dream. Often times, it simply sustains the dream, since every time a flesh-and-blood human buys a luxury product, and it is seen in public, it destroys a little bit of the equity in the brand by increasing it's visibility.
Communicate to those you are not targeting
For luxury brands, it is essential that there should be many people who are familiar with the brand who could never afford to buy it for themselves. In traditional marketing, advertising must be efficient, targeting only those who can buy (otherwise investment is wasted). In luxury, if the public fail to recognise the brand, some of its value is lost. It is essential to spread brand awareness beyond the target group in a positive way, to build prestige without concern for efficiency.
The presumed price should always seem higher than the actual price
In the luxury world, where brands avoid comparison of any kind, price is something not to be mentioned. A top-class restaurant will not show prices on their menus, because choice of dish should not take price into consideration if it's truly a luxury experience.
In traditional marketing, brands will advertise a teaser price, with a full set of options bringing it up much further. In luxury, price is not discussed in order that the imagined price is higher than the actual price, creating value.
Luxury sets the price, price does not set the luxury
In traditional marketing, you try to find out at what price level there is room for a new product. In luxury, you come up with a product or service and see at what price you can sell it. The more it is perceived by the client to be a luxury, the higher it should be.
The consequence for selling is that your job is to help people understand the product, share the mystery, the spirit of places and objects, and the time invested - in order to explain the price. The client can buy later if they choose, but they must not be pushed.
Raise your prices as time goes on in order to increase demand
In the standard market model, when the price falls, demand rises. With luxury, the relationship is reversed, and price is a technical detail. If price becomes an issue in the classic price-demand relationship, we're no longer dealing with luxury. Raising price, and reinvesting these additional profits in quality and in advertising, will keep a brand in the world of luxury.
Luxury is beyond reason, and being reasonable. A price that appeals to reason appeals to comparison. By increasing the price of your service or product, you lose the bad customers, but you suddenly become dazzlingly attractive to people who would previously not have given your business a second glance.
Raising prices requires a permanent shift in vision. Global economic growth is creating thousands of new rich, and very rich people through the world every day. These people are looking for a way to reward themselves through the pleasure of the product, and a symbol of their accession to the 'club' of success.
Do not sell
If you raise your prices, you have to be prepared to lose customers. Most brands don't dare risk it, but those brands are destined for mass consumption marketing - which can also be extremely profitable, but definitively not luxury.
In luxury, not trying too hard to sell is a fundamental principle in relationships with clients. You tell customers the story of the brand and the product, the facts, but they will not be pressured to sign a contract there and then. The best way of reaching the well off is letting them come to you: consumers are attracted.
Cultivate closeness to the arts
In traditional marketing, brands follow people's tastes, designing in a way that will be as popular as possible. The luxury brand will be a promoter of taste, it is creative and bold. Luxury brands remain close to non-popular arts, those that are emerging and have yet to appeal to the majority. Luxury brands become patrons of emerging trends in other artistic disciplines. It is important to develop a curiosity about the here and now among those working in your firm and encourage them to visit art galleries, biennales and exhibitions of modern art: or go further to support this kind of work financially if you have the means.
Do not look for cost reduction
Creating value is the motto of luxury, but this must not come from cost reduction. It must come from added value. Luxury value creation does not rely on the talent of a director, but on each employee of the company. In order to systematically increase prices over time, you must instil the value creation process in the whole company.
Pricing is a decisive factor in bringing about a change of mentality within your company: systematically raising prices gives the whole team a sense of responsibility, as every person in his or her own way is constantly trying to find ways to create more value for the client in order to live up to the price.