The premium client. That customer who doesn’t care about price as long as they have an exclusive product. That client capable of awakening the low passions of any marketing department. Capturing the premium customer is reaching the Olympus of marketing…. or not? In reality, the premium client is still a specific type of client with specific needs and, in general, quite predictable. In fact, premium brands are not among the biggest spenders on marketing, since it is a type of client that is usually quite faithful. Of course, these are very well developed brands in terms of their attributes to make the customer feel special, which is exactly what the premium customer is looking for. Distinction above all. You only have to take a look at the to see that many of the brands dedicated exclusively to the premium segment are among the top 100. The premium segment is, without a doubt, the segment of the vanity. In most cases, these are aspirational products, in which the high price does not respond to their quality (which they have) but to a ‘barrier effect’ to prevent the brand from becoming too popular. The case of smartphone manufacturers is paradigmatic: Not so long ago (which is still the queen of the premium segment) doubled the price of its products compared to its competitors. Today, we find products from other manufacturers such as Samsung that are equal in price to the most expensive iPhone,
How to attract a premium client?
There are two possible strategies: a) Have a premium segment within a broader range of products. It is what Samsung does, but also the most popular car manufacturers. In an economy of scale system, it is the most profitable when manufacturing a product, but they suffer the penalty of their own brand. The premium customer does not feel comfortable with a popular brand, even if its features are superior. This often forces the creation of different marketing channels so that these products reach this type of customer and are capable of fulfilling their aspirations. b) Create a specific brand. This is what Toyota does with Lexus, Volkswagen with Audi or LVMH, the largest conglomerate of premium brands in the world, owner of both L’Oréal (popular brand) and Givenchy (premium brand). This increases marketing costs (not necessarily manufacturing costs, it’s just a matter of labeling and packaging) but allows each brand to be endowed with specific attributes designed to attract specific targets. The premium client is the clearest exponent that price is not always the most important thing. Furthermore, this type of customer trusts the expensive product by definition, and is the one who suffers least in times of crisis. It has had to learn it the hard way: while its divisions dedicated to the general public (Hipercor, Supercor, Xfera) have been seriously damaged by the crisis, its sales in premium segments such as cosmetics have not suffered as much. Entering the premium customer segment requires a very significant initial investment in marketing, which is the main barrier for most companies, since brand positioning is much more expensive. On the other hand, once inside the competition is less and customer loyalty is very high, which in the medium-long term represents a significant reduction in marketing costs. Apart from that investment in marketing, we need to have an aspirational product, something that is not designed for the masses and that, if possible, defines a social or work status (something like that happened with BlackBerry until Apple stole the throne). Apple is a separate case within the segment, since has managed to sell like hot cakes a product that, in principle, has all the attributes to attract the premium customer (price, design, brand, own ecosystem, exclusivity, very short range of products). This is mainly due to the fact that it is an aspirational product that, being expensive, is not unaffordable. That’s why we see thousands of iPhones on the street and not thousands of Porsches or Ferraris. Now Apple tries to repeat the game with it but its competitors have learned and have associated themselves with top Swiss watch brands to face it, for example The trick is to put the brand above the product, and in making it clear from the beginning that your brand is exclusive. The premium customer is very demanding with the services provided: impeccable customer service, taste for fashion and technology… but above all they need to be feed your ego. And of course, the points of sale, both physical and online, must respond to these attributes. All this is tremendously expensive to start with, but very profitable if you get it. It is not in vain that Apple is the brand in the world with the most cash in your accounts. Whether or not to bet on this segment depends on the investment capacity of the company that tries it.
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