HOW TO CAUSE CUSTOMERS TO FORGET ABOUT PRICE. In 2022, Bernard Arnault was the world’s wealthiest individual. In 2023, he is ranked number 2 behind Elon Musk. Arnault is the Chair and CEO of LVMH – Moët Hennessy Louis Vuitton, the […]
HOW TO CAUSE CUSTOMERS TO FORGET ABOUT PRICE.
In 2022, Bernard Arnault was the world’s wealthiest individual. In 2023, he is ranked number 2 behind Elon Musk. Arnault is the Chair and CEO of LVMH – Moët Hennessy Louis Vuitton, the world’s largest luxury goods conglomerate. LVMH owns Dior, Fendi, Gucci, Chanel, Celine, Bvlgari, Marc Jacobs, Sephora, Hermes, Moet, Hennessy, and many more luxury brands we all know. The turnover of LVMH in 2022 exceeded 80 billion euros, up 23% from the previous year.
The success of LVMH has been attributed to many factors, including the determination and brilliance of Bernard Arnault. The brilliance of Arnault and his team has been reflected in a capacity to cause customers to forget about the price. Causing the customer to forget about price can be a powerful strategy for maximising profits, not just in the luxury goods market. So, how do LVMH help customers forget about price? My research suggests that this involves creating an intoxicating customer experience, which in turn involves, among other things:
Brand Image and Prestige. Brands have a distinctive image and reputation for exclusivity, craftsmanship, and luxury, leveraging long-standing heritage. LVMH articulates an aspirational lifestyle that captivates consumers, making them less price sensitive.
Exceptional Product Design and Quality.
Brands have exceptional design, attention to detail, and superior craftsmanship. When consumers recognise and appreciate the quality and uniqueness of the products, they may be more willing to overlook the price and focus on the overall experience.
Experiential Marketing and Emotional Connection.
Brands invest in strategies that create emotional connections – showcasing the brand’s story, heritage, and lifestyle associations. Focusing on emotions and creating memorable experiences shifts the consumer’s attention from price to the intangible value and prestige associated with the brand.
Limited Availability and Exclusivity.
Brands leverage’ limited availability’ and exclusivity, releasing limited edition collections that create a sense of scarcity, making consumers perceive the products as more valuable. The price can become less critical when something is perceived as rare or hard to obtain.
While most brands will not be competing with the likes of LVMH, there are things all businesses can learn from this fantastic business. To reduce the focus on price, embrace the power of image and perception, the importance of quality and craftsmanship, the importance of emotional connections and the power of scarcity.
To help your customer forget about price, or at the very least relegate it to a secondary consideration, create a product, a brand and an experience that engages and consumes customers. Many businesses can and should be doing this – but very few are.
D. John Carlson – Marketing Consultant Perth.