An article written by Jukka Aminoff who is the author of Luxury, Buying Revolution, and Social Selling Luxury.
Luxury services are about ultimate customer experiences - every single detail counts.
The luxury service market is growing, according to Bain, the global luxury industry will grow 5 percent annually. This also means that the luxury experience market is growing as well. Many luxury brands are investing in hospitality because people are searching for experiences. Therefore hotels, spas, restaurants, clubs, lounges, bars, events, cruises, music concerts, private events and others are quite lucrative for entrepreneurs and startups. However, it is quite effortless to create luxury products because they have to achieve different definitions. In contrast, creating a luxury service is more challenging because there are so many touch points, which have to reach the luxury level. Customer experience means that a company develops every single touch point, which is in contact with customers directly and indirectly. For instance, it is quite typical for inexperienced entrepreneurs to offer too many services and touch points, which they cannot manage properly. Therefore, less is more. Entrepreneurs should evaluate, which touch points are vital and necessary for the business in order to create unique and unforgettable customer experiences. When a business has discovered these touch points, then it must develop rapidly every single touch point in a very radical way to achieve the required luxury level and move beyond. Hence, luxury is about small details, and most businesses are not accurate enough with small details, which are the main keys in order to amaze customers. When it comes to new luxury services, new startups must discover ultra-niche markets, which have not been exploited by incumbents. It is harder to compete against a business, which has dedicated itself to serving a niche market. But here comes the most difficult part. Is the niche market profitable enough? Are there enough customers, who will pay for the service every single year? There is a danger that the niche market will be for one-time customers, which means that every single sale will make the market smaller, and the life-cycle of the business will become shorter. Therefore, new business ideas must be sustainable ones. Some sort of flexibility is important because in 2017 according to Statista, 57.2 percent of Millennials have said that they are willing to pay more for personalized high-end and luxury items, 35.2 percent said maybe and 7.6 percent said no. Personalization is important since it also gives room for required maneuvers for the business itself, because otherwise the market size might be too small. At the same time, it is important to remember that personalization must not mean that it will make buying more difficult. Here comes the challenge. How to give personalized services and how to maintain customer experiences high when a company is practicing selling? Therefore, every single touch point matters in the customer's journey - from ordering to consuming.