DALLAS -- As the luxury travel industry has shifted in
recent decades, so too has the luxury consumer. A group that once valued
physical goods has shifted to preferring unique experiences and has grown more
appreciative of superior customer service and relationships with the brands
with which they choose to do business.
What the luxury consumer wants from those brands, and how
travel advisors can capitalize on that, took center stage at Signature Travel
Network's first Luxury Summit held recently at the Grand Hyatt DFW here.
"Today, luxury is more of a mindset," Milton
Pedraza, founder and CEO of the Luxury Institute, told agents in attendance. "It's
not a demographic. It's not a product. It's not a price point. You'll hear, and
I know you'll feel the same way, there's so much pressure, there's so much
change, technology, that really, time is the luxury."
Pedraza is a consultant and coach to luxury brands large and
small, and his institute has researched the luxury space for the past 16 years.
In that time, he said, he's found that affluent consumers
around the world feel that a luxury brand is most defined by the quality of the
product. That has remained consistent, but in the past five to 10 years, having
superior customer service has moved up the ranks, past things like superior
design and craftsmanship, and is now the second most important attribute that
affluent consumers feel define a luxury brand.
According to Pedraza's research, affluent consumers around
the globe are most motivated to purchase from a luxury brand if that brand
provides things like superior customer service, lifetime product guarantees or
free repairs, all things that indicate a brand's trustworthiness and
"You may be an expert, but if you're not trustworthy,
they don't see you serving their needs and their interest," he said. "They're
not going to go with you."
While a brand's history matters less to affluent consumers
today than it once did, that customer's personal history with the brand matters
greatly. More than half (59%) of consumers are more likely to purchase from a
brand with which they have an emotional connection.
That doesn't mean the Signature brand, Pedraza said.
Instead, the travel advisors themselves should seek to connect more deeply with
Photo Credit: View Apart/Shutterstock
Affluent consumers believe luxury salespeople should have
expertise in their product. Outside of that, luxury salespeople should also
seek to stay relevant and adapt their skills as industries and consumers
change. That way, they will avoid what Pedraza calls "expired experience."
As far as which luxury segments have the best salespeople,
41% of affluent consumers surveyed cited jewelry and watches, followed by
leisure travel and hospitality (35%).
"In no category of the luxury industry does the
majority of consumers say that the salespeople deliver a great experience,"
he said. "That's not good, but it's a huge opportunity if you will take it
and you will grab it."
It's especially promising for travel advisors. Luxury
consumers don't value goods as much as they value experiences, and consumers
are spending much more today on experiences than they have in the past, Pedraza
He advised agents to work toward alpha growth, the ability
to grow at a faster rate than the market itself. To do that, advisors should
conduct a rigorous review of their performance and the marketplace, then
collaborate and find ways to expand their network and make money off that.
Finally, he said, they should leverage technology and data to communicate
Pedraza also encouraged advisors to practice critical
moments, such as getting rejected by clients, for 15 minutes a day and to focus
on building relationships -- not necessarily selling, but earning trust.
At a media lunch at the Luxury Summit, Pedraza said the
luxury travel sector has undergone a democratization in recent years. Consumers
have more access to travel today as well as more choices.
"I also think that we've all kind of loosened up a
little bit, and so we like casual luxury," he said. "We're not into
the caviar and champagne as much, unless it's a special occasion."
Pedraza was the moderator of a summit panel featuring people
who work in luxury sectors outside of travel: Tom Kovach, executive director
and branch manager of UBS; Adam Steggers, head of Knot Standard Custom Menswear's
Dallas showroom; Gianna Cerullo, founding member of real estate sales and a
sales agent with Compass; and Halim Trujillo, founder and editor in chief of
Watch Collecting Lifestyle's website and magazine.
Each panelist was asked how he or she had seen affluent
clients change in the past several years.
Cerullo said her clients are more stressed than they've ever
been, with little free time, and Trujillo said they're also heavily influenced
by social media.
"Think about all of the content that is consumer-generated
that is shared on social media that is driving the desire and creating needs on
those who are affluent to buy more luxury goods, to travel to new destinations,
to go places where before they would have never thought of going," he
Clients today are more sophisticated and knowledgeable than
they were even five years ago, Kovach said. Luxury brands also have to do more
for their clients today.
Steggers emphasized that while the product is important,
luxury brands need to develop deep relationships with clients.
Signature president and CEO Alex Sharpe told advisors
that what constitutes luxury varies from person to person. It could be a high
price point, an over-the-top experience or experiences that aren't over the top
but are instead personal and unique.
"As we look at it and we continue to grow the luxury
business," Sharpe said, "the reason it's important to me is, yeah, it's
sexy, but more importantly, it's where you can differentiate. It's where we can
differentiate. If we're going to sell commodities to folks who can get them on
the internet for the same price and with maybe slightly less service, we're not
going to be successful in the long run."