Attracting Premium Customers: Strategies for Success
Boost your brand image and customer lifetime value using the acquisition strategies in this post to identify, target, and attract premium customers.
POST UPDATED:
March 2, 2024
A premium brand strategy requires meticulous attention to detail—quality over quantity, luxury brand storytelling, and a personalized customer experience.
However, many businesses, even those with large budgets, overlook an important step: identifying the "pre-premium" audience within their existing customer base. These people have the potential to become your most loyal, high-value premium customers, but they need a nudge.
This post is for marketers and company executives who want to use data-driven customer acquisition strategies to build a premium brand.
The power of hyper-personalization: A key statistic
In a recent study, 62 percent of consumers said they expect brands to provide personalization and wouldn't remain loyal without it (Source: Forbes).
Luxury brands use hyper-personalization techniques that go far beyond the standard tactics used in mainstream product or service marketing. Personalization is a key component in exclusivity marketing. It's a process designed to provide experiences that build an intimate connection based on the consumer's desires, preferences, and lifestyles. This is where luxury brands excel, making their high-value clientele feel catered to, known, and valued.
Companies considering a premium brand strategy can learn from their luxury counterparts as they seek to identify "pre-premium" customers.
Let's look at an example.
Creating a sense of exclusivity: NET-A-PORTER
NET-A-PORTER
NET-A-PORTER, a high-end fashion brand, makes every touchpoint in the brand experience feel curated explicitly for their ideal customer:
- Purchase-driven suggestions: The company uses an algorithm that analyzes each customer's shopping history. This data allows them to provide highly relevant recommendations—not just new products but items that align with customer tastes.
- The power of the wishlist: NET-A-PORTER uses the wishlist feature to mine customer insights in multiple ways: to offer exclusive access to coveted items when they become available, to trigger customized sales alerts, or to curate "shop the look" suggestions based on wishlist combinations.
- Personal communication: NET-A-PORTER understands that not everyone wants the same level of communication. They use analytics to accommodate preferred communication styles, from email frequency to content. Some consumers receive editorial-like emails highlighting trends and stories, while others get direct product and event notifications.
The heightened personalization at every touchpoint reinforces a sense of exclusivity—a critical component of a premium customer experience.
When companies can access the type of data NET-A-PORTER uses, they can enhance the brand experience for premium customers. However, companies must go beyond obvious data sources to implement pre-premium conversion strategies. Examples are transactional history (preferred brands, price points, purchase frequency), website behavior (browsing patterns, abandoned carts), social media (style inspiration, brand affinities), service interactions (notes on preferences), and direct feedback (surveys tailored to your premium audience).
A Customer Relationship Management (CRM) system can be helpful. A CRM centralizes data, offers tools for customer segmentation strategies, and allows you to automate communication workflows. Developing a high-level communication plan is an ongoing process. Not all businesses will have the data they need immediately available. Start with the data you have today, even if it's basic, and gradually expand your insights.
The takeaway: Done right, hyper-personalization reinforces the sophisticated brand identity and exceptional service that defines the premium experience. Customers feel genuinely cared for, which builds the brand loyalty that drives long-term success.
Premium marketing case study: Everlane's "Edition" Expansion
Everlane
Everlane started as a direct-to-consumer designer clothing brand, emphasizing transparency and ethical sourcing. As its mainstream customer base matured, the company was able to identify a "pre-premium" segment within its existing customers. Here is how they used data to develop their premium brand strategy:
Behavioral indicators
Everlane likely pinpointed these factors:
- Frequent purchases: Loyal customers with consistent spending habits.
- Elevated browsing: Interest in higher-priced basics (cashmere, silk, etc.).
- Responsiveness to limited releases: Positive reaction to capsule collections or material upgrades.
Targeted messaging
To convert this pre-premium segment, Everlane launched its "Edition" line. Messaging shifted from price transparency alone to:
- Timeless design: An emphasis on longevity and investment-worthy pieces.
- Exclusivity: Limited quantities and curated collections created a sense of scarcity.
Companies must uncover specific behavioral patterns to identify "pre-premium" segments. Look for shoppers interested in higher-priced offerings. They are usually the ones who browse high-end product or service pages but ultimately purchase lower-priced items. Also, consider those with strong customer loyalty program engagement. These shoppers are showing an affinity for your brand but haven't yet reached the top-tier reward level. Aspirational shopping habits, such as saving premium items in wishlists or carts, are other powerful indicators.
Combine data analysis with tools like surveys to understand consumers' sensitivity to specific price points and what they feel justifies premium pricing. Focus groups can also help businesses discover potential concerns or misperceptions about their brand's ability to deliver a premium experience. Remember, introducing premium tiers requires careful presentation. Consider following Everlane's example of using a separate line (like their "Edition" line) to avoid alienating your core customer base while making a clear distinction for your premium offerings.
The Bottom Line: Analyzing and supplementing behavioral data with qualitative feedback allows you to target your "pre-premium" segment. Customized messaging and carefully curated presentations can encourage these customers to become your most valuable brand advocates.
While many consumers are drawn to the allure of premium, certain psychological factors may hold them back from fully embracing your premium offerings. we will examine some of these in the next section.
Overcoming objections: Premium pricing psychology behind buyer behavior
Premium brands offer a tantalizing promise of exclusivity, quality, and elevated experiences at a higher price. Yet, even buyers drawn to your brand may hesitate to embrace higher-priced offerings. So, it's essential to understand the psychological factors at play to unlock their conversion potential. Here are a few common barriers:
Aspiration vs. attainability
Premium items embody a lifestyle people aspire to. However, if the gap between their current reality and the perceived price tag is too wide, it can create a sense of unattainability, causing them to pull back.
Status signaling and identity
Luxury items can signal status. Still, some premium customers hesitate to indulge overtly for fear of appearing pretentious or out-of-touch with their roots. Remember that luxury brand buyers have different priorities and behaviors than those who shop for premium products and services.
Risk aversion and the need for reassurance
Buying the premium version of a product or service means making a higher financial investment. People may worry about making the wrong choice or question if the value really justifies the cost.
Strategies to counter objections
- Bridging the gap: Tiered pricing, limited-time offers on introductory premium items, or smaller luxury accessories can make the leap less daunting for customers.
- Social proof: Testimonials from relatable figures or user-generated content showcasing satisfied premium customers build trust.
- Emphasize value: Go beyond beautiful imagery. Educate the audience on the product's craftsmanship, materials, or brand story to reinforce the rational side of the premium investment.
Proven tactics to convert your pre-premium audience
Once you have identified your high-potential audience, the next step is to guide them toward conversion. Here are a few effective tactics:
- Targeted incentives: Offer segment-exclusive discounts or early access to sales. The sense of privilege encourages them to experience your premium tier's elevated value.
- The power of exclusivity: Invitations to private events, whether virtual or in-person, create a sense of belonging. These experiences make shoppers feel genuinely valued and understood, which reinforces the desirability of your product or service.
- Pre-launch access: Allow premium customers to preview and purchase from new collections before the public. This sense of insider status makes them more likely to become ambassadors for your product line.
- Personalized content: Beyond product recommendations, offer this segment content tailored to their interests and purchasing behavior. This might include style guides, a behind-the-scenes look into product development, or interviews with relevant figures within your niche. This content deepens the connection with your brand's story.
The key is to balance exclusivity with accessibility. Too many special offers erode the uniqueness and specialness of your premium tier. Strike the right balance based on your brand positioning and the desires of your target audience.
Privacy: How to build trust with premium customers
Data privacy is becoming even more important for consumers. Audiences are especially vigilant about protecting their information. Premium brands must address this sensitivity to maintain the audience's trust that drives long-term success. Here are effective tactics for navigating the privacy landscape:
Radical transparency
Avoid using complex privacy policies filled with legal jargon. Instead, use clear, simple language to explain exactly what customer data you collect, how it's used, and how individuals can manage their data-sharing preferences. Offering easy-to-use opt-out options builds trust and shows customers the brand takes privacy seriously.
Value exchange
Frame data collection as a give-and-take relationship. Clarify the benefits people receive in exchange for their information. This could mean making relevant offers, giving them access to limited editions early, or making personalized recommendations and other perks that enhance the customer experience.
Luxury privacy done right: Lessons from Louis Vuitton
Louis Vuitton, a global leader in the luxury sector, recognizes the importance of addressing consumers' privacy concerns. Their approach prioritizes a strategic balance between personalization and consumer data autonomy:
- Customer-centric control: Louis Vuitton gives consumers granular control over their data preferences. People can tailor the specific information they share and how it is used.
- Value transparency: Louis Vuitton clearly articulates how data personalization enhances the customer experience. This might include targeted product recommendations, invitations to exclusive events, and other benefits.
- Security as a brand pillar: Louis Vuitton highlights their robust security measures, a non-negotiable factor in building trust among its clientele.
The premium advantage: Premium brands boast a unique advantage in building trust-based relationships. Their customers expect exceptional service in all aspects of brand interactions. Committing to responsible data management is critical in developing brand advocacy.
Addressing unique luxury concerns
Louis Vuitton's approach demonstrates the company's understanding of luxury consumers' heightened privacy sensitivities. These individuals prioritize:
- Discretion: High-net-worth individuals may hesitate to share personal information or purchase history that could reveal their spending habits or lifestyle choices. Louis Vuitton empowers users by giving them granular control to maintain anonymity while receiving tailored offerings.
- Exclusivity: Luxury consumers demand personalized service and experiences that feel unique and inaccessible to the general public. Communicating clear value helps them understand that sharing limited data enables the brand to maintain a sense of exclusivity in curated experiences.
Key takeaway: The Louis Vuitton case study illustrates that even in the world of luxury, privacy must be a strategic priority, not just a compliance exercise. Premium brands can balance personalization with transparency to strengthen relationships while protecting their most valuable asset: their customers' trust.
Build a premium brand with a data-driven process
The art of attracting premium customers often emphasizes emotional connection, aspirational storytelling, and attention to quality. But success in today's market requires a more profound layer: a data-driven understanding of your ideal customer.
The Brand Auditors can help your company unlock its potential with a data-driven premium marketing strategy. Whether you want to target a high-value audience, transition existing customers into a higher tier, or balance personalization and privacy, our expertise is to your advantage.
Contact us to start the journey of elevating your brand with the power of data-driven insights.
Are you ready to find out how a brand audit can transform your business?
Our brand audit process is a comprehensive analysis designed to help companies optimize performance.
- Increase ROI on lead generation and sales conversions.
- Reduce marketing expenses.
- Strengthen brand positioning to become more competitive.
We guarantee satisfaction or get your money back! Schedule a discovery call with a brand auditor to find out more.
Related Content
Premium Brand Strategy: From Ordinary to Extraordinary
Are you looking for new ways to differentiate? Discover how a premium brand strategy elevates your business–better customers, higher prices, lasting success.
