NEW YORK, NY--(Marketwired - October 19, 2016) - At the most recent meeting of the Luxury Client Experience Board in New York City, executives from top luxury retailers, hospitality, real estate brokerages, digital agencies, and international banks took up the challenge of identifying best practices for creating repeatable processes that consistently produce higher customer conversion and retention rates. A panel of established luxury professionals, including: Blair Brandt, CEO of Next Step Realty, a firm focused on relocating up-and-coming recent college graduates from campus life to rental apartments in New York City and Brooklyn; Franco Salhi, Co-Founder and President at Vesture, a one-of-a-kind custom wardrobe management service distinguished by its exceptional client-centric service; Alyssa Reppenhagen, Vice President of Retail at L.K. Bennett, a luxury fashion brand defined by its unmistakable British heritage with collections that have a distinct blend of femininity, style and color; and Milton Pedraza, CEO of Luxury Institute and keynote speaker, led an intriguing open dialogue about the modern retail market. The group of executives identified key factors that positively influence relationship building, along with effective techniques for hiring and managing teams of passionate and inspired sales professionals.
"Success in any form of high-end sales depends on converting prospects into satisfied customers who become a valuable source of future business and lucrative referrals," says Milton Pedraza, CEO of Luxury Institute. "Unfortunately, a look at the research shows that many companies are falling short when it comes to customer conversion and retention."
Pedraza presented a set of statistics illuminating the opportunities lost when firms fail to turn first-time shoppers into repeat buyers. According to Marketing Metrics, just 10% of customers will ever revisit a brand after their initial visit, and only 27% of those will return to the physical store, where client relationships primarily develop. Successful relationship building produces highly-desirable results: repeat customers have a 60-70% chance of making another purchase on a future visit, and prospective clients have a 54% chance of buying after a second visit. Penalties for a poor initial interaction are severe, with 72% of shoppers in an Accenture survey refusing to give a brand a second chance after a negative experience, and 80% of those who were displeased feeling the company could have done something to keep them.
"Each time a potential customer walks out the door without buying, companies lose not only the immediate sale, but also a vast amount of future sales that shopper would have provided, so even small improvements in conversion and retention rates today yield substantial dividends down the road," says Pedraza, noting that human relationships are at the core of any successful process. "In today's modern world, people are decreasingly loyal to brands and contemporary consumers tend to stick with a particular sales associate with whom they feel a connection."
Executive board members emphasized that while coaching and personalized training is of vital importance, building better sales teams begins with the hiring process. Most board members agreed that high-level executives should be involved in the hiring process as much as possible. The modern consumer is already well-versed in product knowledge and availability, but a model sales associate can use a combination of metrics and client relationship building techniques to maintain a personal connection that leads to higher levels of shopper conversion and repeat sales. Teams and managers who are confident and know how to leverage their individual personalities while serving as brand ambassadors, are usually most effective in boosting client retention by developing one-on-one relationships with customers.
"Retailers need to create a culture filled with discipline and consistency in which every customer counts. They must get to know each client in depth to build strong relationships," said Franco Salhi, Vesture. "In order to create brand loyalty, they need to make sure every client's visit is memorable, regardless of their purchase. In retail, connecting with every client is important and should be treated as such."
By educating associates to identify walk-ins, convertible customers and other opportunities, training should be done in a meaningful way that helps them develop confidence in their approach to customers. Associates must feel comfortable reaching out in a way that makes customers excited to hear from them. Repeat customers should be reminded of good relationships with the already existing sales force by use of gifts, letters and emails. Surveys monitoring customer satisfaction can highlight what parts of the sales program are working and which are not. Prizes and rewards for extremely successful sales associates drive incentives and lead to employees setting more ambitious goals.
According to Blair Brandt, Next Step Realty, "Retaining first time buyers is all about hiring great people and retaining them. If you retain your sales people who hold the personal relationships, then you transitively retain the customers as well. In addition, there is no better way to retain customers to your brand than to provide a great experience. That is the single best incentive for returning to any product or service. Lastly, brands should be as involved in client engagement, hospitality and follow-up as their salespeople, so if your sales people do leave, there is still a shot at brand allegiance, directly from the consumer." Next Step Realty clients are first-time buyers of the NYC lifestyle, so customer retention is a core component of their business model.
After listening to panellists, LCEB members and guests agreed to a set of seven recommendations for retaining the first-time buyer:
- Experience is paramount. Teams must be able to create a unique, engaging, positive experience tailored to the customer if they desire their repeat business.
- Sales associates should be selected with the utmost care. They are a personification of the brand and the only people to have direct contact with the consumer. Invest time and money in their development to see a dramatic sales increase.
- Managers need to be highly involved to teach representatives appropriately and to foster customer relationships.
- Different customers require different treatment. One look, one program, one appointment will not work for everyone. "People need to discover the individuality of the client -- that creates empathy."
- Training is hugely important. Associates should be rehearsed and aware of how to react to various situations. They must understand and be proactive about negative situations, and learn how to turn them into positive experiences.
- Take advantage and harness your brand's story. Tell a potential new client how the brand was started, what their aim is -- people resonate with stories much more than facts.
- Your sales team should have a familial environment to encourage learning, teaching and a cohesive message.
The final breakfast meeting of the Luxury Client Experience Board 2016 event calendar will be on Tuesday, November 1, 2016 from 8:00 a.m. to 10:00 a.m.
About the LCEB: The Luxury Client Experience Board (LCEB) is a membership association of luxury industry practitioners, co-founded by Luxury Institute and The Ritz-Carlton to enhance the education and development of leading luxury brands. LCEB members receive ongoing education in industry best practices through original research and educational events. Members come from diverse industries united in their goal to build long-term, high-performance relationships with clients by delivering exceptional, seamless, and measurable omni-channel client experiences on a daily basis.
For more information on best practices in retaining the first-time buyer, and on other topics, visit www.LuxuryInstitute.com, or contact CEO Milton Pedraza with any questions or inquiries about becoming a member of the Luxury Client Experience Board.
Contact Information:
Katherine Sousa
ksousa@luxuryinstitute.com