white paper Q&A: Laurence Bernstein answers questions about Luxury Branding 3.0
L
aurence Bernstein was interviewed by a leading French marketing academic on the subject of luxury marketing in April 2014. For technical reasons we cannot say who or where (the black box theory of transparency), but the text of the interview is interesting anyway.
Q
ARE YOU FEELING THAT MARKETING IN THE FIELD OF
THE LUXURY HOSPITALITY SECTOR IS CURRENTLY EVOLVING?
A
No. It seems to me that luxury hospitality marketing is the same as it has always been with the exception of a confusing array of socalled “exclusive” booking sites. Certainly advertising has not changed and content – experience – has become only more esoteric. It is as though luxury hotel marketers have never really understood what luxury means, or rather, what luxury means to wealthy people.
416.967.3337 www.proteanstrategies.com © 2013
The biggest problem is the confusion between luxury marketing and selling expensive stuff to rich people. There is a big difference, and hotel marketers fall into the trap of selling expensive rooms to rich peo-
ple, or, as is most often the case, not -quite-rich enough people who have somehow (either through their own budgeting or by taking advantage of the myriad deals available for pretty much every hospitality experience). Marketers need to understand what luxury really is…to often they think of it as meaning “expensive”, or “exclusive”, or “aspirational” and so on. Luxury goods and experiences may be any of those things – in fact they are probably all those things depending on who is looking at them – but this is not luxury. “Luxury travel” is an almost totally meaningless concept: all leisure travel is luxury for the person traveling. This is why they do it…to experience things that are not necessary in their lives, and with the exception of the psychological benefits of re-
newal and recharging, nothing about a vacation is essential. All travelers are expending their scarce time (luxury of time) and their limited resources on their holiday. So, as an experience it is no more of a luxury for a rich person to spend $600/ night on a room than it is for a middle class person to spend $90. In fact, it may be less. It all depends on how it is experienced.
D
O YOU THINK EMOTIONAL ENGAGEMENT IS TAKEN
ENOUGH INTO ACCOUNT?
I think they think they are taking it into account, but in many cases they miss the point. Showing aspirational pictures is based on the thinking that people will identify at an emotional level with the person or situation in the ad, and this will influence their choice. I am not sure this is true, or if it is true, the level of influence is small compared to the many other unconscious emotional connections that are made during the choosing process. Our research shows that emotional factors are more important in the hotel choice than just about any other category, and yet it does not seem that marketers try very hard to get an understanding of the totality of this process So, in summary, the consumer takes emotional engagement into account, but marketers don’t really.
Q
PROMOTION) TO A
4E MIX (EMOTION, EXCLUSIVITY, ENGAGEMENT AND EXPERIENCE)?
A
If I might question the structure : “Experience” is the totality of the other three (plus many other factors). Luxury experience results in part from exclusivity and engagement; emotion is the way in which some factors are experienced. So the four are not really the same set as the four Ps. As a means of categorizing the things great hotel marketers need to take into account, these four work well. Maybe call them marketing “pillars”.
Q
HOW DO YOU SEE THE LUXURY HOTELS CLIENT TODAY?
DO THEY HAVE NEW WANTS AND NEEDS?
A
Hotel clients today have wants and needs which are essentially no different from the traveler of the past – just the way in which these can be met, and the context in which they experience them, are heavily influenced by the environment, the channels, the universal increase in global sophistication, etc.
Q
IN THE ACADEMIC LITERATURE, CONSUMERS
ARE SAID TO BE CONSIDERED NOWADAYS AS COMPLETE HUMAN BEINGS FOR WHOM SOCIAL AND ENVIRONMENTAL CONSCIENCE ARE MORE AND MORE IMPORTANT
DO YOU SEE AN EVOLUTION FROM A 4P
(PRODUCT PLACE PLACEMENT
IN THEIR CONSUMING HABITS.
WHAT DO YOU THINK ABOUT THIS STATEMENT? Page 2
A
Naturally I would disagree with this in terms of it representing a fundamental typological change in people. The nature of the commercial discourse has evolved to include considerable discussion around environment and other factors important to people (these things have always been important, but they were probably not as much of an issue). Brands have become fairly good at manipulating people through their social conscience which has resulted in the dynamic you describe. I am not sure this is entirely moral, but it is what it is.
Q
DO YOU THINK HAVING A SOCIAL AND ENVIRONMEN-
TAL PROGRAM IN HOTEL GROUPS’ BUSINESS MODELS IS MANDATORY TODAY IN THE CLIENT’S OPINION?
A
Q
No
ACCORDING TO THE ACADEMIC LITERATURE, CON-
SUMERS TRUST MORE AND MORE
OTHER USERS BETTER THAN MESSAGES FROM THE COMPANIES.
DO YOU THINK HOTEL GROUPS TACKLE THIS PROBLEM IN AN EFFICIENT WAY?
A
I am not convinced that consumers trust the voice of total strangers more than they do the voice of the hotel, when the voice of the hotel is underpinned by authenticity and supplemented with welldesigned rich media, great copy, etc. People trust the voice of others when it is delivered in a context that
provides some credibility (e.g. TripAdvisor) but even then a comment from their real friends will override anything on the site. If every property that had a bad review on TripAdvisor suffered the way the pundits say they suffer, there would be no hotels! What happened, and this might be an interesting academic study), in my mind is that when hotel c-suite realized that they could cut their advertising budget by only doing digital stuff, their brands started to lose strength. This led to a situation where the brands – and remember that the core idea of a brand is to help people make choices by imbuing the company with meaningful and consistent attributes, one of them being trust – lost their ability to persuade and lead consumers. Therefore people went looking for whatever they could find to guide them. That said, if a hotel review in TripAdvisor talks about the rats in the room, then the hotel deserves to lose business.
Q
HOW DO YOU THINK CONSUMER LOYALTY IS IM-
PORTANT IN NOWADAYS LUXURY HOSPITALITY BUSINESS?
A
The customer loyalty fetish is often misplaced — is it really demonstrated in the hotel business by repeat business, or is it about some other behaviours that may be more valuable to the operator, such as evangelizing. (See my article on customer loyalty http://tinyurl.com/ protean-loyalty-confusion) Page 3
Q
Communications programs that involve consumers contributing to the advertising or sending in pictures etc…may work, but they are a gimmick
IN YOUR OPINION ARE LOYALTY PROGRAMS
SUCH AS
SPG FOR STARWOOD
ENOUGH TO GUARANTEE CONSUMER LOYALTY?
A
No…and it’s not my opinion, it’s fact (see http:// tinyurl.com/proteanhospitalityloyalty).
A
Q
IN YOUR OPINION, TAKING PHILIP KOTLER’S WORK AS A REFERENCE, GENERALLY SPEAKING IN THE HOSPITALITY BUSINESS, IS:
Character building a viable way to increase consumer loyalty and why? Not sure what you mean by character building – but if it means developing an authentic, intriguing brand story, then yes.
A
Co-creation a way to increase consumer loyalty and why? Depends – all experiences are co-created by definition, so product co-creation in the service industry is the only way to build loyalty (other than the loyallike behavior resulting from point programs).
A
More Protean White Papers and hospitality articles
Communitization of clients a way to increase consumer loyalty and why? Human beings are by nature tribal and we look to belong to tribes. The only question is whether the tribe is meaningful and promises some fundamental returns (e.g. safety and security, acceptance, approval, etc.). Regardless of what they may think, the Ritz Carlton twitter group or Facebook page “likes” do not offer these in and of themselves, and as such I would bet that they are of little or no value. Having social and environmental sustainable practices a way to increase consumer loyalty? No – these are not sustainable differentiators and everybody will have them because they are fundamental to doing business in the post millennial environment.
A
available at http://tinyurl.com/ protean-hospitalitystacks
Protean Hospitality is a boutique brand strategy advisory firm focused on helping our hospitality clients drive growth. We combine our business/category expertise with tenacity, balancing rigor and creativity, to uncover new opportunities for hotels, resorts and hospitality brands. For further information on this and other Protean Hospitality studies contact: Laurence Bernstein, Managing Partner, 416 967-3337 x 101; Bernstein@proteanstrategies.com www.proteanhospitality.com Page 4