Today, the global luxury industry enjoys a revenue of $220 billion. With 9.5 million millionaires worldwide, double the figure from a decade ago, the market's potential has grown tremendously. More and more people are carrying brand name bags and using branded cosmetics and related products. The market has reached its peak. By collecting more and more customer contact information and purchasing patterns, luxury brand managers are now looking for effective ways to cross-sell and up-sell to their loyal customers.
For the past decade, email was thought to be an ineffective channel for up-selling and cross-selling to the VIP customers of the luxury brands. In fact it is the opposite; they get the highest response rates by using email marketing tools for customer life-cycle campaigns and other welcome and promotional campaigns.
Here are five ways luxury brands can make use of email marketing:
1. Personalizing your messages creates a high level of loyalty in your customers. As they are reading information which relates to them, they feel respected and valued. Also, email is an effective, fast and interactive channel for customer communication.
2. Permission-based tactics are one of the key ways to succeed. With permission-based email marketing, 90 percent of customers are willing to open and click emails from the company, which definitely increases up-selling and cross-selling opportunities.
3. What's more, real time reports and measurable results push luxury brands to revamp their eDM campaigns. By integrating with different purchase and click-stream history, they can deliver targeted campaigns to the active recipients. It is important to luxury brand buyers and that gives them a new direction for luxury brand e-marketing.
4. Besides, segmentation makes you sell your products more effectively. Customers see only their preferred items through email, and when they click on them, a next eDM with more details will be triggered. It is more interactive than before and marketers will know what they should send next. This mechanism helps to increase the image of the brand. That's why we educate our customers about the concept of life-cycle and trigger-based campaigns.
5. Last but not least, maintaining your database brings you more sales opportunities. Clean your database every six months and ensure deliverability to the inbox of your recipients to increase the response rate of the marketing campaign. Also there are different ways to grow your opt-in email database through database acquisition strategies which can help your businesses.
I would like to share with you a case study. I am a customer of a luxury jewelry brand, which mails its product brochure to me every quarter. They can't actually measure whether I did read the brochure, which is a very costly to print. To every marketer, measurable results are essential and welcome to management. As most luxury brands are from Europe, they may not understand local tastes in Asian markets well. They can use eDMs to display many ideal items before shipping them to Hong Kong, and test the open/click-through rates to determine what the demand in the local targeted markets is and make the right decisions for local business development.
Luxury brands have a wide range of customers around the world. Before email systems, it was not effective for them to contact their overseas customers anytime. Now the internet brings everything closer together and email is the fastest communication method compared to fax and DM. In future, email marketing will be the trend and most marketers are more willing to invest their money into it because they can get "$57.25 ROI per $1 spend on email marketing" according to research by the Direct Marketing Association, and we can save our planet by using paperless promotion channels.
Francis Kwok is co-founder and CEO of Radica Systems Limited.
