Daniel Langer is the founder and CEO of consulting firm Équité
During a recent series of luxury masterclasses on ultra-high-net-worth individuals (UHNWIs) I was presenting in several locations throughout Asia, we took a closer look on one aspect.
In the world of luxury, where every detail should be meticulously crafted to perfection, a troubling trend is emerging. Ultra-wealthy clients, the most critical clients of the success of most luxury brands, are quietly and sometimes even vocally walking away. As I travel through Asia, diving deep into the psychology of those highly discerning clients, a stark reality becomes clear: The human factor is the make-or-break element in luxury relationships.
In a discussion with one of the wealthiest people in Singapore, I learned about his frustration with the car brand he is driving, which cost more than SGD $700,000 . He voiced his frustration with irrelevant invitations to events, long waiting times to get his car serviced and, overall, a lack of respect for him as a person by the staff of the dealer. He added, "I love the car, but because of how I am treated, I will never buy from them again."
The perception of devaluation
At the heart of these breakups lies a fundamental feeling: the perception of being devalued. This manifests across multiple dimensions, each capable of destroying the delicate bond between a luxury brand and its most discerning clients.
Attention deficit
UHNWIs expect to be the center of attention when they engage with a luxury brand. As my research indicates, they buy the anticipation of a positive perception shift by investing in an experience that affirms their status and worth.
When this attention wanes or is divided, the relationship immediately fractures. “I never give any brand a second chance,” is a typical comment I hear all the time from this top group of luxury clients.
Time is luxury
Waiting times are not acceptable for the ultra-wealthy. Time is their most precious commodity, forcing them to wait sends a clear message: They are not valued.
This perceived disrespect becomes a massive crack in an otherwise solid relationship.
Storytelling disconnect
Luxury is about emotion and inspiration.
When brand storytelling becomes irrelevant or fails to resonate, it signals a rupture between the brand’s values and the client’s aspirations. This misalignment frequently leads to a swift and often irreversible breakup.
The sting of dismissiveness
Perhaps the most egregious offense is dismissive behavior.
When staff treat UHNWIs with anything less than the utmost respect and attentiveness, it’s not just a service failure. It’s a personal affront that instantly severs ties.
The China conundrum
Findings from my research that I recently published highlight a critical issue in the Chinese luxury market.
Chinese luxury clients are expressing widespread dissatisfaction with luxury store experiences, driving them to shop overseas. This exodus is a damning indictment of the failure to understand and cater to the nuanced expectations of one of the world’s most important luxury markets.
The root causes across Asia are alarmingly similar to those identified in my global masterclasses: lack of personalized attention, inadequate product knowledge and an overall sense that their patronage is taken for granted. Traditional training methods regularly fail to address that luxury is about the human factor.
The urgency of action
The traditional client experience playbook no longer suffices in a world where UHNWIs have more options than ever and are increasingly discerning about where they invest their time and money.
The urgency for comprehensive, transformative training cannot be overstated. Luxury brands must invest in programs that instill a deep understanding of the psychology of ultra-wealthy clients.
This training should encompass a range of critical skills. First, emotional intelligence to read and respond to subtle cues is paramount, allowing staff to anticipate and meet unspoken needs. Cultural competence is equally crucial, enabling teams to navigate the complex global expectations of a diverse UHNWI clientele. The art of personalized storytelling that resonates on an individual level is another key component, helping to create meaningful connections between the brand and the client. Finally, mastery of non-verbal communication to convey respect and attentiveness is essential, as it often speaks louder than words in luxury interactions.
The path forward
The breakup between luxury brands and their most valuable clients is not inevitable.
I can see again and again that when skills are built up in transformative training sessions, immediate results are achieved. Within a week after a recent luxury sales training geared to UHNWI, an ultra-luxury brand reported back to me that the sales at their stores doubled.
Being treated in the right way matters and translates into immediate and lasting results. The human touch, when executed with excellence, remains the most luxurious offering of all.
A single negative experience can easily erase years of loyalty. Therefore, luxury brands cannot afford complacency, especially not when it comes to the best clients. Are you ready?
Luxury Unfiltered is a weekly column by Daniel Langer. He is the CEO of Équité, a global luxury strategy and creative brand activation firm, where he is the advisor to some of the most iconic luxury brands. He is recognized as a global top-five luxury key opinion leader. He serves as the executive professor of luxury strategy and pricing at Pepperdine University in Malibu and as a professor of luxury at New York University, New York. Dr. Langer has authored best-selling books on luxury management in English and Chinese and is a respected global keynote speaker.
Dr. Langer conducts masterclass management training on various luxury topics around the world. As a luxury expert featured on Bloomberg TV, Financial Times, The New York Times, Forbes, The Economist and others, Mr. Langer holds an MBA and a Ph.D. in luxury management and has received education from Harvard Business School. Follow him on LinkedIn and Instagram, and listen to his Future of Luxury Podcast.