Service Design is Luxury’s New Battleground

 

Most of what we know about designing customer experiences for services or products really originates from design work for mass consumers. Yet luxury brands are conceptually different and require a specific more tailored approach to designing client experiences. For high-end clients unique experiences are essential, worth paying a premium price. We have moved from   ‘service‘ to ‘experience economy’, where consumers, especially the next generation of consumers value experience more than a material tangible product. They believe in things that deliver value to their spirit. The high-end clients seek and appreciate  sophisticated experiences, dreams and lifestyles that match their values and aspirations. Experiences engage clients in creating memorable events connecting them emotionally to a company and its brand. Giving your clients the luxury of experience means thinking about how you deliver your product or service and the eco-system around it, and how you create new ways to engage with your followers through online and physical events, independent blogs, videos, podcasts and social media.

To stay relevant and maintain their status luxury brands need to carefully rethink what and how they deliver value to their clients, especially considering the rise of the millennial consumer purchasing power and how new emerging technologies redefine the perception of luxury and exclusivity. Luxury has long been associated with high price and sense of exclusivity: high-end well crafted products, high-tech, haute couture, exotic holidays, concierge services available to limited few.

Now thanks to enabling technologies, global transportation, availability of information via internet, a mass consumer could easily access many of those goods and services. Personal drives can be booked via simple mobile apps, luxury property and even castles could be rented for your weekend getaway on Airbnb and other intermediate services, airline promotions for business class tickets are advertised to mass consumer on 3rd party travel search websites like Kayak or Skyscanner, and for financial services everything is moving to digital and online, regardless if you are a mass or affluent client. What was once innovative and exclusive becomes ordinary very quickly.

Most of legacy luxury brands are struggling to successfully create and deliver services that go beyond the core value – their traditional product. By being slow to react, luxury brands are challenged by new startups and outsiders who are faster to innovate and respond to evolving client expectations.

Designing a seamless omnichannel experiences is key. Service Design provides the guide.

It is no secret that luxury brand clients needs are quite different from those of mass consumers. With more resources and generally less time available than the average consumer, competition for their money and attention is fierce. Their needs, expectations and aspiration vary depending on their personality, cultural background, goals and motivations.With the transfer of wealth to the next generation of consumers, more high end clients value substance over style, meaning they are more likely to connect with a company that offers real added value service/product, tells a story and align with their personal values rather than with a company that relies on its product’s flashiness.

There is one experience attribute  that is valued by most of clients. It is convenience, in relation to time. People are working longer hours (though more flexible hours), have more responsibilities and opportunities to spend their professional and personal time and are willing to pay more for something that saves them valuable time or offers a more aspirational or satisfactory return for the effort and time invested in ‘getting something done’. For luxury brands that often means integrating digital and physical channels (e-commerce, social media, mobile apps, e-banking, as well as on-site experience, mobile app and over the phone customer service, personal concierge or advisory). Each channel needs to enable an experience that represents brand’s aspirations and values, and reaffirms the value-add benefits to affluential clients. For example, enhancing the website as a storytelling and personal relationship platform is just a start (Cartier, Harrods, Coutts, Lamborghini, Rolex, Burberry, Chanel, Hermes, Kuhlman Cellars, Shangri-La, Ritz-Carlton ). Ensuring that the back-end customer service is offered through a variety of channels (in mobile-app chat, phone line, email, on-site, online messaging, social media) or offering precise status of the service or product journey (order, shipment, delivery, repair, inquiry case) becomes a hygiene factor these days and a basic expectation. Only by delivering both a luxury brand can stay relevant and attractive to high-end clients.

Self-service enabled in the back-end: Regardless of the industry, service or product clients these days appreciate being able to log onto an app or web portal themselves to perform a variety of functions in their own time in a frictionless, simple way – without having to wade through convoluted call-back approval procedures that suit the institution and not their clients, or waiting on hold to customer service call centre, being transferred from one department to another (or even worse interacting with a poor quality AI agent). A well optimised digitised workflows provide a foundation for this self-service, ensuring client data is centrally displayed and controlled, and doesn’t constantly need to be shuffled through or cross-checked by different departments.

Single capture, multiple use: Enabling an efficient central repository of client data is a strategic step, but often just one of the first ones. Correct data needs to be rigorously captured in a format that eradicates time-consuming ‘re-keying.’ In a convenient and digitally enabled environment signing up for a new account, service or product may involve nothing more than endorsing a pre-populated form and clicking ‘submit’ on your mobile, tablet or laptop. Data across various accounts or products can be presented to clients in an integrated, real-time manner, giving them the benefit of a 360 degree overview of their affairs or relationship with a particular company.

While digitisation creates exciting possibilities, it also has its limits. There’s still a strong demand and need for human interaction throughout the client lifecycle, even among young generations. This becomes crucial when interacting with high-end clients who expect a personalised quality service experience at each step of their client journey. The answer is a truly holistic approach – one where physical interactions with clients are supported and enhanced through the effective use of technology tools fed by the right data resources analysed by AI engines. The end result will be happier, longer lasting client relationships and strong brand affiliation with the luxury brands of tomorrow.

Service Design provides guideline for luxury companies to become more client-centric and constantly evolve to ride the crest of the technology wave in order to offer their clients unique, seamless experiences. Those luxury, sophisticated and exclusive experience could still be grounded in legacy brands heritage and empowered by new innovative technologies and value propositions. With service journey mapping and service blueprinting you can identify touch-points that require extra personalisation, perhaps something as simple as adding a custom name to a bag or document folder, or adding a personal Thank You note to the order shipment (something that many new start up brands or hospitality companies already offer). By brining client and end-user research into the forefront of any project (whether it is a transformation or new proposition development), service design helps luxury brands to identify opportunities to create the luxury of belonging (affiliation with values and aspirations that a brand projects), define what your customers value and show them that you share those values.

Quality and history are the biggest factors that influence a brand’s luxury perception (by history I mean ability to establish a brand story or a proven track record of quality).Regardless of the industry brands known for only using the highest quality materials and craftmanship or for consistently delivering a service beyond expectations are ranked as the forefront of the luxury experiences. Although creating a strong luxury experience is crucial for high-end brands, virtually any brand can benefit from applying at least some luxury experience principles, especially the principles of convenience, uniqueness, exclusivity, and strong projection of influential brand values and aspirations that resonate with affluent clientele. Application of latest technology advancements will always remain a strong attribute of any luxurious brand. Those that stay behind will loose its relevance rather sooner than later.

Kadence Luxury Brand Index 2018: Who is perceived as the world’s most luxurious brand?

 

Since May 2019, I have been working with London based world renowned Coutts Private Bank  and wealth manager as a Journey Design & Structure Manager for ‘Understand Needs & Advice Client Journey’ helping the business to enable an exceptional personalised digital client service.

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