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Customer LoginsLuxury sales leadership: oxymoron
In his latest book, Car Guys vs. Bean Counters, Bob Lutz criticizes the luxury brands' efforts to be number one in sales:
"This had always seemed oxymoronic to me: how can any product or service be simultaneously 'aspirational and exclusive' while also 'most popular in its class' and 'near-ubiquitous?'" Lutz then says, "Best-selling Exclusive Brand" is a phrase akin to "World's Tallest Midget."*
This is not the first time this strategy has been criticized. Yet, the luxury-make management teams continue to push to be number one. Why?
I think there are at least three reasons. First, it works. Being able to promote that your model, brand, product, whatever, is "the most popular," "number one," preferred by more buyers than…," etc., gives the customer peace of mind. He/she thinks, "it's got to be good if so many other people have bought it" as well as, "if I purchase this one, I'm going with a winner." Because of this positive, supportive psychological impact on the customer (supported by consumer research), OEMs frequently use this marketing message. Until recently Toyota had promoted the fact that more retail customers purchase their brand than any other. Ford for years has been touting the fact that the F-Series is the most popular pickup.
The second reason, in my opinion, why luxury makers continue to harp on sales leadership is because there are big egos in this industry, whether it is in the luxury or non-luxury sector. The management teams are filled with highly driven, competitive managers. They want to win. I suspect most would subscribe to General MacArthur's famous quote, "There is no substitute for victory."
Lastly, I don't think the managers of luxury makes are really all that interested in exclusivity anyway. Here I am referring to the managers of the traditional luxury makes such as Audi, BMW, Cadillac, Mercedes-Benz, etc. I suspect they would say that if the customer wants an exclusive vehicle rarely seen on the roads, he has two options. He can trade up to one of the most expensive models such as 7 Series, S-Class or XJ, or, he can jump to a more exclusive make altogether. Daimler offers Maybach, Volkswagen sells Bentley, and BMW offers Rolls-Royce. And I would agree. If I see a Rolls on the road, which rarely happens, I am apt to turn my head to check it out as it goes by. But I never do that if a BMW or Audi goes by, as I see dozens, even hundreds, every day.
*Lutz, B. (2011). Car Guys vs. Bean Counters, Pages 42-43. Portfolio/Penguin, New York.
Posted by Tom Libby, PolkInsight Advisor, Polk (08.29.2011)