Tuesday, October 2, 2012

Reserve the Benefits of Exclusivity

A while back, a column in The Economist told a tale of a possible subscription cancellation. The tale did have an unexpected twist: Kelvin MacKenzie, then editor of The Sun, Britain’s best-selling tabloid, received news that a reader had become so outraged with the paper he was thinking of cancelling his subscription. Not cancelling yet, but thinking of cancelling. Mr. MacKenzie took no chances. He notified the subscriber that the man was now banned from reading The Sun ever again.
     The story brought to my mind another story, told by comedian Groucho Marx about a possible cancellation of his club membership. As Groucho relates that tale in Groucho and Me, “I sent the club a wire stating, "PLEASE ACCEPT MY RESIGNATION. I DON'T WANT TO BELONG TO ANY CLUB THAT WILL ACCEPT ME AS A MEMBER.”
     Exclusivity in product lines can make your store more attractive, and so can exclusivity in your customer list. The Economist piece points out how this strategy is fundamental to the continuing popularity of high-demand night clubs and private schools. Reputation is enhanced by the percentage of people you turn away.
     Consider the findings from a Wong, Doody, Crandall, Wiener study of social media practices. The study compared Facebook pages of marketers selling luxury goods with those of marketers selling FMCG merchandise. FMCG stands for “fast moving consumer goods,” characterized by low prices, relatively frequent repeat purchases by consumers, and little emotional involvement from the consumer in the purchase process. Grocery stores sell FMCG merchandise like soft drinks, cleaning products, and toiletries. On the other hand, luxury brands in the study included Giorgio Armani, Burberry, Cartier, and Gucci.
     The FMCG businesses averaged about 365,000 Fans, while the luxury businesses averaged more than 1.5 million. And each post from a luxury business received just over 3,000 Likes on average, while the figure was a scant 131 for the FMCG businesses. From this, it would seem the luxury businesses generated more interaction than the low-involvement FMCG ones.
     However, among the luxury brands, only Tiffany & Co. allowed fans to post to the company page. By contrast, every one of the FMCG marketers allowed the postings. About half the number of FMCG businesses posted surveys and quizzes, either for fun or for consumer research. None of the luxury brands did so. In the final analysis, the luxury businesses were less approachable, more exclusive than the FMCG businesses.

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Limit Social Media for Prestige Appeal

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