Know-How Exchange : Strategy

What, in terms of a niche commodity, are you marketing? You don't have to name the product,
just the niche.

That, at the very least, will focus attention because all luxury brands are NOT created equally.

Let's first apply an important differentiation to the discussion at hand: that of people who are rich versus those who have wealth—new money weighed against old.

New rich people have worked for their cash and know how much they've got, where it came from, and how they earned it. Wealthy people come from old money. Wealth has always been there, it's got social and cultural equity, and its origins date back to who knows when. It is well established and it needs no justification for its use.

You need to consider another element: that of newly acquired wealth not really caring about Ferrari and Louis Vuitton.

I know several people who have earned multiple millions within the last five years who have ALL bought and then swiftly got rid of their expensive Italian sports cars because those cars lack practicality, and because frankly, although they look niche, those styles of car are not all they're cracked up to be. In essence, they are a dying breed, and therefore a dying brand.

That's not to say Ferrari are going to go bust any time soon. It's just that their appeal may be waning.

Let's be clear here: people buy luxury brands to impress and (to intimidate) other people. One's ability to afford a luxury brand tells the non luxury brand owner "I'm rich, you're not."

The money? The money is the liberator and one's ability to spend it, that's the thing that gives the essence and the illusion of freedom. Without the money, the brand (the facade) is just an item, a shield ... and a pretty worthless one at that.

Were I to even to attempt to walk into Christie's auction house in New York city dressed in paint spattered jeans, sneakers, and a torn t-shirt, what would happen? I'd swiftly be shown to the door and tossed out onto the street. I might even get myself arrested.

Why? Because I appear to be no one of substance.

But if I'm known by the gallery people?

And if I have money?

And if I've been known to drop $20 million on one painting?

Oh, that's another story.

Ladies and gentlemen, I give you Mr. David Geffin, who, on numerous occasions, has turned up at Manhattan auction houses looking like a hobo.

Take Rolex as another example.

A man's Rolex will set you back $3,000 or so for starters.

Yet I can walk into Target and buy a cheap Timex and my watch will tell just the same time as the Rolex that sells for three grand.

Don't get me wrong, when I feel I need to make an impression, I wear my Rolex because one glance at it from the non-Rolex owners I meet IMMEDIATELY sets me apart: my possession and ability to wear the watch tells the non-Rolex person that I, as the Rolex owner, have substance (and enough disposable income to sink a month's pay into a watch).

So, now you know me as a person that owns a Rolex.

How do you feel about me right now? I've built up for you, and you've reinforced, certain perceptive imaginings as to who I am, what I do, how I do it, and the kind of person I am.

Yet you've never met me. You know nothing about me.

But merely by you reading that I own a Rolex, you immediately pigeon hole me into a certain niche.

Don't deny it: we ALL do this because we are hard
wired by society to do just that: to judge based on
looks and on initial values. It's on this scale that brands—particularly luxury brands—make their mark. It is on this soil that they hoist their colors.

But ... is everything as it appears? Let's take a closer look, shall we?

The non-Rolex owner looks at one thing (my watch) and they see a Rolex. But in reality, what they're looking at is something totally different (hence my point that not all brands are created equally ... at least, not on the part of the non-owner).

What the non-owner does NOT know (until now), is that my Rolex—the one that's just put the other person in their place—my Rolex cost me $35 on Canal Street in Lower Manhattan.

How now, has your opinion of my changed? Again deny it if you want to but you KNOW you're gut feeling of me changed IN AN INSTANT ... based on your perception of my ability to afford a Rolex ... or any other luxury branded item. Why? Because I marketed my ownership of the Rolex to your compulsion to see me as rich by dint of ownership. How? Through your desire to acquire.

Those are the two things that sell not just branded, luxury items, but in essence, all items: messaging that's directed at emotionally driven compulsion, and the desire to acquire.

People who lack money are compelled to look at those that do have money—because the money brings with it the things that society tells us we need to own.

The more we're shown what we can't afford, the more we want it, even though we have neither the need for it, or the money with which to pay for it. It's this desire that drives up credit card bills, because we're "given" a certain level of credit that we seldom have any chance of paying back. Should I chose to, I could buy a car on my credit card ... but that wouldn't be wise.

However, the desire to acquire SHUNS wisdom (or at least, that's often the case), which is why, once the initial shine has worn off, many of the people I know who has lashed out $200,000 on an Italian sports car have ditched the thing mere months later when, for some reason, the car's ability to enlarge their penis just didn't seem to work! I hope this helps. Good luck with your strategy.

Gary Bloomer
Princeton, NJ, USA