Mercedes Benz's Passenger Community cited on Mashable

Understanding Luxury Brands and Social Media

July 2nd, 2009 | by Samir Balw

Samir Balwani is a social media marketer who helps businesses create effective web strategies. You can follow him on Twitter and get his newsletter.

One of the biggest misconceptions by brand managers is that the web is not a luxury market. The truth is that people are spending more money online and it’s a place luxury brands must build a presence. However, most have a nagging fear of ruining their brand reputation.

So, how can luxury brands engage in social media?

The Luxury Market Online

Before we answer the previous question, let’s define the luxury market. According to The Journal of Brand Management, Luxury as a concept is defined:

“…within the scope of socio-psychology as a result of its connection to a culture, state of being and lifestyle, whether it is personal or collective. When linked to brands, it is characterized by a recognizable style, strong identity, high awareness, and enhanced emotional and symbolic associations. It evokes uniqueness and exclusivity, and is interpreted in products through high quality, controlled distribution and premium pricing.“

So, brands with scarce products and high prices must find a way to find consumers online. The questions we haven’t answered yet are, “are premium, affluent consumers online?” and “does making a product available online hurt controlled distribution?”

In November 2007, eMarketer published a report titled “Affluent Internet Users: How the Rich Live Online.” In the report they concluded that the number of affluent Internet users will grow from 43.7 million in 2006 to 57.1 million in 2011.



Now that we know that there are luxury consumers on the Internet, and that the demographic is growing steadily, we need to determine how a brand can engage these consumers.

Problems With Luxury Brands Online

The unique luxury brand must overcome a number of obstacles upon entering the online space. Here are some of the challenges:

1. Luxury implies a sense of exclusivity; that it isn’t for everyone. It’s difficult for a brand to selectively choose who to interact with and, unless done properly, this segmentation could cause a major backlash.

2. Most luxury brands are extremely hesitant to experiment with new marketing strategies. They feel that trying new things is too risky for their brand image. Instead, this hesitation can actually limit online opportunities, hurting the brand in the long run.

3. Because of a luxury brand’s need to maintain the appropriate aesthetics, social media can be a more expensive proposition for them. Building an application or web page is an expensive, arduous task for any major brand. It’s important to remember that social media for brands is not free.

Finding Solutions

The first and most obvious solution is to simply trust your consumers. If your internal perspective of the brand aligns with the customers’ view of the brand, everything will be fine. If not, you’ll finally learn who your core demographic really is and what they are looking for.

Just as a product can be exclusive, so can sites on the web. Creating an exclusive social network, an invite only site, or a suggestion site for actual customers are ways to limit the demographic.

If you decide you must engage on a public site like Twitter or Facebook, throw out any hopes of being exclusive. Selectively following or befriending users can quickly cause a backlash as customers complain about being left out. One way to engage on public sites is to target those sites with the closest demographic to the brand’s consumers. This limits the number of “outsiders” engaging with the brand.

Lastly, if the brand finds a mention that they aren’t comfortable with, it may be better not to respond. The web is huge; not everything will be seen by the masses (especially as we move towards real-time conversations). Responding or seeking removal of a message may legitimize and simply bring attention to any negative sentiment.

Examples of Luxury Campaigns

Case studies analyzing social campaigns are a great way to determine how to position a brand online. However, too closely emulating a campaign can have a negative affect. Social media success requires implementation of something new and exciting; some kind of added value.

Use the following case studies to see what they did right and as a means to understand the fundamentals for a luxury brand in social media.

Gucci On Facebook
Gucci has built an amazing following on Facebook, with over 404,000 fans on their official Page. By continually updating the page, and introducing new content such as photos and videos the brand is keeping its consumers engaged. Each update receives over 200 interactions in the form of “likes” and “comments.”

By opening Gucci to everyone, and not selectively deciding who gets to join, or inviting only specific people, Gucci has built a community. Even though many of the Gucci fans may not be able to afford actual products, the Facebook fan page builds “lust for the product.” This idea of “one day I’ll be able to afford that,” is part of the luxury appeal.

Not only does the Facebook Fan Page build consumers’ desire for Gucci products, but also enables the community to offer free feedback, publish images, and share Gucci content.

Mercedes Benz Social Network
Scarcity online is only achieved in a closed system. Usually this is against the accepted best practices of a social campaign, but for a luxury brand it can work. Mercedes highlighted this idea by creating a closed social network for Gen Y’ers.



GenerationBenz.com, is an invite only social network where consumers can give feedback on vehicles, as well as give Mercedes Benz insight into their younger customers.

By creating a network that includes only those that are either previous buyers, Mercedes members, and potential consumers, the brand has targeted exactly the demographic they want. Mercedes is able to engage users without fear that the brand reputation will be tarnished.

Creating a successful private social network can be costly, but the return on consumer loyalty may be great. Allowing brand customers to connect with each other while connecting with the brand, as well as creating a place to introduce new products to a brand’s core demographic, can be an invaluable asset.

Summary

Social media can be a powerful tool for a luxury brand. With a growing affluent market, the online world is a place high-end brands need to be. The question is, how are you going to maintain guardianship of your brand identity, keep your product premium-priced and exclusive, or engage your customer?

Knowing that releasing your brand to your consumers doesn’t necessarily hurt brand reputation is the first step.