Value Continues to Rule the Day

An excerpt from Karen Weiner Escalera’s speech last week in Palm Beach for the Luxury Marketing Council last week, as reported by The Palm Beach Daily News:

“Value rules the day at all price points,” she said, reminding the audience that before the global recession kicked in last year, excess was in vogue.”It’s a badge of honor for consumers to get things at a good price.”

“Consumers boasting about the purchase of a $25 million condominium is not in keeping in tenor with the times,” Escalera said. “But if you say that you bought a $25 million condominium for 30 percent less than the asking price, then that’s more acceptable.

“At the start of 2009, a lot of people thought that going the value-added route would be enough,” she said, citing the practice of restaurants giving away a free dessert with the purchase of a meal or hotels offering four nights for the price of three to encourage customers to spend money with them.
“But it isn’t enough.” Escalera believes a business catering to an affluent clientele needs to devise promotions that will appeal to their newly adopted conceptions of what real value is.

For example, a Mexican resort company was suffering because of the drop in travel to Mexico caused not only by the economic downturn, but also because of drug wars, the threat of kidnappings and the swine flu outbreak. In response, Escalera’s firm devised a campaign offering double upgrades when booking a room at the minimum rate. “Upgrades are the most valued element among affluent consumers,” she said, reporting that within three months calls to the sales center at the Mexican resorts spiked as much as 40 percent depending on the resort. Because of this success, the promotion is continuing through the fall.