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INTRODUCTION
Marketing has for long undertaken its Copernican Revolution, moving from a transactional (sales-driven) scheme to a relational (bonding) scheme. It is worth noting that the buzz-words in all marketing literature today are 'customer equity', 'lifelong customer value' and 'being customer-driven'. Brands with databases have been the first to move to this new paradigm: banks, insurance companies, rental companies, credit cards, services and so on - be it in consumer markets or in business-to-business.
The last brands to make a step in this direction have been brands that used to base their price premium on the attractiveness and fame of their own names, that is, on their brand equity. Thus, L'Oréal Paris started a customer relationship programme only in 2005, with the creation of a database and with the associated customer relationship management (CRM) that goes alongside.
Last but not least, luxury brands are now starting to examine the benefits of the 'lifelong customer value' approach, beyond building the social prestige of their names. Lancôme started its 'My Lancôme' customer relationship programme in Argentina in 2004; it is remarkable that this programme was first applied in a remote country, far from France, at the time of the economic collapse of that country. How could luxury brands retain their customers, who were also remaining price-sensitive and willing to have better control over the volume of their expenditures on high price items? Customers were becoming scarce; the priority was to retain them through better relationships. The consulting company Bain1 conducted a survey of the growing practices among luxury brands. They quote Coach as investing 3 million dollars in customer surveys and sales data mining to better know their customers. Bain recommends new rules for luxury, among which that all luxury brands should try to uncover their clients' shopping patterns through CRM.As a forerunner, chanel developed a CRM approach in Japan too.
Luxury brands have a great and unique asset with which they can build customer relationships: they have their own distribution outlets. Why then, beyond the services that go with this outlet experience, do luxury brands need to think of building a CRM policy? How should they do it: do they have to reinvent the CRM wheel just because they have a luxury customer, or simply...