How Luxury Cos Make The Big Sell
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There's a Rs 12.5 crore Bugatti in someone's parking lot, and a Rs 5.3 crore mini-submarine in someone else's private beach. Who are the people buying these and who are the ones making the sales pitch?
Anant Singh has a speed fetish. The 35-year-old industrialist dotes on supercars - high-end luxurious speed machines whose price matches their exclusivity. Some time back, Singh decided he wanted to acquire the Koenigsegg - the world's fastest car, priced at a whopping Rs 12.5 crore. No problem, he was told. Would you like to be flown to Sweden to meet the people who make the car? And, how about spending a day on the track trying it out with your friends?
Such an offer is a routine one in the world of high-end luxury marketing. Of course, it is made only to a select few who have deep enough pockets and a clear history of luxury buying. "If you have the money, then absolutely anything can be arranged for you," says Nigel Harwood, CEO of The ESTD, a Gurgaon-based company which markets executive jets, luxury yachts, sports cars and mini submarines to the rich and famous.
Most of these luxury playthings rarely need advertising - word-of-mouth referrals are enough (in any case, it's only a niche group that can afford them). And despite the high profile sales pitch (how many marketeers can proposition prospective clients with an offer to fly them to Italy to spend a day on a handcrafted, 92-foot Riva yacht?), it's not all easy going. The super-rich can also be super-quirky.
The Super Rich and their Quirky Demands
Harwood recalls flying a business jet, an American-made Hawker, into London's Heathrow airport - "and that costs a lot of money" - so that a prospective client could check it out. The client, however, had other more important things to do that morning. His shoemaker wanted him to come in for a fitting!
And recently there was this businessman who was dead certain he was going to buy a yacht. Everything had been discussed and arranged. Then Harwood and his team met the businessman's wife. The following conversation ensued:
Are you excited about the yacht?
No, she said.
Have you seen the yacht?
Will you be going with him when he goes to pick it up?
Will he be buying the yacht?
These little hiccups aside, the luxury business in India is doing quite well. According to a 2011 report by the Confederation of Indian Industry, the overall luxury market (that's everything from high-end wines to fantastically expensive yachts) in the country had grown by 20 per cent in 2010 over the previous year, contributing to the growth of the luxury sector, currently valued in India at US$ 5.75 billion, and expected to grow strongly over the next five years. "That's not surprising," says Tikka Shatrujit Singh, adviser to the Louis Vuitton group, who recently gave a talk on the subject at the Harvard Business School. "Everybody abroad wants insights into India and China because this is where the growth is happening." The hopes might be there but there are challenges, too, in keeping sales consistent.
How to Woo a Potential Customer
In the luxury business, a customer expects to be pampered the minute he walk through a store door. But when it comes to selling business jets, large yachts, and mini-submarines, there obviously is no store door to walk through. How then do you reach out to the people who might be interested? Advertising doesn't help, because 99 per cent aren't interested. Or cash-rich enough.
According to Anju Dutta of Marine Solutions, a Mumbai-based company that has been selling yachts and speedboats and other things aquatic since 2003, one way of homing in on the target clientele is by tracking the people who've been given platinum cards by their banks. (A platinum card in bank lingo translates into a high net-worth individual). That is followed by other hooks. Like for instance, an invite to the Genoa boat show where Prince Albert of Monaco will be in attendance. "You have to make your client feel special," says Dutta. But even after that, there are a few bottlenecks before sales get closed, particularly the Indian penchant for negotiating.
"The rich Indian has a few defining traits," says Harwood. "People tend to get down to business straightaway rather than first chatting about the weather or cricket. Big egos have to be treated much more courteously here. The youngsters might be more interested in the fast cars and expensive yachts but it's the parents who hold firmly the purse strings. And most importantly, negotiations over price can go on for weeks, during which time the asking price is constantly chipped away at."
Author: Parakram Rautela