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High Risk, High Reward: How to Sell Luxury Ecommerce Products
Today’s customers have become more educated than ever in using quality products. Although the target of selling quality experience has become easier for brands to comprehend, it is still not less than a challenge to fulfill and accomplish it in the right way. As per a report by Globe Newswire, the luxury goods market is expected to reach $430 billion by 2026.
Since the last few years, digital evolution is at the forefront for all businesses. So, selling high ticket products keeping in mind to serve the elite experience has become a critical aspect for luxury ecommerce retailers, art galleries and other high-considered purchases. However, it is not as complex as it seems.
This guide explains how rewarding the luxury ecommerce realm can become when you deal with it with the right strategies, and how one can make efforts to make more high-ticket sales.
What are High-Ticket Products and Services?
Product profiles are segregated based on risk and derived value. High-ticket products and services bring in more revenue as they are highly priced. They offer buyers a higher value. High-end businesses such as luxury ecommerce, jewelry brands and art galleries deal with high-ticket items. Not only jewelry and art, but cars and furniture are also now considered high-ticket ecommerce purchases.
In a purely economic sense, high-ticket products or services cost more than $1,000 and offer value to clients. Customers invest much more in products or services bought at higher prices. They expect an authentic experience and reliability with those products or services.
High-ticket products are generally expensive but this class is not just based on revenue. One of the most vital aspects of high-ticket products is the need for an immaculate customer experience. Beginning with the first interaction between a client and business to marketing, buying and after -sales service, high-ticket clients demand attention. So, building a digital ecosystem that fulfills their expectations is a priority for luxury ecommerce businesses.
The RealReal is a perfect example of a ‘High Risk, High Reward’ situation. Started in 2011, The RealReal is one of the pioneers of the fast-growing digital market for secondhand luxury. They host luxury ecommerce brands like Gucci, Chanel, Hermès, and Louis Vuitton under their umbrella. The average order value for The RealReal as of June 2022 was around $490. They sell big and sell well. Their high-value clientele loves them and includes Saudi princesses and the Kardashians. They have been growing their earnings by 15% yearly with a smart luxury ecommerce funnel strategy.
Why Should you Target High-Ticket Clients?
The most obvious reason to target high-ticket clients is that businesses can generate greater profit from fewer tickets. This helps reduce the gap between sales and overhead costs. Another vital aspect about high-ticket clients is the brand authority they bring to a business. Not only do they dish out more money, but they also help brands strengthen their position and authority status.
Considering high-tickets from the quality perspective is critical too. When a product or service is expensive, it must offer significant value to the client. Top quality products and services help brands attain expert status and charge premium prices for the value.
High-ticket clients are fewer but need attention and constant nurturing. This is an advantage for luxury ecommerce businesses as they can devote more time to individual clients. High-ticket clientele is passionate and clear about its expectations. So, spending time on nurturing them may generate less transactions but deliver a higher payout. Once high-ticket clients are secured, businesses get more time and overall flexibility.
6 Vital Aspects That Influence High-Ticket Clients Digitally
An American Contemporary Art Gallery, the 2nd largest of its kind, this art gallery is a premium gallery with a very sophisticated target audience. With about 100 influential artists on board, they specialize in innovative exhibitions and selling high-end art.
They approached Icreon to build their digital experiences and transform the art industry. The plan was to create a technology and digital roadmap that would start to drive the organization. A robust database-driven platform that could handle larger initiatives like online sales automation and personalization was built based on the roadmap. From the database structure and system workflows to the front-facing website, a plan was laid out to optimize high ticket sales. The result? The art gallery sold a $1.8M piece of art recently through their digital Viewing Room. So, influencing high-ticket clients digitally is possible but brands need to consider a few vital facts to optimize conversions. They have been discussed below.
1. Self-Assessing and Products Analysis
The very first step you must take is to analyze whether your products have the potential to attract high-ticket clientele or not. This step involves comparing your product and assessing your business experience level with the market and competition.
Suppose you were initially a low-seller and are transitioning from low-ticketing to high-ticketing. In that case, chances are high that your products and business need rebranding so you can make them look more valuable and intimidating to attract high-ticket clients.
Know that, high-ticketing is not about buying and selling expensive products. This technique majorly revolves around delivering a seamless and rich experience that ultimately pushes the buyers to invest more into your products. If this is the case, you need to self-assess your business and test whether the price you’re looking to propose for your products in the future are worth the value proposition or not.
If not, then invest in delivering a rich, soothing, seamless product and customer experience. Once that is sorted out, you can start aiming for further steps listed below to attract and make high-ticket clients invest more into buying your products and services.
2. Target Right Audience
Targeting the right audience is the cornerstone around which marketing and sales strategies evolve. All industries from financial, industrial, and healthcare to technology and software have a high-ticket audience. So, identifying the right target audience for a business is the first step to optimize the high-ticket sales funnel.
Target audience can be segregated in specific buyer personas that match real user profiles. Buyer personas are helpful to understand clients' needs and create strategies to exemplify the shopping experience. When prospects and customers can relate to a brand, businesses can strike valuable conversations.
3. Customer Journey
Once the business has created relevant customer profiles, it needs to create a customer journey map. It helps businesses dive deeper and understand the buyer journey from a customer’s perspective. Brands should keep in mind that all digital touchpoints and content are important.
The customer journey aspect is for understanding audience behavior while making a high-ticket purchase. It encompasses all the digital touchpoints and needs a comprehensive approach. For high tickets, the first point of customer interaction is as crucial as the final payment button during the customer journey.
Brands can build awareness and the intent to buy among customers via different mediums. It can range from interactive websites, mobile apps, social media pages or other digital assets. Understanding the customer journey is useful for both online and offline situations. When relevant content is provided to users, conversions go up.
4. Technology and Digital Assets
When a business understands its clients and their expectations, a technology roadmap is the next step. The American Contemporary Art Gallery example above serves as a skillful use case to understand how innovation can drive luxury ecommerce. Technology can be used to track customer data, analyze customer behavior, and automate repetitive tasks.
Technology drives digital assets to deliver what customers want. To align tech stack to your customer journey, selecting agile technology is the best bet to streamline workflows. These automated workflows may include repetitive tasks, improved data accessibility, project management and SEO.
An ideal tech stack with relevant customer data can bring customer experience to life. Assessment of tools and software is necessary to overcome any challenges and maintain brand exclusivity. It also helps estimate and right pricing discussed in the next section.
5. Revenue Model - Costs and Pricing
The business knows its audience and understands its expectations by now. Once the digital touchpoints, customer journey and the technology are mapped, it is time to define the the revenue model. It begins with the breakdown of different input costs related to client management. These input costs when added to overhead costs such as monthly subscriptions for tools and software used, make up operational costs. This amount is used to build the desired high-end product or service.
Next, comes the estimation of service costs incurred to deliver the desired value to clients. It is essential to consider this at this stage. The prices for high-ticket clients are justified only when the emphasis is on the value delivered. These costs, when combined with operating costs, serve as a base for future pricing decisions.
It is recommended to decide the nature of transactions, and purchase relationships beforehand to arrive at the right estimate. This is the stage where you reach a revenue model. It can be a subscription model, an exclusive product customization request or some additional value that becomes the premium ticket.
6. Authority, Attention and Action
The strategic and tactical aspects needed for luxury ecommerce should be clear by the time you reach this step. Next, you must work on building ‘authority’ in the industry. Resources such as informative blogs, interviews, webinars or videos are great to address customer pain points. When customers can relate to these resources, the conversion rate improves significantly.
Guest posting, backlinking, affiliate programs and social media groups play a pivotal role in establishing authority for high-ticket sales. Through authority, brands get attention from prospects and competitors alike. Gaining client trust is what businesses need to increase high-ticket revenue with prompt action.
A reliable brand reputation with existing clients to earn quality client referrals helps brands promote word of mouth. Like this, there are many effective ways to put the acquired attention and authority to work. High-ticket sales are better executed when brands are aware of the new demand. They can then use smart tactics to convert this demand into a relationship.
6 Actionable Ways to Land High-Ticket Sales Consistently
Luxury ecommerce sales become lucrative only when brands know the customer’s appetite for transaction, pricing, brand expectations and delivery. High-ticket clients buy experience, not just the product or service. So, while targeting high-ticket clients, it is recommended to avoid direct selling and design and execute holistic customer experience.
The last thing a high-end client wants is a sneaky salesperson in their mails pushing him to take a decision. Businesses need to add value to customer experience in luxury ecommerce by approaching strategy creation and prospects in a structured way.
1. Robust Product and Customer Analysis
Businesses need to start high-ticket sales strategy by analyzing their products and customer expectations. A holistic view of customer needs, expectations, experience, and value is essential to generate the most out of this exercise. Observing competitors is a terrific way to learn and bridge the gap between strategy and implementation. This may mean that businesses might have to rebrand their offerings to make them seem more valuable. With the dominance of digital, it is vital to justify that the price is worth the value proposition. Once that is out of the way it is time to work towards building rapport with leads.
2. Online Reputation Management
Creating the desired online brand image is not an easy task for luxury businesses. Maintaining it online is even more challenging. So, businesses need to identify relevant groups and communities to optimize targeting while building an ideal digital reputation. When customers see businesses adding value to their life rather than being just a seller, high-ticket leads get converted consistently.
The best way to maintain an exclusive online reputation is to deliver value to your customers. Satisfied high-ticket clients add value to your brand and help increase market value. A good online reputation helps attain more new clients and widens the revenue stream.
3. Build Experiences Not Sales Decks
When a customer walks into a brick-and-mortar luxury store, they are greeted with empathy and assisted in real time. Adding empathy to your brand voice can act as one of the strongest weapons to convert high value clients. When pain points are addressed with empathy, it becomes easier to help clients understand how a solution can solve their problem.
Customers are the heart of a business. Trust is the key that drives luxury ecommerce sales. So, it is about exploring prospect needs through conversations and fulfilling them. The right approach is more vital than the elevator pitch. When work quality is high, brands are valued as problem-solvers, and not just businesses.
4. Place Strong Filters
High-ticket clients expect brands to serve them with the highest quality experience. So, brands spend a lot of time and effort on all the leads to maximize conversions. Now, the approach is not wrong but working on prospects without considering their potency might not be a good decision. This is true, especially with prospects in luxury ecommerce. So, luxury brands need a robust filter mechanism to identify the ideal targeted personas. When brands create the right filters, it helps them identify clients based on priority. Once leads are prioritized, brands can accordingly manage their time, effort, and resources. Sticking to the ideal buyer persona helps luxury ecommerce brands to nurture the most ideal leads first.
5. Train Your Team to Work with High Value Clients
Pivoting the best resources on high-ticket clients is a safe bet to retain them in the longer run. So, training the team to expect and deliver what the client needs is of paramount importance. This is the primary point where the risk comes in. Without a robust client support team, businesses not only face issues onboarding new clients but can also lose loyal clients.
A team that knows how to provide attention and add value to their clients is needed to dominate luxury ecommerce. Even a simple follow-up is sometimes enough to let prospects know that the brand cares for them. The training plan needs to be consistent. Top leaders should encourage a customer-centric approach to make approaching high-end clients less intimidating and pushy.
6. Focus on Nurturing Your Relationship with the Client
The best thing about luxury ecommerce is that the number of clients is less, but the conversations are surely not. When a business has only a few high-end clients to satisfy, personalizing customer experience becomes easier. High-ticket clients demand attention and need value to stay. So, businesses need to communicate and spend more time with high-ticket clients to forge a loyal relationship.
The highly considered nature of luxury ecommerce purchases means that businesses need to nurture client relationships as per the assessed needs. The customer should feel empowered. Talking about the latest trends, news, and industry updates also help develop a stronger bond and establish trust.
High-Ticket Closing – Sealing the Deal
Digital dominance is the most desired thing among top ecommerce luxury brands. High-ticket sales are more about customer satisfaction as the emphasis is on quality not quantity. Creating happy customer experiences is about addressing client’s pain points in a way that they request your proposal. The process of customer satisfaction is way beyond just selling.
Effective client management and client reporting helps brands make high-ticket sales lucrative. It is always about experiences. When a client gets a sense of belonging to an exclusive tribe by associating with your business, conversions go up automatically.
With more customers moving up the luxury pyramid from emerging markets, luxury ecommerce brands need customer-centric strategies. They must ensure that clients are provided with better, customized, meaningful experiences and services online and offline. Explore Icreon’s Digital Ecommerce & Consulting Services for better understanding.