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According to data from GWI, the majority of luxury buyers sit in the low and medium-income segments at 60 percent, with 36 percent sitting in the high-income earner bracket. So, even though the majority of luxury buyers aren’t ultra-wealthy, they are willing to splurge for the brand’s allure.
These brands don’t just sell products – they sell an experience. When I recently entered the Louis Vuitton store posing as a billionaire sheikh from Dubai for a YouTube video, I was given a carefully crafted experience designed down to the millisecond to make consumers feel special, important and part of an elite group.
What we uncovered sheds light on the calculated ways these brands manufacture exclusivity, leverage emotional appeals and capitalise on our innate desire for status. While you might not be running a multi-billion-dollar brand, the psychology behind these tactics can be applied to your own business to increase sales and profitability. Here’s what we discovered.
Dopamine-fuelled customer experiences
Customers are conditioned to associate luxury purchases with feelings of status, belonging and self-worth. Opulent store interiors and personalised attention from sales associates trigger the brain’s reward system. Neuroscience tells us these positive associations can trigger dopamine release, making the experience of purchasing luxury goods addictive.
No matter what your business is, improving how customers feel when interacting with your brand can increase loyalty. Small personal touches and attention to detail can create a lasting impression.
Understand the emotional triggers of your audience. Offering an exclusive community, creating a sense of belonging, and appealing to their sense of achievement are all killer neurological tactics guaranteed to trigger those all-important dopamine receptors.
Create scarcity
Limited-time offers or exclusive products can generate a sense of urgency. By restricting availability, you can drive faster decisions and make your products seem more desirable.
One of the primary tactics luxury brands use is the illusion of exclusivity. Louis Vuitton and similar brands practise an intentional scarcity of stock that makes the product seem more desirable. It’s not that they can’t produce enough goods – instead, they carefully limit supply to create a sense of urgency.
By keeping inventory low, these brands build demand and drive consumers to act quickly when items are available. The psychological manipulation here taps into the fear of missing out, pushing buyers to make impulsive purchases. Consumers don’t want to miss their chance to own something exclusive, which lights a rocket behind the brand’s perceived value.
These exclusivity tactics are not just aimed at the wealthy elite. Luxury brands know the everyday consumer craves status symbols and the feeling of exclusivity, even if they can’t afford the most expensive items. The perception of prestige creates a powerful pull, persuading the average consumer that by purchasing a luxury item, they too can enjoy a taste of the high life.
Set your prices to premium
Premium pricing signals quality, exclusivity and prestige. By setting higher price points, brands can create the perception their products are more valuable, desirable and scarce.
This approach can elevate a product’s market positioning and attract a more affluent, loyal customer base willing to pay for perceived excellence. But remember: the quality, service and experience need to match the price tag, or your brand will die faster than a dodo.
Selling ‘status’
Luxury brands sell a lifestyle and the status that comes with it. Gucci is selling you the status that comes from having the big Gucci logo on your tracksuit because they know all the rappers and celebrity influencers are wearing the same things and they know that you want to be like them.
You need to start from a place of: ‘how are you trying to make the prospect feel?’ Because all the masterful copy and brilliant features and benefits in the world won’t do a thing if it doesn’t make people feel something.
So, instead of a long, dull list of benefits of your products, consider how you can position your product as part of a larger, aspirational narrative that slots nicely into your customer’s desires. Who do they want to be? How do they want to feel? Figure out the answer and then work like hell to make your brand the answer they’re looking for.
Luxury brands have shown us that the key to success isn’t just what you’re selling, but how you make people feel when they buy it.
Sabri Suby is the author of the international bestseller Sell Like Crazy, and founder and head of growth at Australia’s fastest-growing full-service digital marketing agency King Kong. The multimillion-dollar agency has since rolled out globally, putting down roots in the US, UK, Canada, and New Zealand. In 2023, Sabri became a judge on the new season of Shark Tank Australia.
Also, read about when Sabri Suby spilled the beans on YouTuber Emma Chamberlain’s coffee business success.
Imagery attributed to Nathan Aguirre.
