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Luxury: shocking bad service and low customer satisfaction

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Service quality is essential to increase customer satisfaction and loyalty. Personal encounters are crucial to increase the level of service; yet some brands in the luxury sector recruit employees that don’t master the codes of the sector which leads to a complete discrepancy and to dissatisfaction. Here is a true story that just happened to me and that involves Berluti, a brand of the LVMH group, and two other less known brands : Altan and Corthay.

Service quality is at the heart of customer satisfaction

It should be no surprise to you, if you read this blog regularly, that the quality of service influences the satisfaction of customers. The SERVQUAL instrument developed in the 80’s by Parasuraman is still a reference for those who want to understand how to better satisfy their clients and keep them on the long run.

Whereas some sectors have cut on service to privilege prices (think about Ryanair), others have focused on service quality to differentiate. This is the case for instance of Easyjet in the same “low cost” category. Ironically customers got bored of Ryanair value proposition and Easyjet, which was priced higher than Ryanair (yet still reasonably) made effort on service, is about to become the most profitable airline in Europe. Michael O’Leary, the provocative leader of Ryanair, is about to lose the fight.

In other sectors however no compromise can be allowed on service quality. This is the case of the luxury sector.

Different experiences in luxury stores in Paris

Service quality is so central to satisfaction that I like to visit stores and evaluate it. Without the pressure of purchasing anything, it enables me to take the right perspective to judge objectively how customers are received.

This time I decided to visit three stores selling the same product, but in different price categories : Altan Bottier, Corthay and Berluti.

For those of you who might want to get some more information on those two brands, let me refer you to one of the best blog on elegance, Parisian Gentleman. Hugo Jacomet has published several guides on shoes’ brands where you will certainly learn a lot about good and less good shoe manufacturers.

Altan and Corthay : homogenous despite different price positioning

Altan has a small overcrowded boutique in the south of Paris (rue Sainte-Beuve) where Sam receives customers as guests among hundreds of pairs awaiting the right treatment and the desired patina. This place is totally chaotic, smells fantastically good (wax, cream) and Sam works with classical music in the background to inspire his work. Entering this small 20 sqm boutique is an experience in itself. You can hardly find a seat to try a pair. The atmosphere is unique and you feel welcomed by a friend, like at home. The experience also accounts for the quality of service. There is no necessary need for luxury; sometimes the atmosphere is sufficient when it’s complemented by product knowledge. This is obviously the case here. Sam is just passionate about shoemaking and can explain in details the whole process, what his brand stands for, which colors to choose. He’s a real connoisseur and can explain you, as he did with me, the history of the Oxford that made Altan famous. If you pay him a visit you’ll feel it : he really knows what he’s talking about and is eager to share it with you, whether you’re here to buy or not. He’s generous, empathetic and just for that he deserves that you buy something from him.

Corthay is another shoemaker whose store is just a few meters away from the Place Vendome. Pierre Corthay, the creator of the brand, is certainly one of the most talented French shoemaker in existence and was recognized as “Maître d’Art” (Art Master) by the Ministry of Culture in 2008. He’s actually the only Maître in his category.

La Beauté du Geste / The Beauty of the Gesture from Parisian Gentleman on Vimeo.

The entrance of his small boutique is located in Rue Volney, which runs parallel to Rue de la Paix. His best-sellers (among which the emblematic Arc) are on display in two small windows. It doesn’t take long to visit the whole store. It’s no more than 20-30 sqm where shoes are neatly arranged in a clean, cozy environment. When I entered the shop I was greeted by an employee (I won’t salesguy as he was definitely more than that) who was taking care of .. shoes (you guessed it). This young man (in his twenty) was shy, had exquisite manners, and showed at each moment a certain distance. After all it’s a luxury business and visitors are most probably used to certain attitudes. I asked a few tricky questions but here too everything was perfect. You could see he knew about shoemaking (being most probably a shoemaker or an apprentice himself) and that he used to speak to other passionate people. Before I left I was given the opportunity to visit the place where two employees realize the bespoke orders. I felt privileged and after shaking hands I recognized that despite the manners, the shyness, some emotional bonds were created (the same that inspired today’s post). This too is service quality and it fosters satisfaction.

Berluti flagship store : a total lack of homogeneity in the service quality

Berluti is probably the most controversial shoemaker of all. Some love it. Others just hate it. I’m not here to take position. I just visited their store (with absolutely zero intention to buy) and wanted to evaluate their service. The result is just not good at all.

I was greeted by a well-dressed salesguy who was unable to answer my first question. He referred to one of his colleagues who took over. This young guy, while very well dressed, rang hollow. While presenting the products you could feel there was no passion and that he was just reciting a lesson. The few technical details he gave were false which confirmed the numerous recounts I had seen online. I asked him a few questions on the brand and on past products which

The lack of service quality culminated when I was having a look at the newest shoe collection. While I was telling the sales guy I had already enough shoes, he tried to push anyway arguing that “the rental costs of the store were high and needed to be covered”. I certainly don’t like manners, but a lack of manners is also not acceptable.

All in all the customer experience was not up the positioning of the brand. There is a huge gap between the positioning of the products and the service quality. I observed a lack of knowledge, a lack of distance with the customer which all in all accounts for a lack of courtesy (one of the pillars of service quality).

Berluti from Art of Craftsmanship on Vimeo.

Analysis of two radically different marketing strategies

There is no need to come back on the importance of service quality and on its alignment with your marketing strategy and your brand positioning. Despite huge price differences you can see that the promise was kept at Corthay and Altan. At Berluti it was not. However … I’m pretty sure LVMH knows what it does with Berluti. This brand was confidential and reserved to a few passionate connoisseurs when it was taken over by LVMH. It has now be turned into a cash cow and one can wonder what has remained of its DNA. Yet I do think it’s a wise strategy to make money. Let me explain.

To expand a brand needs credibility. Olga Berluti and her predecessors built this credibility and LVMH bought it (just like they bought Moynat’s credibility in the luggage sector). While the brand was gently progressing and gaining fame beyond the segment of the connoisseurs, LVMH suddenly “opened the tap” and launched an aggressive store opening strategy. The brand didn’t deem at being confidential anymore. It needed to be known, “popularized” (don’t worry the prices were still increasing) to touch another segment of the population, namely rich people with little or no knowledge of the product. Whereas Berluti was a sign of connoisseurship 20 years ago, it became a vector of social prestige that LVMH wants to exploit optimally (remember the Roland Dumas case which, eventually I’m sure, helped increase the reputation and elite status of the brand).

If you refer to Roger’s adoption curve, we could say that early adopters were shoe lovers, real connoisseurs, and that LVMH wants to enter the early/late majority part of the curve to ripe the profits off the Berluti brand.

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Author: Pierre-Nicolas Schwab

Dr. Pierre-Nicolas Schwab is the founder of IntoTheMinds. He specializes in e-commerce, retail and logistics. He is also a research fellow in the marketing department of the Free University of Brussels and acts as a coach for several startups and public organizations. He holds a PhD in Marketing, a MBA in Finance, and a MSc in Chemistry. He can be contacted by email, Linkedin or by phone (+32 486 42 79 42)

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