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7 Feb

Playing hard to get

We keep hearing phrases such as —

"Customer is king,"

"Customer feedback is necessary to improve the product,"

"Customer needs will be serviced beyond expectations,"

in all business discussions.

However, if we flip the narrative around, we catch a glimpse of a world where a customer chases the business and also pays a hefty price. Today, let's look at the extent to which customers go to, to appease a brand.

Imagine a business having virtually no customer acquisition costs (CAC). It is the dream, right?

Well, Hermès — the French luxury design house that specializes in leather goods, perfumery, and jewellery — lives that dream. Because check this out: two of their flagship bags, the Kelly and Birkin, are firstly not available to buy online, and buying them offline is nothing short of a pilgrimage.

Now "pilgrimage" may sound like an exaggeration, but trust me, it isn't.

And Hermès does not shy away from making its customers, even the wealthiest, work to earn the bag. Here’s how they do it.

When someone is looking to buy the Kelly or Birkin, they might have to tour the Hermès boutiques around the world.  In spite of being available only offline, the coveted bags will not be on sale for display.

At the boutique, in case a sales associate (SA) thinks you’re worthy and has a bag in-store, you will be invited to a private room. A gloved SA will bring along a glass of champagne and a single bag. Only if you’re extraordinarily lucky, there may be two or three bags to pick from.

And if you don’t find one at the boutique, you cannot simply place an order. Unless you’re an Hermès VIP, who has the privilege to custom order a bag, your best bet is what I term as taking the pilgrimage to the bag (Bagwati, anyone?)

Here are the steps —

Step 1: Courting a Sales Associate

When you visit a store, your first task is to find a Sales Associate (SA), who is willing to assist you. In most cases, either a friend or relative might have to make introductions with an SA they’re connected to.

If you’re able to establish a relationship with the SA, they’ll probably notify you when a shipment comes in next.

Step 2: Dressing for the ritual

To accomplish Step 1 you have to first do Step 2 well. When visiting the boutique you’ll be looked upon favourably if you’re dressed well, preferably in Hermès.

Step 3: Building credibility for yourself

Once the first two steps are accomplished, you have to now become truly worthy of an SA’s time. For that, it is recommended you demonstrate knowledge of the entire Hermès line, and make purchases at the same Hermès boutique and with the same SA.

Doing all of the above will establish a purchasing history, a step too crucial for someone who wishes to buy a Birkin or Kelly.

Step 4: Don’t make it too obvious

Well, as you build your purchasing history you can’t make it obvious that you’re in it only to buy the Birkin or Kelly. It is advised you diversify your Hermès product portfolio and buy scarves, jewellery, makeup, etc. And after accomplishing all the steps in the process, you’re guaranteed a happy SA.

You may still not bag an exact Birkin and might have to settle for a bag of a different size, colour or leather than you’d hoped for. Additionally, you’ll have to take care of the strict quota that restricts buyers to no more than two luxury bags per year.

As I was reading about this and a few other crazy expeditions people took, I could not ignore how similar the process sounded to courting a person in real life.

Establishing familiarity (visiting the store), sharing information to check for compatibility (dressing up), and consistently sharing your personal life (building purchasing history) and finally not being certain if the dates would lead to a long-lasting relationship or marriage (not getting the bag you want)... everything reminded me of a courting ritual.

Luxury brands following irrational criteria to vet customers made me think that perhaps the customer is not always the boss. In fact, I was surprised to see that there are entire blogs dedicated to guiding people on how to lay their hands on a Patek Phillipe watch. A blog I read mentioned the following pointers for people looking to buy one:

  • Be honest and upfront with your sales agent. Let them know that you understand the high demand for the model but you intend to keep it for personal use.
  • Prove to them that you are not a watch dealer looking to flip the watch for an easy profit. Let them know your profession; it always helps to form a personal relationship.
  • Offer to let them hold the Certificate of Origin while it is under factory warranty. This gives them some reassurance you are not going to “turn and burn” the watch.
  • Let them know this will be the first transaction of many and that you plan to be a loyal customer.
  • Last but certainly not least, tell your sales agent if he is adding you to the waitlist but doesn’t have any reasonable time frame or expectation of delivery to please let you know so you can contact another authorized dealer who may not have as long of a wait.

This exploration made me realise that the brands we call "luxury" or "premium" all have one thing in common:

They do not respond to any market pressure.

Their philosophy, in one way or another, reflects the belief that,

"If the customer wants it badly enough, they’ll put in the work."

Regardless of all the irrational, subjective criteria, a set of customers will jump through the hoops to appease the brand and also pay the huge sum of money required to own the product.The allure of a premium lifestyle brand is the cultivated exclusivity they’ve built.

And this exclusivity is built by making their customers work and feel privileged to own their products.

However, my hunch is that limiting access or making it exclusive, (think invite-only apps) is not a mere "strategy", or "hack" for better customer acquisition. It is an outcome of the product quality and long-term mystery surrounding who exactly makes the cut. It is the outcome of making your customers value your effort in making the product.

For instance, look at an app like Clubhouse. It started with the hype of invite-only access around the pandemic, but instead of limiting access in the truest sense, it instead led to network effects that doomed the product into what I can only call a softporn app today, at least by looking at the way Indians are using it.

It was a failure in that regard because limiting access was a way to simply induce FOMO initially as a marketing gimmick to onboard users.

FOMO can only be a short-term strategy when you announce a new product feature or bet on some new coveted vertical of your business. But it will not run the business or create any meaningful brand association in the long term.

For that to happen, you will first have to decide how premium you would like to be and then behave as a premium brand would. All the while ensuring your product commands that respect.

But this level of enviable security stems from a place of not needing.

And a premium brand that focuses on the craft is able to command a price with full certainty about selling everything that is produced. It therefore can afford to create mystery around ways to access the product or decide who gets access to it.

Anyway, here’s a quote from Robert Greene that I’d like to leave you with —

“Just like Chanel, you need to reverse your perspective. Instead of focusing on what you want and covet in the world, you must train yourself to focus on others, on their repressed desires and unmet fantasies. You must train yourself to see how they perceive you and the objects you make as if you were looking at yourself and your work from the outside. This will give you the almost limitless power to shape people’s perceptions about these objects and excite them. People do not want truth and honesty, no matter how much we hear such nonsense endlessly repeated. They want their imaginations to be stimulated and to be taken beyond their banal circumstances. They want fantasy and objects of desire to covet and grope after. Create an air of mystery around you and your work. Associate it with something new, unfamiliar, exotic, progressive, and taboo. Do not define your message but leave it vague. Create an illusion of ubiquity—your object is seen everywhere and desired by others. Then let the covetousness so latent in all humans do the rest, setting off a chain reaction of desire.”
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