The Big Question
What seems like a simple question for most business owners or in-house marketers is actually not that simple at all. It can mean the difference between growth and stagnation, healthy returns or wasted budgets. In this blog post we will break down that question, so companies can take a good look in the mirror and properly evaluate if the time is right for them to work with a luxury marketing agency.
Is this agency right for my company, for my brand? Well, like everything else in marketing, it depends (content is king, context is queen after all). Are you a real luxury brand in the first place, or are you just a mass-market or premium vendor?
You can easily answer the question by looking at your services and offering. Are your prices and packages based on value, or are they high-ticket? Are you providing something unique that is rare and hard-to-get? Do you offer a personalized experience which fulfills a lifelong dream for your consumer? Are high-net-worth individuals (six-figure income or millionaires) your most loyal and best customers, or are you dealing with budget shoppers and negotiators on the regular?
When it comes to evaluating the agency, have they worked with luxury brands before? Are they specialists or generalists? What about your industry, do they match that in some way? Do they have content (blogs, videos, podcasts, downloads etc.) that cover the world of luxury marketing or the specific type of consumer you want to reach? Are they local, national or do they preach a global approach? (Hint: luxury should always be global).
What do you expect out of your relationship with the agency? Do you want to outsource just a certain aspect of your marketing (like design for example)? Do you need a cost-effective workbench type of agency that can just execute your vision or do you want somebody who can also consult you, comes up with fresh ideas and prepares a road map for you apart from doing the actual work? (Hint: the last one is the most expensive but also the best)
A lot of business owners and marketers nowadays want to maintain the status quo or catch up to what they perceive as the industry standard. This is absolutely normal and fine, but can often lead in execution to bad relationships with agencies that are purely based on cost, buzz-words and the short term perspective.
As an example, let’t take a look at an average hotel marketing mix. A lot of small and medium-sized luxury hotels today employ a digital marketing mix that consists of SEO, SEM, OTAs, a decent website, some social media and a bit of email marketing. Minimal costs and maximum reach are usually the KPIs for the buying process. This often leads to a splintered and in-congruent marketing effort of course, because all players involved are not communicating properly with each other, the luxury focus is simply not there and the budgets produce a sub-standard ROI. This is where the famous line “digital marketing simply does not work for us” comes from.
In our experience, a business should be clear about what it wants. Is it brand awareness? Leads? Direct bookings? New markets or more recurring business? Do you want to maintain the status quo, catch up or innovate and attack new opportunities? A good agency that is specialized in luxury but also has a strong overall skill set rooted in the digital world, should be able to help the buyer come up with a proper set of goals at the beginning of the relationship. These goals should not only cover the current short-term needs but also offer something worthwhile in the long run that can help the company grow.
Luxury start-ups tend not to work well with agencies. At Jadewolf Marketing we make a point to not sell to most start-ups unless the buyers can convince us that they have a mature view on marketing and the willingness to invest. Why? Because as a start-up or a company in its first 1-3 years everything usually has to be done extremely cost-effective, which limits the quality of the work and likelihood of success of working with an agency. It is common sense really: less money + less time + more pressure on profitability = less creativity and attention to detail (which we all know is crucial in luxury marketing).
Another common cause of business immaturity is a strong pressure from the top-management to do everything in-house. In-housing has been a huge hype in the last couple years that has (falsely) convinced a lot of brands that the most cost-effective way to do digital is to hire a small marketing team that does as much as possible internally on a payroll. This obviously has lead to some major disappointments in terms of creative output, quality and ROI, since most in-house marketers horribly under-estimate the cost of hiring, training and retention of specialized luxury talent.
Another big thing is the lack of innovation since in-house teams are known to focus on maintaining the perceived status quo inside the company (employees, unless encouraged, will not pitch expensive or risky ideas that can lead to great wins – good agencies on the other side are expected to).
A good rule of thumb for when the right time has come to invest in working with a specialized luxury marketing agency is to look at how much of the annual revenue can be invested without endangering ongoing company operations. A business that can afford to spend 08-15% of their annual gross revenue on marketing and promotion (or that has put aside a percentage similar to that for a new action plan) is in a healthy place to start looking at new agency relationships.
It is only fair that a business should have certain expectations when working with an agency. These expectations need to be communicated and understood early on (which is partially the job of the agency salesperson).
For example, an Italian yacht charter that would like to get more superyacht bookings from North America that hires a design agency to redo their website and invests a five-figure budget in simple Facebook ads instead of working with a luxury direct marketing agency that builds them a suitable yacht marketing funnel might be in for a bad surprise. Clear expectations in terms of goals, payment schedule, timelines, returns and risk are crucial to a long-term relationship that is successful and fruitful for the client and the agency.
To sum it all up again, in our opinion these are the critical boxes every b2b agency services buyer needs to tick before filling out a contact form, responding to a cold email or downloading that promotional agency whitepaper:
- Is my brand truly luxury or just premium?
- Do I really need to reach high-net-worth-individuals to be profitable?
- Is the agency I’m talking to specialized in luxury?
- Do they have expertise in my industry?
- Does their content, social media and website reflect that?
- Is their approach global or are they a local player?
- Do I want brand awareness, leads or direct bookings (or a bit of everything)?
- Am I only looking for the status quo or do I want something more innovative?
- Is my business mature enough in terms of revenue and mindset?
- Can I communicate my expectations and goals clearly?
A business owner or marketer who follows these simple guidelines should, assuming that he deals with an ethical agency, should have a positive buying experience nearly 100% of the time.