The Presidents’ Club
The Presidents’ Club
Luxury Society, The Global Partnership, McKinsey and Cartier have been invited to share their knowledge about the ultra-wealthy:
Who are they, how to find and reach them?
Monaco, the Fairmont Monte-Carlo, Sunday 01 December 2013
For nearly 10 years now, all luxury travel industry players have been waiting for this to happen. Convinced by the tremendous success of American Consortia, several industry players regularly said “the initiation of a European Consortium is overdue”.
Traveller Made®, the European consortium was created one year ago and has just gathered in Monaco “La crème de la crème” of the best European travel designers with their most respected luxury partners in the hospitality industry and their incoming travel partners.
Traveller Made®, the new seal of quality of European travel designers.
A brand new initiative in Europe
60 European Agencies among the best travel designers from 20 European countries have signed up to Traveller Made® membership in the last 12 months.
“These Agencies were initially recommended by a group of renowned luxury hotels and a few of the best incoming agencies at the long haul. They match our manifesto built on 3 pillars: 1-On-demand tailor made travel creation, 2-capacity to handle ultra-high net worth travellers and 3-an obsession for service” says Quentin Desurmont, President of Traveller Made®.
Once they are invited to apply, the selected agencies have to fill in a detailed application form explaining their methods of designing luxury tailor made journeys, revenue growth and strategic vision to ensure they fit into this elite selection.
In parallel, Traveller Made® has started to create an ecosystem with their best travel partners. 161 hotels amongst the finest in the world have already signed up (see on www.travellermade.com), so have 22 of the most experienced incoming agencies.
“All our Member Agencies are guaranteed to be considered by the luxury travel industry as the best players in Europe. They can have access to any hotel general manager over the phone to make sure their clients will be treated as super VIPs” says Quentin Desurmont.
A fast changing European market
The emergence of luxury and bespoke travel designers in Europe happened in the last 5 to 10 years. They have offered an appropriate response to the growing needs of the ultra-high net worth travellers (families owning more than USD 50M in net assets). For a period, when most of the innovation came from low cost travel and major online distribution, a handful of travel designers have understood that the big European middle market pre-packaged-producers-on-catalogue had no intention whatsoever to adapt their processes to the demanding desires of the ultra-wealthy.
However, despite the tremendous capacity of these young travel designers to deliver quality resulting in strong satisfaction and therefore loyalty, their ability to create awareness is limited by their size and by the difficulty for any brand to find and reach the super wealthy.
The end of a massive confusion in finding appropriate travel professionals
Added to this difficulty in creating awareness is the inability of internet search engines to give the right answer to somebody looking for luxury and tailor-made travel creation.
In France, on any search engine, such as “voyage sur mesure” (meaning bespoke):
More than 70% of results in adwords or SEO on the first page are companies supposedly unwilling by strategy to produce pure on-demand tailor-made journeys. And more than that, none of the companies listed have ever been recommended by our pre-selection committees. They are certainly nice companies and good brands, but they just consider the bespoke word as a strong marketing concept, not as a word with real production significance.
Words have meaning. The ultra-wealthy know it, and they are upset by this lack of meaning behind words.
“Now with the Traveller Made® seal of quality, wealthy people know who are the real bespoke travel designers in Europe able and eager to put all their energy and experience to providing them with the appropriate service, and the most amazing travel experiences,” says Quentin Desurmont.
This list of the best travel designers in Europe is not final, it will enlist more agencies. A potential of 150 to 200 companies have been established by experts all over Europe.
The Presidents’ Club 1st edition
For the first time, 131 members and partners gathered as members of a same family, the European family of luxury travel design. This event happened in at the Fairmont Monte-Carlo and was concluded by a dinner-cocktail in the Salle Empire at the Hotel de Paris.
Quentin Desurmont, President of Traveller Made® presented the brand’s 3 ambitions based, according to him, on his 3 obsessions as a Travel Designer:
– How can our brands find and reach more ultra-wealthy travellers?
– How can we improve best practices sharing with all our partners in the luxury travel industry to better satisfy our clients?
– How can we create and capture more value in an internet era that created perfect market conditions everywhere leading to smaller and smaller profit margins?
Also, Quentin Desurmont shared his vision on how different luxury goods are from luxury services, especially travel services, and the meaning of these differences in terms of business impact. This is essential, as very often when we mention luxury, most people associate luxury brands to luxury goods.
Luxury Travel is a very intangible experience. It is more difficult to show, represent and sell than a Luxury Good that is very tangible and can be photographed, touched and even tried.
Luxury Travel is ephemeral. When it is finished, it has physically disappeared. A Luxury Good is everlasting and can be transmitted to the next generation. However, a Luxury Good is everlasting, but will end up in a safe. Luxury Travel will stay in one’s mind and heart for life.
Luxury Travel is very often about shared human experiences with the loved ones. A Luxury Good is in most cases a very personal treat.
Luxury Travel often relates to secret retreats, historical discoveries, meaning and feelings. A Luxury Good often refers to beauty enhancement and powerful seduction.
Luxury Good consumers “zap” from novelty to novelty. Luxury Travel consumers become addicted to their consultant’s advice and dedication.
Luxury Goods generally communicate on emotions and desirability. Luxury Travel is the emotion in itself, therefore it often addresses the rationale side of perfect execution.
So what if luxury goods met with luxury travel experiences?
The day hinged on 3 moments. A conference in the morning with renowned speakers, a forum in the afternoon where every member could meet with every partner, and a lunch and a dinner-cocktail in 2 of the most amazing rooms in Monaco: The Crystal Room at The Fairmont and The Salle Empire at The Hotel de Paris (SBM).
What are the latest trends in the luxury Industry?
Sophie DORAN is the editor-in-chief of Luxury Society, an online news and analysis resource and B2B professional networking community that unites all sectors of the luxury industry. Luxury Society aims to inform and connect its 30,000+ members, by facilitating a forum for debate, collaboration and the creation of outstanding business opportunities.
“Luxury is now for the masses and the classes, according to François-Henri Pinault” revealed Sophie. An increasing number of luxury brands have become more and more accessible, achieving as much awareness as consumer brands like Coca Cola, Amazon and Facebook.
Barriers to accessing luxury are increasingly removed by the Internet, whether it be flash discount sites for luxury goods or access to discounted 5* star hotel rooms. Increasingly luxury brands are also rolling out mass customisation options – previously reserved for the super-rich – to the masses, who now expect personalised products & services. As a result the ultra-wealthy want even more extraordinary luxury goods and experiences, and more than ever, expect the impossible.
“In the information age, customers no longer buy products, they experience brands” she explained. Even in luxury goods, industry trends are moving from products to retail experiences, from mass production to mass customization. Not only do brands create entry-level products, they also create exceptional pieces. Price and value customisation, traditionally a feature of services, have now appeared in luxury goods.
Sophie also highlighted the increasing diversity and mobility of the ultra-wealthy, “homeless with 20 homes” as described by one luxury brand executive. As wealth centres shift from West to East, the needs and expectations of the wealthy are changing, as is the definition of luxury. Europe is no longer a market full of Europeans and it is important to understand UHNW individuals on an individual level, taking into consideration their culture, values and beliefs.
“It is a popular myth in the travel industry that the super-rich only play golf and go to spas” she concluded. Instead the super-wealthy want pure bespoke travel creation with 100% flexibility, 24/7 service and 100% reliability. “When you want to deal with the ultra-rich, you have to forget your job description; you need to do whatever is required of you to get the job done.”
Do we have enough ultra-wealthy households in Europe to build a strong luxury travel industry?
Dr. Michael J. OLIVER is co-founder of Global Partnership Family Offices and a Senior Lecturer in Finance at the Open University. Global Partnership Family Offices serves the family office community as a private and impartial peer-to-peer networking collective.
Michael starts by a clarification on wealth segmentation:
• Those with US$1 million to US$5 million in investable wealth (so-called ‘millionaires next door’);
• Those with US$5 million to US$30 million (so-called ‘mid-tier millionaires’),
• Those with US$30 million to US$80m (‘HNWIs’).
• Those with US$80 million to US$250m (‘UHWNIs’)
Family Office money is over USD 250 M per household.
In the US there are approximately 2.000 households owning over USD 250 M in investable assets. The Western European market accounts for 1.600 households. This figure certainly reaches over 2.000 families in the entire geographical Europe.
European wealth is made of new and old money. Some family offices are the 15 generation descendants!
On holiday the super wealthy want privacy and remote locations. They have concerns with service providers around privacy, reliability and trust. It is difficult to get them on board. But once you get them – and are attuned to their needs – it could be for life.
So Europe is indeed a very big market for the very wealthy consumers.
Is a segmentation of the ultra-wealthy possible?
Nathalie REMY co-leads McKinsey’s work for fashion and luxury-goods companies in Europe, the Middle East and Africa. She focuses on branding and merchandizing topics, as well as growth and international expansion.
Nathalie Remy points out that segmenting the ultra-high-net-worth individuals (UHNWI) is a complicated exercise for three main reasons: there is little data available, small samples mean limited statistical significance and large standard deviations, and this group is highly heterogeneous. The solution consists in individual profiling, intimate understanding of each person and the ecosystem they live in. All this information can only be collected by means of observation, as opposed to asking people about their preferences, and the only way to observe is to be very close.
What are the “4 Ps” of luxury for the ultra-wealthy?
The ultra-rich want what they don’t have, which is often what they can’t buy easily.
Nathalie Remy presents the “4 Ps” of the UHNWI needs in the luxury industry, using several brands to illustrate her demonstration.
UHNWI want to be part of an exclusive community and be recognized as such. The most efficient marketing approach would be person-to-person word of mouth as an exclusive way to build brand awareness and consideration.
At a time of increased mass-customization, wealthy people want more personalization, and are keen on tailor-made items. This is true with products but also with services. This means creating a personal relationship between a customer, the staff and the brand. Examples include the loyalty programme of Neiman Marcus, which targets the ultra-wealthy, and Louis Vuitton’s idea of organizing an exclusive trip for their top 10 Chinese clients.
Adding a personal development dimension to the luxury experience is a key to seduce people eager to improve their skills, culture, arts, science, lifestyle… and travelling can provide a perfect opportunity for personal development.
Perfection is intimately linked to luxury, and UHNWI expect the highest level of perfection in any product and service they purchase. It is a challenge, but it is also the key to loyalty. For best in class luxury brands, both processes and staff training are therefore based on an acute attention to details, since exception should always be the standard.
How to address the ultra-wealthy?
Anne-Laure LE SAUX
Works at Cartier France. Anne-Laure is in charge of Business Development and CRM.
Anne-Laure explains how Cartier transforms a prospect entering a Cartier store into a long term customer.
Cartier has historically been the jeweller of the kings. Every sales associate aims at treating customers as kings and unique human beings.
Selling to the UHNWI is like a big bang: it must be a perfect match between an exceptional creation, an extremely talented sales associate and a very unique client. It might take years.
She shared hints on how to address customers, with a love of one’s job, knowledge of the product and humility which are the 3 pillars of Cartier for a respectful relationship.
Anne-Laure presented the 4 phases for creating a relationship with a client:
Discover, Understand and Sell
The “Discover” phase can take up to 80% of the total time spent with the client. It is the founding step of a long term relationship. For the client it should be a pleasant discussion. Every detail counts. This moment must be made an exceptional encounter. The real luxury is to feel genuinely, authentically welcome. Importance of the first moment: boutique set up, sales associate’s body language… Who is the client? Why is he/she here? What is his/her motivation?
A brand shouldn’t be intrusive. To encounter a new client is a delicate recipe.
Once a commercial relationship built, it is time to thank and treat the client: money-can’t-buy experiences such as meeting the experts. It is also important to meet clients away from the boutique to live a wonderful experience and discover the client even further, a personal commitment that will be rewarding.
It is also important to offer the sales associate the tools and opportunities to enable them to share clients’ passions and meet with members of their inner circle.
Anne-Laure presented videos among which an interview of Pierre Rainero, Director of Image, Style and Heritage at Cartier in which he explains the DNA of the Maison underlying in the Odyssée movie.
“It is a paradox that Europe, being the continent of the most luxurious and successful international brands and one of the wealthiest regions in the world, is still a very small market when it comes to the industry of luxury travel designers, especially in comparison to the USA.
Traveller Made® has set the ambition to share market intelligence with other luxury brands to help unleash this great untapped market and to support the 60 best European Travel Designers to increase their market size and their quality of service” said Quentin Desurmont, President of Traveller Made®.
Rendez-vous is set for the second Presidents’ Club 2014.