As we explained in our Luxury Marketing Part 1: Finding Your Place in the Luxury Market, everything about luxury is crafted to emit an elite aura. Product, price and delivering the ultimate emotional experience are some of the key components to creating a product of perceived high-end value. Branding and PR are also important, but we’ll discuss those in a future article. For now, let’s concentrate on product, pricing and creating an emotional experience, and how they relate to the luxury marketplace.
Product: Are you producing luxe?
One reason why luxe is luxe is because the quality and workmanship are bar none. As the economy begins to recover, many market analysts are predicting that quality will take on heightened importance among buyers of the upper stratosphere. Richard Baker, chief executive of Premium Knowledge Group, a Dallas-based luxury consulting firm, recently commented that some designer firms are, for now, dropping the word “luxury” and returning to their roots in providing craftsmanship and service.
Packaging is another component of a product. Packaging is important not only because it protects the product, but because it can help to promote it. In addition, packaging can make a product stand out when compared to like products. If your artwork is framed, how attractive is the framing? How sophisticated is your crating and shipping? If you create smaller pieces that are packaged in boxes or some other container, are they packaged elegantly? Which would your buyer proudly tote: a generic white plastic grocery bag or a custom-designed glossy bag with a color logo imprinted on the side and pretty ribbon handles?
You may have heard of the marketing term “USP,” which stands for “unique selling proposition.” It refers to the characteristics that set you apart from the competition. What makes your artwork stand out? Why should it appeal to upper-echelon buyers? Your USP is the basis for your marketing strategies, so define your USP and be able to articulate it.
Pricing: How do price increases happen?
Your initial pricing structure was set according to characteristics of your art and that of other local or regional artists with comparable experience. You surely did not begin selling your work for five digits, so how does artwork reach a five, six and even seven-digit price point?
Price increases are justified when there is a consistent demand for your art within several months of hitting the market, and sales of your art regularly surpass that of art created by your contemporaries.
“The best time is when you're experiencing a consistent degree of success and have established a proven track record of sales that's lasted for at least six months to a year and preferably longer,” writes art consultant, advisor and independent appraiser Alan Bamberger in his article, “Art Prices: Price Your Art Realistically” on ArtBusiness.com. “You should also be selling at least half of everything that you produce within a six month time period. As long as sales continue to be good and demand remains high, price increases of 10 to 25 percent per year are in order.” (Read Bamberger’s article.)
“As you get momentum, the price goes up,” states marketing exec Bruce Kupper of Black Twig Communications. “That’s how it is when you sell artwork and other things with an emotional experience. Some artists are perceived as cool and hot and collectible.” The dollar amount of that premium depends on just how “cool and hot and collectible” you become. Your achievements — shows, awards and press that you have garnered — all matter, as does how art professionals stack you against artists considered to reside within the same circle of comparison. Other factors that impact pricing artwork include: an “enhanced” product, location and buyer psychology. Incorporating “extras” into your typical work of art can make an isolated work more significant and therefore merit a higher price. For example, the composition may be larger or more complex, thus requiring more production time and a higher level of technical difficulty.
Location has a huge impact on price. As Kupper, whose firm has offices in New York and St. Louis points out, “A piece that sells in St. Louis for between $5,000 and $25,000 could get picked up in New York for somewhere between $25,000 and $250,000.”
Then there is the psychological aspect of pricing. The reason that prestige or status pricing works in the luxury marketplace is because affluent buyers and those who value prestige and status look favorably on high prices, which give the impression of better quality. “Wealthy people don’t think it has any value at all if it isn’t over $10,000,” comments Kupper.
Delivering an emotional experience
“No one ever wakes up and thinks, ‘I will go out and buy a picture today,’” says David Lester, who, along with his wife Lee Ann, owns International Fine Art Expositions. “It’s always an emotional experience. It’s about creating an exciting place to go and see art.”
The Lesters have been involved in the art world for 20 years and are considered pioneers of the Florida market. Their latest project, SeaFair, is, indeed, an over-the-top art venue. SeaFair is the world’s first mega-yacht that showcases works of art, and serves cities along the East Coast. The idea behind SeaFair is to offer a unique experience to collectors. By-invite-only guests can view paintings, sculptures, jewelry and objets d’art in the 28 custom-designed galleries — a total of 12,000 square feet of rentable exhibition space — located throughout the four decks of the 228-foot pristine mega-yacht. The VIP experience is enhanced with meals prepared by five-star chefs, a champagne and caviar lounge, an open-air sky deck and concierge service.
In Studying Your Target Market, we discussed the importance of knowing your market so that you can develop a strategy to get a select group of people to spend money. When Lester did his market research, he ascertained that wealthy people live within 10 miles of the ocean. “Look at the state of Florida. Everybody lives toward the coast. New York City, Baltimore, all up and down the eastern seaboard,” explains Lester. The price range of artwork depends on the port where the ship is docked as well as the season. “It’s all about tailoring the proper ship board mix to current market conditions,” he says.
Although Lester’s resources — an enormous mailing list, sophisticated cross-marketing (OK, and that grandiose boat) — are unavailable to the typical studio artist attempting DIY marketing. thinking creatively about how to cater to prospective affluent buyers is something any determined artist can do. (Note: Lester cautions against self-marketing, stating, “I believe the best thing is for an artist to concentrate on painting and hire professionals to do the marketing because marketing your art is not the same skill as creating your art and that is not a good use of your time.”) For example, have you ever offered to do a by-appointment private viewing where you bring a few of your pieces to a prospective client’s residence? The client won’t have to lift a finger; he doesn’t have to imagine the piece hanging on his own wall because the wall is right there. What other ways can you enhance the buying experience and satisfy the emotional needs of prospective buyers?
You may be years from sailing among the wealthy, but understanding how to make the luxe list may help you to chart a course in their direction. AC
Contributing writer and communications consultant Ligaya Figueras specializes in business writing, marketing and media relations for visual and performance artists, writers, nonprofit organizations and specialty service providers. Follow Ligaya on Twitter at twitter.com/LigayaFigueras, or friend her on Facebook at facebook.com/ligaya.figueras.