Feature: Luxury incentives: Objects of desire

Catherine Forrest (pictured), business incentives manager at House of Fraser, examines how luxury incentives have evolved

The luxury incentives market includes a huge array of products which symbolise exclusivity and aspiration, but as with all motivation schemes, it’s vital to get it right when buying luxury goods for use as incentives. Running such a scheme requires a real understanding of the market, but also of the people who make up that market – and just what it is that turns them on, the triggers that will make their experience of a specific brand rewarding and unique.

Firstly, perhaps we should determine what constitutes luxury. One could argue that it is attributes such as quality, and named brands that are aspirational and expensive. It is also brand recognition in whatever you’re buying – whether that be cars, watches, or clothes. And it’s fair to say that consumers consider brand first and price second hence making their decision to buy based on label. This makes sense – if you walk into an designer store and pick up a top by Chloé you might decide it’s worth up to £400, but if you pick up exactly the same top in a street market, no one in their right mind would contemplate spending over £10. Luxury can also be linked to the way in which dreams are made real – something special or even something superior with the “feel good” factor.

The term “luxury” is changing its meaning, becoming more attainable as brands attach the word to more products. Luxury is now more mainstream, addressing the need to live a luxurious lifestyle without having to earn huge salaries. The growth of so-called luxury products makes it simpler for consumers to define their lifestyle around brands and to link into a chain of associations, including demonstrating their success to others.

It wasn’t that long ago that luxury goods and services were accessible only to the rich and famous – those with huge salaries or trust funds. They were seen as indicators of status and class – an outward sign that you’d “made it”.

There’s a view that people don’t buy or want things for themselves, but rather for what those goods can do for them – recipients of luxury goods find them desirable as they satisfy a number of emotional needs. Some like the association with a high cost item, others like the cachet of, say, wearing the same upmarket watch as their favourite image-conscious footballer.

Recent years have seen an increase in women’s earning and spending power, and with the well-known strapline “because I’m worth it” providing a rationale for many women’s shopping habits, it’s easy to see how luxury goods – even highly priced ones – become the new “must have” item, reassuring consumers that their efforts have not been in vain.

But in today’s tight economic conditions, can companies focus on motivating through luxury goods? And will this strategy work? Many consumers are not keen on the conspicuous consumption of the 1980s. Increasingly, possession of “things” – especially luxury “things” – seems less important. Is the move to a more altruistic and greener lifestyle of greater appeal? Has the “greed is good” mantra given way to “green is good”?

Many busy people would, though, argue that the greatest luxury is personal time. In today’s busy lifestyle, we multi-task, have a number of stresses and responsibilities and sometimes need to slow down and live in the moment. And as well as wanting more personal time, consumers are wanting more customised and luxurious experiences. Where the cost of air travel has come down, and faraway places like Australia are within easy financial reach of many, people are looking to have new experiences such as going to Antarctica, visiting a Buddhist retreat or seeing the polar bears in the Canadian Arctic. Consumers want an experience that’s special for them alone. And the luxury experience will, in time, embrace a much larger universe of products and services.

So does luxury motivate? I believe the answer is an unequivocal “yes”.

The desire for status and pride of ownership is still a key element in any motivational programme. Many participants in such schemes consider the materialistic aspect of luxury goods as secondary. What turns them on is that the famous names are an indulgence, and proof of their success and earning power.

True luxury is about individuality and exclusivity, wanting what nobody else has, and this is why luxury goods or experiences are so good in motivating people to achieve their best. In order to get someone to go that extra mile, companies need to dangle the carrot of exclusivity to make people feel special.

A recognised and upmarket name is the heart of any motivation programme – winners like to be acknowledged and singled out, preferring the cachet of luxury goods merchandise as rewards. A well run, well thought-out motivation scheme can have dramatic effects on the bottom line. But the rewards have to be worth striving for, and I firmly believe that luxury brands can be the trigger to exceptional performance.