The luxury market opens the door to prestige, profitability and the kind of sophisticated clientele that most companies want to work with. This space is defined by fewer but larger transactions, opportunities to achieve greater margins while working smarter not harder and elevating your brand.
Most brokerage owners recognize that the luxury market opportunity is too big to ignore; but many do not fully understand where to start and what is involved in serving this market well.
The reality is that even though you are successful in the mid market offering similar products and services you are in a different business than the luxury sector. Why? Because the clientele, their quality and service standards and their experiential expectations are totally different. They expect exclusivity and service curated to their unique individual circumstances.
Most brokerage owners recognize that the luxury market opportunity is too big to ignore; but many do not fully understand where to start and what is involved in serving this market well.
The reality is that even though you are successful in the mid market offering similar products and services you are in a different business than the luxury sector. Why? Because the clientele, their quality and service standards and their experiential expectations are totally different. They expect exclusivity and service curated to their unique individual circumstances.
When the very affluent client is buying or selling a home, they are not just buying or selling a home. They are making both a major investment decision and very often a significant lifestyle change. They are looking to enjoy a seamless experience with a change agent they trust who will guide them through the entire process making sure that their family, lifestyle, business and social lives are not disrupted.
The market is also different because the extremely high-end properties often take longer to find or sell. Often the client is not a full time resident who is on site at all times resulting in the real estate agent taking on a range of responsibilities and roles that are not required in your typical “list and sell” transaction.
When you are starting your journey into the luxury market there are a few important factors we advise our private clients to consider:
The market is also different because the extremely high-end properties often take longer to find or sell. Often the client is not a full time resident who is on site at all times resulting in the real estate agent taking on a range of responsibilities and roles that are not required in your typical “list and sell” transaction.
When you are starting your journey into the luxury market there are a few important factors we advise our private clients to consider:
- Have a clear understanding of luxury and the luxury customer. All great luxury businesses and their teams have a clearly-defined point of view of what luxury means to them… and, more importantly, what it means to their customers and clients. If your clients feel that you are not comfortable with luxury they will not work with you. We call it your Luxury Mindset. Too many luxury businesses do not have a clear Luxury Mindset and their customers can sense it. The Luxury Mindset must be a critical part of your luxury team’s identity and culture to serve as a point of connection with your luxury clients.
- Consider the need to build a separate brand or division dedicated to the luxury market.
Your existing mid market business and brand is not likely to appeal to luxury clients, developers and other opportunities. You may need to create distinction, a space that is exclusively designed for a new level of buyers and sellers. They need to feel that this space is exclusive and sophisticated and that it represents them. They will select the brand and teams that offer it. Your branding and marketing collateral needs to reflect the premium standards expected by this clientele and be distinct from the middle market identity of the brokerage.Creating a sub-brand such as: “The Luxury Collection” or “Prestige Collection” is often an effective way to leverage and even enhance your core brand while creating a separate identity for your luxury group.
- Develop dedicated talent and expertise focused on the luxury sector. Serving the luxury market requires brand distinction and credibility. Your luxury team needs to be carefully selected and needs to be trained and educated to develop the expertise to serve luxury clients well in order to be credible to those clients. Many luxury brands, especially fashion and lifestyle brands invest in training their team members on the culture of luxury products and services, the unique psychology of elite clients and the protocols of handling each step of the client journey. Invest in Talent and Training; this can include hiring brokers with experience in luxury and regular training in all aspects of luxury marketing and service.
- Establish connections with high net worth individuals, investors, developers and other strategic partnerships. You need to start being plugged into the right networks to over time become known as a brand in the luxury market. These strategies should use platforms popular with affluent audiences and involve creating networks with organizations and professionals that regularly serve and interact with high net worth individuals, such as international brokerages and networking groups, other luxury goods and services, luxury property developers and influential lawyers, bankers and wealth managers.
- Build a White Glove Concierge-Level Service Capability. Offer service where every detail is handled with precision and provide exclusive memorable experiences. Your offering should address the broader range of complex needs of the typical luxury buyer or seller. Expand your networks of service providers and experts to address the range of service needs that these more complicated clients require.
- Establish Credibility in The Luxury Market. Document and Publicize Your Luxury Track Record by securing high profile listings: we have seen how even one very visible sale in the luxury sector can boost credibility. Highlight achievements by publicizing high profile listings, testimonials and relationships.
Your key focus is to become recognized as a player in the luxury sector, first by establishing and communicating your track record in a way that gives you credibility and then differentiating yourself by offering a more complete level of concierge services. Because that is what the most affluent clients are looking for. To quote one of our own clients: “They are NOT looking for an agent, they are looking for a Concierge”.
The good news is that this luxury sector is not well-served in many markets by the largest of brokerages. These firms tend to be very traditional and conservative in their approach and often benefit from the international reputation of their brand. In our experience only a small percentage are excellent concierges. Smaller, more agile players can and have been successful by being more flexible and client-focused, offering a broader and more complete range of concierge-level services, including establishing networks of the kinds of service providers and experts that many luxury buyers frequently need.
Word of mouth travels fast in the luxury market. Elite clients have more money than they have time. When elite clients find someone who can solve their problems in a memorable way, they want a relationship with that someone. They will then come to those someones with other opportunities, including introductions to their friends. That is why a long-term relationship with a loyal customer is a luxury business’ most important asset.
Brokerages that want to gain a higher share of the luxury market should recognize that it is a process that will take some time and investment. It can be done and the payoff will be substantial but it requires strategy and commitment.
Getting Started
Moving into the luxury market means that you are setting up a new business unit, a division or elite team of experts, either within your business or alongside your existing business.
It requires a business plan, resources and commitment. We have found that the best way to get started is to:
The good news is that this luxury sector is not well-served in many markets by the largest of brokerages. These firms tend to be very traditional and conservative in their approach and often benefit from the international reputation of their brand. In our experience only a small percentage are excellent concierges. Smaller, more agile players can and have been successful by being more flexible and client-focused, offering a broader and more complete range of concierge-level services, including establishing networks of the kinds of service providers and experts that many luxury buyers frequently need.
Word of mouth travels fast in the luxury market. Elite clients have more money than they have time. When elite clients find someone who can solve their problems in a memorable way, they want a relationship with that someone. They will then come to those someones with other opportunities, including introductions to their friends. That is why a long-term relationship with a loyal customer is a luxury business’ most important asset.
Brokerages that want to gain a higher share of the luxury market should recognize that it is a process that will take some time and investment. It can be done and the payoff will be substantial but it requires strategy and commitment.
Getting Started
Moving into the luxury market means that you are setting up a new business unit, a division or elite team of experts, either within your business or alongside your existing business.
It requires a business plan, resources and commitment. We have found that the best way to get started is to:
- Deepen Your Knowledge of the Luxury Market.
Learn all you can about the market, the competition, the clients and investors and the important relationships and partners you will want. Where are the high profile listings? Who is getting them now? Who are the most successful agents? Why? How do they market themselves? Who are the clients and investors and where do they come from? Who are they connected with? Who do you need to know?
- Set Realistic and Measurable Goals. Be realistic, patient and disciplined. This is a long term process with great payoffs. It is usually effective to set monthly or quarterly goals when you are first starting out.
- Establish a Marketing Plan. How does the best competition market and brand themselves? What will work best for you? How will you create a new identity and brand for your luxury service team? A new Division? Brand? Sub-Brand? How will you publicize its creation and promote it to the new market?
- Identify an Elite Team. Select candidates for your new luxury team and a possible leader. They should be your stars. Establish a transition plan so they can eventually dedicate themselves fully to their new luxury market. Determine whether any strategic outside hires will accelerate your progress.
- Design Your Service Capability. Determine what new capabilities and offerings you need to add along with a development plan. How will you operationalize these new services to assure quality and consistency? What networks with other specialists and experts do you need to build?
- Training and Development. Assess what training will be required to assure that the new team fully understands luxury, the needs and psychology of the luxury client, and how to market to and serve that clientele at the elite level.
- Create a Budget. Understand what investment is required and how you will generate your desired return on investment on a timetable that works for you.
- Select an Advisor. Starting up a new business unit is a different process than your day-to-day business. Get the help of an experienced expert who has done this before to better assure your success.
- Set Realistic and Measurable Goals. Be realistic, patient and disciplined. This is a long term process with great payoffs. It is usually effective to set monthly or quarterly goals when you are first starting out.
If your vision for your company is to establish a well known luxury brand we are here to help you elevate your business and business practices. At LDV Elite, we work with brokerages around the world who are, like you, trying to “crack the code” of success in the luxury sector. We use time-tested processes and approaches that work.
Schedule your Business Strategy Session to discuss your strategy to break through into the luxury market in 2025.
Schedule your Business Strategy Session to discuss your strategy to break through into the luxury market in 2025.
ABOUT THE AUTHOR:
Renia M. Orr – a business coach, brand strategist and the owner of LDVElite.com with over 30 years of experience in the luxury market. Her purpose is to help business owners build highly profitable businesses and inspire personal growth.
She is a speaker for Fortune 500 companies, appearing on NBC TV and other television programming. Renia was born and educated in Warsaw Poland where she received her MBA in Management. She now lives in Palm Beach with her husband Sean and a beautiful Havanese, Dolce.
