Why Consumers Break Up With Luxury Brands

Key Takeaways: Remember that there must have been a prior relationship to get to a breakup point. Hence, a breakup story will be one of a broken heart and lost love, amplified by disappointment. When brands become like family members, they create extreme value, which is known as ALV or Added Luxury Value. Breakups happen during brand interactions when a single unexpected negative experience wipes out all the positive experiences that came before it. One bad experience is enough to create a breakup — even after years of being “in love” with a brand. One of the most powerful exercises in business is asking your team to share their stories about breaking up with a brand. The chances are high that these stories will be about breakups with luxury brands. And, when they share them, expect that they will be remarkably emotional sessions. As customers, they will, most likely, remember every detail, and their moods will shift towards anger. The probability is also high that they will end their stories by telling everyone that they will never buy a product from that brand again, and it is likely that they vehemently shared their experience with dozens, if not hundreds of people. I encourage you to try this exercise; it will almost certainly be eye-opening. Breakups with brands are fascinating to analyze. The first thing to remember is that there must have been a prior relationship to get to a breakup point. Hence, a breakup story will be one of a broken heart and lost love, amplified by disappointment. It is the story of a customer who did not only buy a brand but was in love with that brand. While comparing a romantic relationship in the real world and a love relationship with a brand may sound awkward, it is actually a very apt metaphor. Luxury brands, when managed well, create extreme value for their customers. They inspire them, create desire, and provide unique memories and experiences that can, in some cases, last a lifetime. In a recent story about their paint-to-sample customization offer, Porsche even compared their cars to family members. And, famously, Patek Philippe watches are purchases you don’t buy for yourself, but "for the next generation," as part of your family's heritage. When brands become like family members, they create extreme value far beyond an object's functional value components — something I call ALV or Added Luxury Value. That is when the customer-brand bond becomes so strong that many of my workshop participants describe it as "falling in love with that bag at first sight.” If the relationship is functional, the customers will cherish that brand and its products — and will assuredly buy more items over time. Passionate collecting is what the best luxury clients do, sometimes owning dozens of Hermès Birkin Bags, several sports cars, or a vast watch collection. Some brands will even make limited editions exclusively available to their best customers — those who fell in love with the brand and spend significant amounts over a given period. The famous waiting time for a Birkin bag, for instance, can be significantly shortened when customers purchase more items, but the wait can take forever for a customer that doesn't have a history with the brand. Love for a brand even unlocks treasures not available to others, just like in real life. But it comes as a catch. When people feel that their love is one-sided and brands don’t care enough for them — or even mistreat them — they will feel frustrated at best. After a certain threshold, they will (over)react and break up with the brand. And the fallout from a breakup is dramatically worse for luxury brands than everyday brands because of the enormous value they create. The more extreme a brand's value, the more love it fosters, creating an even bigger negative reaction after a breakup. In a personal experience, I remember a watch I purchased a few years ago. Owning that watch was a childhood dream, and I finally fulfilled it. I was wearing the watch with joy for about two years — until the moment I visited the jeweler who sold me the watch. In the store, I learned that the brand lowered my watch price by several thousand dollars. The explanation? The brand was not happy with its US sales and felt the watch was initially overpriced. I am sure you can anticipate how I felt. My childhood dream was destroyed after a brand I admired for more than 20 years told me to my face that the product they sold me was not worth the money they asked me for it. This brand breakup was immediate. Years later, I still think about the incident every single time I wear the watch. It lost all its magic. When they told me my watch was not worth what I thought, I felt like the brand had cheated on me. I can’t imagine buying another watch by that brand ever again, which is a typical customer reaction after a breakup. In my research, I found that most of the time, breakups happen during brand interactions when a single unexpected negative experience wipes out all the positive experiences that came before it. One bad experience is enough to create a breakup — even after years of being “in love” with a brand. Brands spend enormous amounts of money identifying affluent customers with an affinity for the brand, but breakup experiences are a costly worst-case outcome. They require an extremely personalized, timely, and deeply caring approach to be corrected if a correction is even possible. And this is an effort few brands do correctly. As a result, many brands lose their top customers while alienating potential new customers who hear about the breakup firsthand. I know cases where a brand lost millions across the lifetime of one customer without even knowing it because some people will just silently walk away. To minimize breakup occurrences, luxury brands must build a meticulous customer experience strategy that gives personal relationship management the same importance as its selling process. Additionally, they need to strengthen internal awareness through rigorous training, emphasizing that luxury follows similar rules to a love relationship and how a brand has a responsibility to nurture that love. Daniel Langer is CEO of the luxury, lifestyle and consumer brand strategy firm Équité, and the professor of luxury strategy and extreme value creation at Pepperdine University in Malibu, California. He consults some of the leading luxury brands in the world, is the author of several luxury management books, a global keynote speaker, and holds luxury masterclasses in Europe, the USA, and Asia. Follow @drlanger

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Why Consumers Break Up With Luxury Brands