The truth from a strategic branding standpoint is that it is much harder to “sell up” than it is to “sell down” price-wise.
Courtesy of Tesla
Many real estate agents and firms face a challenge when they contemplate breaking into the luxury end of the market or increasing their luxury market share. The challenge is shifting the perception held by high net worth consumers about their “mid-price range” personal or company brand. One of their biggest concerns is alienating their core referral base because they do not want to be perceived as pretentious snobs or as elitists.
The truth from a strategic branding standpoint is that it is much harder to “sell up” than it is to “sell down” price-wise. This means it is more difficult to have a brand perception of “middle of the road” while trying to list $1M+ homes. It is easier to have a luxury brand perception and attract mid-price home sellers.
The key is striking a balance of sophistication without coming across as pretentious. Apple, who hired the head of the British luxury brand, Burberry, to head their retail store division has nailed this balance. They understand the “halo effect” of including a Hermès watchband in their offerings to attract high net worth buyers. They may not sell many of them, but this strategy casts a glow of luxury on all the other less expensive bands and also their entire range of products.
Tesla just achieved the same result from the halo effect strategy. They launched their company as a sophisticated yet not pretentious luxury brand competing with Mercedes, BMW, Audi and Lexus, but squarely in the electric car niche.
We happened by our Tesla dealership in Santa Barbara last week and could not believe what we saw! There was a line of customers around the block waiting to reserve a Model 3. This is their new $35K mid-price sedan capable of seating five and going 215 miles on a charge, and 0-60 mph in less than 6 seconds. It is coming out in late 2017.
In just a few days over 276,000 people reserved a Tesla Model 3. That equates to an $11.6 billion backlog of orders! It is much easier to "Sell Down" than to "Sell up", price-wise.
Written by Ron & Alexandra Seigel-
ABOUT: Napa Consultants, International is the leader in brand strategy for the luxury real estate industry. They work exclusively with professionals who are passionate about gaining or sustaining market leadership. With an expertise in personal branding, company branding, luxury real estate website design and social media marketing they help their clients become the breakaway brand in their marketplace.