If You Catch Them While They’re Young, Do You Really Have a Customer for Life?

The old adage for marketing and branding execs has always been “hook them while they are young and you’ll have a customer for life.” Mercedes Benz brought this sentiment to life as it introduced a product for the youngest possible driver…the driving student. The Mercedes Benz Driving Academy teaches teens to drive “under the guidance of veteran driving coaches. ” It provides interactive, customized driving instruction, a computer-based training program as well as manual transmission instruction “in a Mercedes-Benz SLK Roadster!” In order to help retain these teens as customers, students receive up to $4,000 off of a Mercedes after taking the class.

From an MBA curriculum perspective, this service offering makes a lot of sense. It makes the Mercedes Benz a teen’s first car even if their parents don’t have one. Their positive association with the brand can also be enhanced as they utilize the DMV Drive Test Service where a teen uses a Mercedes to take their driving test. The discount combined with a teen’s heightened comfort with the car they learned to drive in is expected to increase the likelihood that a student’s first car will be a Mercedes, if their parents can afford it. But is this a good thing?

...For a luxury brand like Mercedes, we’d argue this effort is a mistake.

While for some everyday, more basic, brands this would be a winning combination, for a luxury brand like Mercedes, we’d argue this effort is a mistake. Part of what makes a luxury brand so appealing is that it isn’t easily accessible to every customer at every stage of their life cycle. Talk to today’s luxury auto driver and most likely, their first car was not a luxury vehicle. That luxury vehicle may have been a personal reward after they reached a certain lifestage or received a big promotion. Part of what made it so meaningful was that it was inaccessible for a while and they had to aspire to achieve it. Making a luxury good easily accessible lessens what makes it so desirable.

As it applies to Mercedes Benz, the MBDA may increase the likelihood of a Mercedes becoming a driver’s first car, but it decreases the chance that a teenage Mercedes driver will remain a Mercedes driver long into the future.  Here are 4 lessons that luxury brands should keep in mind.

Knowing Who You’re Not Is Just As Important As Knowing Who You Are

Many brands try to be all things to all people. It is tempting to expand your brand reach to encompass more and more of the market. But this is a sure fire way to dilute the impact and influence of your brand. Know the boundaries of your audience and don’t forget why those boundaries are there.

If You Are Pulled To Expand Your Audience, Think About Creating a New Brand

Bifurcation of brands, as practiced by some of the greats like Toyota, P&G and Apple, employs a strategy of creating a higher and lower end brand rather than having a brand that scales price points and audiences. This approach enables companies to ensure they consistently use a clear and targeted voice.

Make Them Want It, But Limit Availability

Smaller product runs, limited editions, members only events…there is nothing like a limited supply to increase customer interest and demand.

Real Luxury Is In The Details

A luxurious experience cannot be one size fits all. It entails a deep understanding of the customer and a tailored experience that meets their needs. For a car company, this may be a free rental if your car is in the shop, while for a hotel this may be a free upgrade before a customer even knows they can request it. Creating a luxury brand means having a laser-like focus on every detail of the customer experience in every customer interaction. And having this kind of focus means limiting your product offering to what you do best. For Mercedes Benz, remaining a luxury brand means exiting the driving school space.

This blog post reflects our personal beliefs, but stay tuned for future posts where we test this hypothesis and report on the results.