Speaking to Luxury
On Monday afternoon, at approximately 3:30 PM, a luxury car and rented driver will be picking up K&L Champagne buyer Gary Westby at his home in Palo Alto. About thirty minutes later, that same car will drive north on Highway 101, exit at San Mateo, and cross El Camino Real, eventually stopping in front of my apartment. I will enter the automobile, acknowledge my colleague, close the door, and head east over the bay to Walnut Creek (hopefully sipping on Krug and Hennessey the entire way!) where we will terminate at the local Ruth's Chris Steakhouse. Gary and I will exit the car, enter the steakhouse, and make our way to the podium, where we will address a crowd of LVMH employees on the subject of luxury sales.
Luxury. How do you sell it? Louis Vuitton Moet Hennessey - a super company selling luxury handbags, luggage, couture clothing, high-end Champagne, Cognac, and single malt whisky. They've got luxury. They've got expensive. Do they have quality?
I think they've got it. They've got history as well. Louis Vuitton made the first flat-bottom trunk in 1858, lining it with canvas and making it easily stackable for long voyages. Hennessey is one of the most respected houses in the history of Cognac. The same goes for Moet & Chandon with Champagne. Under their umbrella are other producers as well, like whisky distilleries Glenmorangie and Ardbeg. I don't have to say much about their reputations. Bill Lumsden and Rachel Barrie have done enough. The prices demanded from LVMH products are not utilitarian, however. These are status symbol items that garner respect, so their cost reflects both quality and desirability. It's not my place to tell people how to spend their money, so I don't care to comment on what I would or wouldn't spend my money on. My job is to evaluate quality and guide those who want an evaluation on it. Luxury is defined as: conducive to sumptuous living, usually a delicacy, elegance, or refinement of living rather than a necessity. In my professional opinion, that definition definitely applies to the LVMH portfolio.
Because we sell a good amount of Ardbeg and Glenmorangie, I've been invited to speak at this event. I'm actually quite honored to participate. K&L also happens to move quite a bit of Krug and Moet Champagne, so I'll have Gary Westby along side me. They want to know our strategy for luxury sales. My speech will be short and simple. I've got one point and everything else will stem from this easy bit of advice: believe in what you're selling. If you're in the business of selling something, you'd better believe in your product – especially when that product costs hundreds to thousands of dollars.
I lose sleep over my fifty dollar recommendations, let alone my hundred dollar suggestions. When we released our Glenlochy cask, I was a wreck. Four-hundred dollars for a bottle of whisky? I loved every drop of that malt, but I still couldn't speak for the future opinions of others. I think it's worth that price, but will other people feel the same? How do you know what their expectations will be? What if the whisky falls short?
As part of the outline, LVMH has asked me to address my business history and philosophy. I'm a former elementary school teacher with no business experience. I relate far more to the customer than the business owner. They've asked me to talk about the role of price in the luxury segment. Price had better have a rationale. Something can be expensive, as long as there's a reason for it. What type of expertise is needed to sell these expensive items? That's easy: you need to understand why it's expensive. I'm fine with something being expensive as long as there's an explanation. However, if a group of rich guys gets together in a boardroom and decides their whisky should be expensive, simply because they want to cater to other rich guys, that's bullshit. Luxury isn't decided. It simply is.
Eating a roasted dodo bird is a luxury. Drinking Armagnac from the 1800's is a luxury. It's also an experience and ultimately, that's what people are paying for – the chance to say, "I did something special." If there's nothing special about the experience, then there's nothing luxurious about it. If you don't believe you're selling people a special and unique experience, then you're doomed. You're a snakeoil salesman without a rationale. You're about the money, not about the opportunity.
Making money and helping people don't have to be mutually exclusive. Doctors make money. Social workers make money. I do my very best to help people find great bottles of booze and that effort nets me a paycheck. My speech to LVMH will therefore be as follows: if you don't believe in the quality of LVMH products, and that they help make people feel special, then you shouldn't work on its behalf. It's always pretty clear when someone believes in what they're doing, or not.
I think Ardbeg makes some pretty great single malt whisky. As does Glenmorangie. That's why I have no problem selling them. I think they're good whiskies and I tell people exactly that. It's not all that complicated. As for their super high-end products, if someone wants a bottle of Glenmorangie Pride it's as tasty a $3500 whisky as I've ever had. That's all I can tell you. The story of that whisky, however, needs to be told by LVMH.