The adage that the customer is always right proved to be a gold mine, or rather a diamond mine, for Alexander Pham. One day, a client stopped by his Images Luxury Nail Lounge, in Newport Beach, California, which he'd opened in 2014, requesting a manicure with diamond embellishments. Pham quickly found a jeweler to supply the stones and, more significant, figured other women might like gems as an add-on to polish. Today, Pham, who has since opened three nail spas in Irvine, features bejeweled options (like the customized design pictured above) in package deals that include pedicures, facials, and other treatments. The price of the "Haute Couture," which uses up to 20 2-3-mm diamonds, starts at $2,500. "Gold Rush," featuring 24-karat-gold designs, will set you back $10,000 or so. Images' highest-priced package tops $25,000, and uses GIA-certified diamonds. Yes, you can say Pham nailed it. Here, Paco Underhill, CEO of retail research and consulting firm Envirosell and author of Why We Buy: The Science of Shopping, explains how to turn extraordinarily high ticket shock into ticket seduction. --As told to Coeli Carr
The way you get someone to fall in love with a product is to get the person close to it. Let's say you have an exclusive and high-priced handbag or jewelry shop. You can have a party or in-store gala there, shutting the place down--added security adds to the gravitas of the event--and serving champagne, while letting invitees try on and take selfies with every product in the place. A remarkable number of those guests will come back to ask about favorite items. Yes, people can shop for stuff online, but it's only in the context of an event that potential customers can look, feel, taste, smell, and involve all the senses in the process.
Not every consumer focuses on buying goods and services that last. It's like buying a prom dress that you know you're going to wear only once. You need to factor in psychology and consumers' focus on an event in which they've invested an enormous amount of fantasy. Think about your clothes closet, which contains both uniforms and costumes. Going into the costume side is an expensive spa treatment, which is part of making a particular day or event special.
Give consumers a context for whatever you're selling, and construct a certain value proposition based on association. If you do women's fashion, is there some prop in the background of your image or photograph that shows how your item will fit into their life, adding functionality or elegance to it? There's an art and science to presenting a product, and people will buy just about anything that's packaged correctly.
In North America, the overwhelming majority of wealth is in the hands of people 55 and over. But in Shanghai or Moscow or Dubai, it's in the hands of those under 40, who are still in the formative stages of their lives and whose identities haven't yet been hardened. Those places are where U.S. entrepreneurs can see very creative ideas and bring them back to help create and fulfill a transformational fantasy in the eye of the potential buyer.