A Customer-Centric Way of Segmentation

Luxury brands often segment customers according to the interests of the business's agenda. Some segmentation examples include spending tiers, years of loyalty, or purchased product categories, among others.

Here is a novel method of customer segmentation that focuses on the interests of the end consumers: segmentation based on the customer's primary purchase motivation.

According to Dr. Taibi Kahler, the founder of the Process Communication model and a renowned psychologist, we all have primary psychological needs and motivations, akin to basic hunger that requires satisfaction. By applying human psychology to the luxury industry's purchase motivations, five main types of desires must be met to foster luxury customer loyalty:

🥇 Status: Clients who value fame, status, and experiences or products that money can't buy. They purchase luxury goods to showcase their success and to be recognized as part of an exclusive group.

💪 Efficiency: Clients who value time-saving and the ability of Client Advisors to properly and efficiently follow up. Personalized service feeds their desire for autonomy and control over their pace of living.

❤️ Affection: Clients who desire emotional connections, intimacy, and empathy. They also value comfort, relaxation, and a sense of emotional fulfillment during the shopping experience.

📓 Intellectual: Clients who select luxury products or services to expand their knowledge and access exclusive information. They value quality, craftsmanship, and exceptional performance from luxury products.

🌏 Purpose: Clients who make luxury purchases aligned with their values and beliefs. They choose luxury brands with a significant social or environmental mission, which fosters a sense of meaning.

What are your perspectives on different ways to segment luxury customers?