I own and operate a luxury fashion business. I don't offer discounts to create loyalty, but I feel I need to offer something that my customers will consider equally valuable, especially in these difficult times. Do you have any suggestions?

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Luxury products and service companies actually have some going-in advantages. Ritz-Carlton and Four Seasons, for instance, don't have loyalty programs and don't feel they need one (Ritz-Carlton guests can, though, tap into the Marriott Rewards program). They rely on providing top-end, differentiated guest experiences. Porsche and Jaguar don't have loyalty programs. Instead, they emphasize the lifestyle and experience associated with owning their vehicles. Neiman-Marcus has the "In-Circle" loyalty program, which is built on superior service, information, special offers and exclusivity, such as customer-only events. Tiffany & Company and Gucci don't have customer loyalty programs (although Gucci is part of American Express' Platinum Rewards cardholder program). So, perhaps the best recommendation is to identify, through targeted qualitative or quantitative research, what your customers would find both differentiating and valuable, and offer it.

Editor's note: Learn about some major companies who are succeeding with customer advocacy programs.

This was first published in March 2009

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