The Secret Sales Funnel Template Luxury Brands Use To Sell The World’s Most Expensive Products

The Secret Sales Funnel Template Luxury Brands Use To Sell The World’s Most Expensive Products

Here is what the right sales funnel template can do for you…

Luis Vuitton… $9.9 Billion.
Cartier… $6.1 Billion.
Rolex… $4.7 Billion.

And yes, those are real numbers. In fact, that’s how much these luxury brands made in just 2017 alone. You can Google it yourself.

The question is… how did they do it?

After all, they are luxury brands.

They’re supposed to be selling products to the small sector of the population that’s doing really well financially. Yet, their numbers look like they sell to the masses.

And that’s supposed to be a big no-no, right?

Luckily, after trillions spent optimizing their business models over the last few hundred years, they discovered a simple sales funnel template that helped them exponentially grow their businesses year-after-year.

And now I’m here to reveal it to you.

This is the same exact sales funnel template luxury companies like Hugo Boss, Dior, and Armani use to generate billions in sales so you can bet it’ll help you grow your own premium or luxury brand.

So with that said, here we go.

The Luxury Funnel – Explained

Here are some more eye-popping numbers…

Chanel… $20 Billion.
Gucci… $12.9 Billion.
Dior… $5.2 Billion.

That’s the kind of money you can generate with the sales funnel template above, which I’m going to call “The Luxury Funnel”.

Every funnel must be able to do a few key things:

  • It must help acquire new customers.
  • It must lead to sales of your core products 
  • It must maximize how much you earn per customer

Here’s the problem though…

Premium priced products and traditional sales funnel templates don’t mix.

High prices mean high margins and high profits.

However, those same high prices can make it hard for a business to grow with traditional sales funnel templates since they can’t depend on cheap products and prices to acquire new customers.

Worst of all, if you’re always discounting to get new customers, it can hurt your image, status, and overall demand.

So what do you do?

First of all, luxury customers still like deals.

However, that’s not what they actually want from their products. What they really want is status, quality, and exclusivity.

If you lose that, then everything falls apart.

So how do you create a sales funnel template that balances your luxury brands need for growth while still keeping your positioning as a status symbol, which in turn helps keep your prices high?

You use different types of products for different parts of the funnel.

Here’s what I mean…

Stage #1: How Luxury Brands Acquire New Customers Without Discounting

At the very top of the funnel, the main goal is to acquire new customers.

Here is where you will usually see the most aggressive sales tactics being used because it’s so expensive and challenging, yet important to get new customers to switch to your brand and to introduce them to your world.

If you can’t optimize this part of the funnel with over-the-top aggressive deals though, what should you do instead?

Here is where luxury brands have made their biggest marketing innovation…

The key is to realize that all products have natural price ceilings.

For example, smaller products that are less unique and can be consumed quickly will be worth less than something that’s handmade.

Think things like perfumes, belts, and other accessories.

Case in point, Hugo boss colognes are around $80-$150.

That’s a pretty expensive cologne when compared to other non-luxury brands. However, compared to Hugo Boss’ main range of products, it’s pretty cheap. And regardless of how you see it, $80-$150 may be expensive for a cologne, but it’s not actually out of reach for most customers like a $1,000 handbag would be.

That’s why Harvard Business Review call these type of products “Accessible Superpremium”. Other names include “Affordable Luxury” and “Masstige”.

They’re perfectly designed to help acquire new customers.

They keep their luxury aura at prices their new customers are easily willing to spend on them without being forced to do huge discounts on their core product lines like most other brands do.

But that’s not all…

Luxury brands have also innovated when it comes to their placement.

Normally, luxury brands are EXTREMELY picky about where they sell their products. That’s why they primarily sell through their branded stores or websites.

When it comes to the top of the funnel though, they are more flexible.

It’s actually pretty common to find these customer acquisition offers in places you would never expect a luxury brand, like Jimmy Choo, to be at such as Macy’s or Ross. In fact, you can sometimes even find discounts on these same luxury products too.

Why do they flip their model for these products?

Because that’s where the masses are.

They can expand their reach and acquire the most customers possible by putting their products where the attention is. Furthermore, this also not only attracts new customers and boost brand awareness to the masses, but also acquires customers who are willing to “trade up”. These are middle-class or even working-class customers who save money in every part of their life so they can “splurge” in categories they really care about.

This combination allows for maximum customer acquisition.

Stage #2: How Luxury Brands Sell Their Core Products And Make Billions In Sales

Once you have a new customer who has now been introduced to your world through a premium, yet relatively affordable product… now it’s time to sell them what you really actually sell.

Aka your core product lines.

Every luxury brand has a core focus.

  • Armani is known for their suits.
  • Ralph Lauren is known for their polo shirts.
  • Hermes is known for their crocodile-skin bags.

In then expands from there with complimentary products.

That is what makes up the middle of the funnel. These are your core products. What you focus on. What you are known for. What your ideal customer base is mostly going to buy from you. And where you’re going to make the bulk of your money from.

The beauty of this sales funnel template for luxury brands though is that there’s no need to discount these products.

That’s because you’re selling them to customers, not “cold traffic”.

They already have proven to be interested in your brand. They may even already love your brand after that 1st product.

This means you can keep prices high and really act like a luxury brand designed to sell products to those who crave status, quality, and exclusivity.  

Stage #3: How Luxury Brands Double Their Profits From Their Wealthiest Buyers

So you have a new customers coming in like clockwork.

You also have the bulk of your revenue coming in through your core product line without discounting because of this new sales funnel template.

But what about monetizing your true fans? The ones that want the absolute best of the best you can possible offer and where money is not an object?

That’s where stage #3 comes in.

Here is where you sell your ultra-premium products.

Unlike your top of funnel and middle of funnel offers, which are usually mass-produced, here is where you sell the most expensive and exclusive products.

For example..

  • Handmade Products
  • Custom Creations
  • Limited Editions

…etc

A great example of this are the many handbag companies.

In the middle of funnel stage, you’ll find handbags that are as low as $500 and see prices go well into the 4 figure range.

At the bottom of the funnel though, here is where you’ll easily find handbags that sell in the 5 figure and 6 figure range.

In fact, you can even sell products worth MILLIONS here.

A great example of this is Patek Philippe’s $2.5 million watch.

This is the part of the sales funnel template that separates luxury brands from 99% of the brands in the world. Here is where a handful of people will drop the big bucks for something 99.99% of people in the world will never be able to have.

Here is where you wealthiest buyers that love your brand will thrive.

Naturally, you’re not going to make a lot of sales compared to your top of funnel and middle of funnel offers. But every sale you do make is going to be extremely valuable to you and maximizes customers lifetime value.

How Premium Ecommerce Brands Can Use The Luxury Funnel

Today, most brands use multiple channels to sell their products.

But let’s say you’re primarily an ecommerce brand and most of what you sell is on your website rather than your own chain of branded stores. How do you use this secret sales funnel template in that scenario?

Even in this scenario though, the luxury funnel still works.

All you have to do is use the online equivalent of the luxury funnel.

The Luxury Funnel For Luxury Brands

  • Sell your top of funnel products in department stores
  • Sell your middle of funnel products in your branded stores
  • Sell your bottom of the funnel products in the backend

The Luxury Funnel For Ecommerce Brands

  • Sell your top of funnel products on sites like Amazon
  • Sell your middle of the funnel products on your site
  • Sell your bottom of the funnel products in the backend

The Luxury Funnel For Ecommerce and Physical Hybrids

  • Sell your top of funnel products on Amazon and in-stores
  • Sell your middle of the funnel products on your site and branded stores
  • Sell your bottom of the funnel products in the backend

Keep in mind, that doesn’t mean you’re only selling those type of products in just those specific places. Everything your brand offers should also be found on your site whether it’s top of funnel, middle of funnel, or bottom of funnel.

The above is just to emphasize where they fit best in the funnel.

It’s also not a rule that you MUST sell on Amazon or in-stores. The Luxury Funnel works even if you decide to keep everything in just your ecommerce store. The same goes for any modification you make to the funnel.

The point is though, it doesn’t matter if you’re a 100% ecommerce company.

You can apply the luxury funnel to your business without physical locations.

How The Luxury Funnel Helped Build The World’s Most Valuable Technology Company

The Luxury Funnel isn’t just for fashion brands.

With a little creativity, it can be used in pretty much any premium category.

And one of the best examples of this Apple.

Here’s how it looks like for them…

  • The top of funnel is made up by things like iTunes and headphones
  • The middle of the funnel is where they sell iPhones, iPads, Macs and more
  • The bottom of the funnel is where they sell stuff like their iWatch collaboration with Hermes or even their new iMac Pro

See how that works?

You don’t even need to stick to just the typical stuff,

You can use digital products, information products, software, experiences, collaborations, super-premium versions, and more to fill out the rest of the sales funnel template if you’re in a market that’s not as flexible with categories like fashion.

As long as you have an affordable way for new customers to discover your brand, which then leads to your core products, and finally you’re most expensive and exclusive offerings in a rational way… you’re good to go.

Should You Use This Sales Funnel Template Even If You’re Not A Luxury Brand?

The quick answer is, “it depends”.

Let me explain…

You have to remember that the goal of a luxury brand is to acquire customers without screwing up their luxury status. That means they have modify the traditional funnel to fit their goals.

So if you’re not a high-end brand, you shouldn’t use The Luxury Funnel because it will hurt you more than help you.

That’s because you’re losing out on one of your biggest advantages, which is price and incredibly attractive specials. That’s something non-premium customers want. You don’t need to worry about things like status and exclusivity, so you can and should use every trick in the book to maximize number of new customers.

If you’re a premium brand though, I highly recommend The Luxury Funnel.

Price is a fickle thing.

You have to do everything possible keep the perceived value as high as possible. So while it’s OK to use discounting as a customer acquisition strategy, it shouldn’t be part of your core business model.

Excessive discounting can actually decrease demand in premium products.

Instead, it’s much more effective to follow the luxury model  so you can keep both price and demand high, which is where premium thrives.

Conclusion

You now literally have a sales funnel template worth billions of dollars.

It’s similar, but also very different from traditional sales funnels.

Why?

Because the premium market plays by its own rules. 

The Luxury Funnel is a result of this.

All that’s left now is to apply it to your business.