Tiffany is an iconic brand. Who has not seen the classic film, Breakfast at Tiffany’s?” The brand is now part of the LVMH group, who are master marketers themselves. Tiffany just finished a two-and-a-half-year renovation of their flagship Manhattan store. A visit to the store is a lesson in how to cultivate the HNW and UHNW market.
The Tiffany flagship store is about nine stories tall at the intersection of 5th Avenue and 57th Street in Manhattan. It would be difficult to find more expensive real estate. There are entrances on the two street sides. Imagine the ground floor like the perfume section of an upscale department store. There are several large islands of counter height glass cabinets with uniformed staff out front and behind them. Each section has a theme, which is repeated on the upper floors. The elevator bank is located on the rear wall, set between displays of the Tiffany Diamond (287 carats before cutting, 128 carats after) and another equally stunning piece, also a necklace. The is the center of the universe for the UHNW community.
There are several public floors. One focuses on love, i.e., engagement rings; another of different Tiffany designers; another on silver; another on decorative items for the home and a floor dedicated to high jewelry—pieces you would associate with royalty or celebrities at the Oscars. You get the idea.
Twelve Lessons Advisors Can Learn
The store is open to all. Tiffany caters to the carriage trade. How do they manage it?
1. They must work with a transactional business model. Many financial advisors work with an asset-based pricing model. Car dealers might sell you a car, but they make money when you bring your car in for service over several years. Tiffany purchases are made one at a time.
Advisor Lesson: Some clients prefer an alternative to asset-based pricing. Tiffany proves it is possible.
2. They welcome everyone. A jewelry store where some pieces sell north of a million dollars might seem intimidating. The staff is welcoming. They smile. They encourage you to look around. They let you wander from floor to floor. They will take pieces out and let you handle them.
Advisor Lesson: Their logic is you might not buy today, but when you are ready, you will remember they treated you as an equal.
3. They deliver an experience. When we walked around the first time, it was a hot day. Staff circulated with silver trays of sparking water, asking if you wanted a glass while you shopped. You can handle the merchandise. The staff is glad to take your picture.
Advisor Lesson: Consider referrals: Even if the prospect does not buy, they will tell their friends about their great experience. They will post to social media, giving Tiffany more publicity.
4. Make the decision as easy as possible. The staff is multi-lingual. The client advisor we met spoke English and French. They have plenty of Mandarin speakers.
Advisor Lesson: If there is a language barrier, they can put someone in place to speak their language.
5. The use of salons. On our second visit, our client advisor met us on the ground floor and took us to the fourth floor, then to a doorway in the center of the wall. This turned out to be a small living room with a sofa and chairs, a TV, glasses of water set out and a display of fresh cut roses. They brough coffee in china cups. The items under consideration come to you.
Advisor Lesson: Advisors do something similar, meet clients in a reserved conference room, so there are no interruptions. At a large insurance agency, I’ve heard these referred to as “closing rooms.”
6. Wedding presents start a relationship too. You might wonder why they sell household items. Why do they carry pet collars? Why do they sell a ceramic elephant “piggy bank” for $250? The visitor might not buy a diamond today, but they might send wineglasses as a wedding present or shop for a baby shower present.
Advisor Lesson: The advisor’s prospect might not transfer their entire account from a competitor, but they might set up a college savings plan for a new grandchild. The relationship can start in different ways.
7. Client segmentation is still possible. The person who cannot spring for gold jewelry at this moment might opt for silver jewelry today. There is a floor for that. The person who can’t buy that $52,000 gold necklace might walk out with an Elsa Paretti glass heart paperweight, priced at $65.
Advisor Lesson: Advisors have multiple channels at their firm. You can help clients at different asset levels leave that day as a new client of the firm.
8. Can you deliver the eighth-floor experience? Now segmentation was taken up a notch. We were invited by our client advisor to “visit the eighth floor.” We were led down an unmarked corridor to a hidden elevator bank and escorted by the elevator operator to a floor the regular elevators do not access. We found ourselves in a huge room with high ceilings, large glass windows, plenty of sofas, cocktail tables and chairs. There was outdoor seating on the terrace. Pedestals displayed gold jewelry you could handle! A bartender poured glasses of chilled champagne! FYI: There is an even more exclusive penthouse level!
Advisor Lesson: This is an extension of the private salon experience. It’s for HNW client cultivation. As an advisor, I worked in my firm’s HQ office. From time to time, I would bring clients to the firm’s executive dining room for lunch. You could achieve a similar effect if you have an elegant restaurant nearby.
9. The eighth floor from your firm’s perspective. If you take jewelry sales out of the equation, it’s a large, open space in a prestigious building. I heard they might be considering it as a possible gallery or exhibition space.
Advisor Lesson: Would your HNW and UHNW clients be drawn to attend an event in a space like that one? Might Tiffany consider a co-branded event where they get to meet your clients and you could organize a client/prospect event? If you aren’t in NYC, is there a similar store with that “wow” factor in your market?
10. Prospect research. How did we get chosen for that eighth-floor visit? I don’t know, but when I asked our client advisor who they “take to the next level,” she mentioned they “check you out” before inviting you.
Advisor Lesson: Advisors know there is a lot of information legitimately available on the internet. I think Tiffany has sophisticated methods. Advisors can use a version of the top-down approach. Once the prospect’s name is on the radar, how much can you learn about them? Where do they fit into the big picture?
11. Engaging with people. Our client advisor noticed I was interested in a certain gold necklace. Because of the size, it must have been hollow, otherwise the wearer could never stand up! She said: “Just for fun, try guessing the price.” I went for $9,000. My wife guessed $25,000. It was $52,000! We all agreed I should never be a contestant on The Price Is Right.
Advisor Lesson: When advisors gather financial planning information, it is important to get away from the standardized questions and engage with clients on a personal level. It won’t take much more time.
12. The Tiffany e-mails started coming. After our first visit, we started to get promotional e-mails. Not too often. Not overtly selling product, just positioning the brand.
Advisor Lesson: Advisors should learn which channels get the client’s attention. This is a good place to position the firm’s brand, history and capabilities.
Tiffany sells fine jewelry. You provide financial advisory services. Both organizations are looking for similar prospects. You can learn from their leading-edge strategies.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book Captivating the Wealthy Investor is available on Amazon.