Are Facebook Ads Worth It?

I’ve been shopping and have discovered two very interesting things:

I spent Christmas in Paris, which was great fun, although I think I annoyed the management at the most expensive hotel in the city by sitting in their foyer having my Pret a Manger sandwich for lunch.

They seemed rather perturbed. It is French, isn’t it?

Anyway, at the end of the street was a big Louis Vuitton store. Every day I went past I saw this queue.

I assumed the queue was because it was Christmas but my driver informed me that was not the case. There is a queue most days of the year. People queueing for an exclusive brand. How cool is that?

There should be a Nobel prize for anyone who can get people to do that sort of thing.

I declined to join the queue so my Louis Vuitton review ends there — except to say I just checked their website and the first thing I saw was a handbag with some nice dots on that sells for £3000/$4000. Louis Vuitton ain’t cheap.

Whenever you see a queue of people desperate to spend thousands you should stop everything you’re doing and keep staring at the queue until you can figure out what you’re doing wrong in your business and why your customers aren’t queuing to buy something from you that’s 10 times the price of what your competitors sell.

I do this frequently when I see the queues at Apple stores. It’s fascinating. You can get a perfectly good phone down the street for £200/$200. But those stores are empty. Meanwhile people queue in the rain and snow to spend a grand on a phone.

I recommend that you become a student of how these brands do it. Of course, some of it is pure branding backed by millions in ad spend, which isn’t an option for us. But there’s much more to it than that.

These customers queue partly because they want to be part of something bigger than the product. They want to FEEL different and these brands let them feel superior, classy, successful, hip, sexy etc. You need to be thinking about how your customers feel as a result of buying from you. You can influence this way more than you think and it gives you huge pricing power. You might be a window cleaner but if your approach to work and life leaves the customer better than when you found them, you can be the highest priced window cleaner in town.

The other thing not be overlooked is that one of the reasons we buy these products is BECAUSE they are expensive. No one will admit to this because it seems daft but you’d better believe it’s true. Sure, most people are broke but there are also enough people out there who want ‘the best’ and can keep you rich for life. Of course, just slapping a massive price tag on something isn’t enough. It has to be part of a positioning mix but it’s a vital part. Sometimes it really is easier to sell something if it’s more expensive.

Here's the other thing I discovered on my shopping excursions:

Crème de la Mer used to be a small pot of cream that cost up to $1000 and apparently makes you look younger.

I was dispatched to Selfridges before Christmas to buy some for my mum as a gift.

I discovered that Crème de la Mer isn’t called that anymore. It’s now called ‘La Mer.’

Why?

Because someone at the company woke up one day and realised that if they can get dopes like me to spend a thousand on a pot of cream, they could probably get me to spend more on other stuff that also costs virtually nothing to make.

Here’s what their business used to look like:

Here’s what it looks like now and just some of their current range:

I’ve no idea what it all does but I do know I’m in the wrong business. They are almost certainly making an absolute fortune – and much more than when they were just selling ‘Crème.’ But here’s the interesting question that relates to your business: How much did they lose by not offering their customers more in the years when they only had one product? The company was smart enough to realise that their biggest asset wasn’t their apparently magical cream. It was their customers and the relationship and trust they had with those customers. There’s only so much face cream you can sell to the customer willing to spend whatever it takes to look good. But there’s virtually no limit to what you can sell to that customer if you go beyond your current product range. Your accountants are wrong. Your biggest assets aren’t what they put into your accounts. Your biggest asset is your customer list. It is a goldmine waiting to be tapped.