A New Set of Metrics for Luxury Brands

Paul Das

21 September 2005

A new set of metrics to measure the “customer experience” has been developed by the New York-based Luxury Institute. The metrics, which use competitive category benchmarks, are currently in beta testing with major brands in several luxury categories. The Luxury Customer Experience Index, creates a set of measures and indices that capture the critical drivers for customer experience and goes beyond traditional and unilateral customer satisfaction studies, according to the company. The Luxury Institute also claims that the index delivers a critical set of metrics for customer problem resolution, customer loyalty/retention and customer referral for each participating brand. The index’s methodology is to survey a representative sample of wealthy customers who have actually used the luxury product or service brand over the past 18 months. It is designed to cover individual brand, brand category and cross-category metrics. Initial categories include luxury fashion designers, luxury retailers, luxury hotels & resorts, luxury automobiles and wealth management services. Several leading luxury goods and services firms have contributed to the development of the metrics. "Today, most luxury purveyors deliver high-quality, competitive goods and services. Those are 'cost of entry' items for the luxury market. "The next battleground for luxury is the customer experience, where luxury goods and services providers need an independent and objective set of standards that can help them measure, benchmark, and improve customer experiences on an on-going basis," said Milton Pedraza, chief executive of the Luxury Institute, in a statement.