At a huge trade show one year I passed by a booth displaying a solid gold faucet. The person working the booth signaled me over and said, “How much you think this solid gold faucet goes for?” I told him I had no idea.

He said, “$10,000.” I smiled. “You sell a lot of those?” I asked in a snarky manner.

He said calmly with a smile, “I don’t have to. I only need to sell a few. But I can tell you, they are hot in Miami. Five last week.”

The nature of luxury is simple: for most of us, it’s a show we don’t play in if we’re doing B2B. Our world is comprised of selling many things at a time, mass marketing, not niche marketing.

But the question we should ask is are the strategies for each that different?

In luxury marketing it’s Haute Couture — Haute meaning high or elegant, and Couture meaning sewing or fashion. B2B is never thought of as Haute, but it is, and this article will prove it.

One of the takeaways from the study of fashion as Haute Couture are the lessons of the $10,000 faucet, certainly qualifying as “haute:” not many people buy these things. But then, not many people have to. The question becomes do you sell to the many or to the few? And if you do either, does your strategy change? Or, in fact, are the strategic principles of the Haute applicable in our world of B2B?

We think it is the same, and we call the B2B version “Haute Strategy.”

What’s Haute Strategy?

A Haute Strategy in the world of B2B doesn’t mean high end – it means an elegant strategy. Because a strategy, if it’s not elegant, isn’t worth your time or money whether you’re doing luxury or B2B.

As Jim Mattis said in Call Sign Chaos, “In strategy, you have to think until your head hurts.” And when you figure it out after you’ve taken your aspirin, elegance shows itself in the form of a winning strategy.

A recent article in my favorite BoF (Business of Fashion) spelled this out clearly.

Written by Marc Bain and John Kennedy, the piece — Luxury E-Commerce: Who’s Surviving and Why – covered what we at Interline call Haute Strategy without specifically naming it in the piece. Just check out their subhead[1]:

Mytheresa. Ssense and Moda Operandi keep afloat by honing particular consumer, curating their assortments and executing retail basis. But the bigger they get, the harder it will be to sustain these strategies.

Whether you are B2B or luxury marketers, finding a sustaining strategy is always the goal. And only a Haute strategy is a sustaining one.

For example, I never heard of these websites in the subhead until I read the piece, and no doubt most in B2B haven’t heard of them either. But you should visit them, because these companies face the same problems faced by B2B marketers: selling stuff.

You might be saying now, “What do these fashion websites have to do with my valve company, or my HVAC company?”

Simply, everything. Their struggle to stay relevant is YOUR struggle – OUR struggle – to stay relevant. In the complex world of luxury or B2B sales, relevance is the object of the game. The question is, what strategy do you use to get and stay relevant?

Three things seem to govern luxury e-commerce fashion according to the piece:1) unit economics and profit over growth to survive as market conditions worsen; 2) resiliency in e-commerce by focusing on serving a defined audience; and, 3) strategies that have limited growth amidst the question of how many players the market can sustain.

Anyone in B2B will recognize these as making total sense, because they are identical to whether you’re selling to many or a few. But are they haute?

Luxury e-commerce is volatile. Farfetch, a leading online retailer, nearly went under until Korean retailer Coupang bought it. And while it is still in operation, it faces increasing competition from others, who will eventually face competition from still others yet to be named or uncovered.

B2B e-commerce is volatile. Just take a look at what Ferguson is doing online for example or in their latest acquisition, and the disruption to the distribution channel. Or when manufacturers open up stores in major cities, and online purchasing.

The article is suggesting that e-commerce players “future proof” themselves by focusing on their top-end clients. But in B2B, who isn’t a top-end client? Is a client (customer) who purchases only $10,000 a year less important than the million dollar customer? How many $10K customers are in your file compared to the $1-million ones?

How much money on your smaller customers can you lose before your investors start questioning your strategies?

So the problem is defining your target audience – which has always been the problem, hasn’t it?

These companies in the piece tout competing on newness, exclusivity and superior service, not on price or discount. That’s a sound strategy for ANY company in the B2B sector. But is it sustainable?

When you review the B0F piece, “there is no clear path” except for what “experts” say they are doing right: speaking to a specific customer, curating assortments for them, and executing basics of retail, which is customer service and managing costs and margins.

Isn’t that what every B2B company should be doing?

Direct response practitioners will recognize that guidance as our own Haute Strategy for the last half century. I mean, “speaking to a specific customer” is the essence of direct response, isn’t it? “Giving them what they want” is the essence of direct response.

The article points out further that, “e-tailers use content and events to pull shoppers to the site and keep them there,” adding, “which is increasingly expensive as advertising costs rise.”

For the B2B marketer, you don’t have to publish an “ode to life in a Vaquera skirt with pink panties sewn on the outside” to gain attention. You need to produce content with solid subjects of interest to your B2B audience – an “ode” to what people want from their cities, or discussions on the inner workings of multi-use lifestyle neighborhoods that support a connected ecosystem. These Gensler-like topics hit home to your customers, and while a Gensler is not an e-tailer, what is an e-tailer anyway?

You are an e-tailer and you don’t know it

Architects like Gensler don’t buy anything, but they specify everything. So “e-tailing” is in the e – which in their case, is content.

We are ALL content e-tailers.

Every company in the world competes with content. Often, we think we only sell this or that, but because of the internet, we are all content providers!

No one, Gensler included, probably thinks of their website as an e-content site. But it is. And so is every manufacturer who is selling in the B2B environment!

Content, in fact, is the “fashion” of the B2B marketer. So like the companies in the BoF article, you can engage your customers with special events to “make them feel like they are part of an exclusive club.” It’s called loyalty programs, and there’s plenty of information about them we can tell you about.[2]

You can host a panel discussion on “carbon storytelling” and why it’s essential for buildings in the future. In How to Treat a VIC (Very Important Customer), I talked about how VICs are often labeled as “key accounts” in the world of B2B, and garnish their own account executive to handle the business. Sometimes in B2C, a company like Amazon will emerge and treat everyone like a VIC, but even Amazon develops layers in that VIC model (Prime members are treated differently). That piece explores how fashion treats their VICs and compare that to how we treat ours.

Retail basics are “curation and customer service.” Isn’t that the essence of every B2B manufacturer? Prioritizing unit economics and profit over growth at any cost prove more resilient?

One company we have worked for sought 100% market share at any cost. They are still seeking it[3]. There is actually a steep price to pay for “growth at any cost” and it often shows up disguised as status quo; the company we’re thinking of hasn’t grown in the last 20 years, and is becoming vulnerable to take over. Its main competitor, however, followed a haute strategy, and through acquisitions and diversifying their product line itself, increased the market share it holds on a steady basis. In fact, other competitors emerged to challenge our client’s core competency product, dissolving any chance of even a 40% market share over the years.

Why you need a Haute Strategy

Consider some of the recent headlines from advertisements coming out of a national design magazine and ask yourself what are these companies really selling?

• “Surround yourself with meaning” (showing a loaf of bread on a cutting board in a kitchen)
• “Innovation is the ultimate ingredient” (showing a woman at a stove in an uncomfortable position cooking or doing something on that stove)
• “Redefining the art of the sink” (showing vegetables on a piece of the sink)
• “Evolved/Essential” (showing a dark background with a faucet in the background)

I could go on, but the uninspiring sample should get all of us thinking about just how elegant our strategy is. How do we treat customers? Do we listen to everyone? Who DO we listen to. Am I thinking until my head hurts?

There is a saying in business that a rising tide lifts all boats. But when that tide falls away, only the companies with a Haute Strategy will be left behind. The rest will be swept into the ocean of failed companies. Here some examples to try and review.

Examples of Haute Strategy

Haute in Customer Service

Many plumbing fixture manufacturers implement a dedicated key account management system. But do they follow through? How much “power” does the key account management have? And how many “key accounts” can that manager have?

A service company did this: they put a person INSIDE their automotive customer manufacturer’s key facilities to manage the product they served — hazardous waste. Flip that, and how many manufacturers are willing to put a key account person INSIDE the key account? The benefits are unbelievable: it builds stronger-than-ever relationships, improves communication, and ensures that distributors feel valued and supported, leading to higher satisfaction and loyalty. Even if a manufacturer doesn’t believe they have the resources for such a radical approach, FIND THEM! Or, empower you key account manager with the ability to make decisions on the fly.

Haute in Technical Assistance

Some manufacturers (i.e., HVAC manufacturers) offer 24/7 technical support via a helpline staffed by experienced engineers. They also provide a comprehensive online knowledge base and troubleshooting guides. But how many manufacturers are stretched with today’s staffing issues?

An association did this: they actually had their center write specifications for the steel structures that structural engineers were tasked with developing. Granted, as an association who also produced the technical manual for tall buildings they had a distinct, unduplicated advantage in doing that. However, ANY company who is writing specifications HAS to follow the rules! Those rules are SHARED by everyone…and as one engineer in plumbing told us – “everything depends on the inspector, so if you have a good relationship with the inspector, you get the job done the right way because there is only the ”right” way.” The benefits of such service is immediate and expert technical support helping distributors solve issues of specification compliance quickly, reducing downtime, and enhancing the overall customer experience. The biggest benefit is the manufacturer is AT the point of sale…something he rarely does.

Haute in Supply Chain Management

More and more distributors use Vendor Managed Inventory (VMI) to manage inventory levels at a manufacturer location. Larger distributors do this matter-of-factly. That way, the distributor monitors stock levels and automatically replenishes inventory as needed. But a Haute strategy would flip this and make it the manufacturer’s game as well, where, the manufacturer does it at the distributor level. With digital technology today, the size of a distributor is no longer an issue either. And the benefits to the manufacturer are as many or more than a distributor has with their customers, including reducing the burden on distributors to manage stock, ensuring a steady supply of the manufacturer’s products to prevent switching because of availability and optimizing inventory turnovers for increased profit.

Haute Loyalty Programs and Incentives

Some manufacturers implement loyalty programs, where distributors earn points or cash based on their purchase-engagement levels. But a Haute strategy would “tier” the program – that is, build in levels based on customers who buy more, or buy certain products, and change the target.

That’s just what a major plumbing company did, uniting with other companies who produced non-competing products. This program — called Value Alliance — included five manufacturers with exclusive benefits to contractors who purchased from distributors! In other words, they changed the target! It was this Haute strategy that made it one of the most successful loyalty programs ever launched (the distributor also benefited with a percentage of rewards).

Loyalty programs like this incentivize customers to increase their purchases and engagement, driving higher sales from profitable customers while providing clear incentives for lower-tier customers to move up.

Haute Regular Performance Reviews and Feedback

Many buying groups hold meetings with the vendors to review and forecast sales in order to determine rebates. A Haute strategy would flip the meeting objectives with the manufacturer walking in with comprehensive quarterly performance reviews of WHERE the buying group members products were being sold. This type of “insider” data served as platform for honest, frank discussion on marketing strategies between the manufacturer and its distributors. Along with discussing sales performance, market trends, and areas for improvement, the Haute strategy became a year-over-year benchmark for all their vendors.

The benefits were clear: 1)Regular reviews ensure open communication to identify potential issues early, and 2)foster a culture of continuous improvement. Such a proactive approach strengthened relationships and helped everyone achieve their business objectives.

We’re here to help! Let us know how, let us hear from you, and thanks for reading.

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[1] You should have a subscription to see this content, but I’m quoting where appropriate for your reference. I encourage you to subscribe to see numerous strategies that make your head hurt!

[2] Google “what’s the human side of a spiff” to read our article on this topic.

[3] Trying to gain 100% of anything is a fool’s errand. In our study of advertising, Honeywell once ran a pop-up insert ad in the now defunct Business Week magazine. The ad had a city pop up when you opened it with the headline, “Honeywell has you covered.” The ad had a 99% seeing score by Starch measurement, meaning 99% of the audience remembered seeing it. But one percent didn’t see it. How do you miss a pop up ad? Well, you didn’t open the magazine!