If you want loyalty, get a dog! Lessons from a world leader in the luxury alcohol beverage space

You may not be able to pronounce “Veuve Clicquot” but when you’re perusing the aisle for bubbly, you can’t help but recognize its distinctive yellow label. Such is the case for all of the Moët Hennessy brands. Sometimes being a great brand isn’t enough, however. In spite of being one of the worldwide leaders in luxury alcohol beverages, Moët Hennessy struggled through the recent global recession. Not only did the company see slowing sales in flagship Hennessy cognac, it also suffered a long-term slide in the champagne marketplace — where Moët Hennessy is quite active with its Dom Perignon, Moët & Chandon, and Veuve Clicquot labels.

In a recent exclusive interview with VentureBeat, Moët Hennessy CMO, Jon Potter, appeared excited by the opportunity to build upon a luxury brand, regardless of the challenges. “We will always be dependent on the economy,” Potter said, before adding, “we want to beat the economy in good [times] and bad.”

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When asked about the particular difficulties of growing a luxury brand and maintaining its position as a world leader in the luxury spirit space, Potter conceded that it does have its unique challenges, “When you walk into a bar, generally people say, ‘what are you having?’ Your response tends to be, ‘Well, what are you having?’ And then depending on who you’re with, what the occasion is, you’ll make your choices, and with this repertoire you’ll have brands that you most likely go to.”

The focus on continuing to build, even upon well-known brands, has led to continued investments across the spectrum of Moët Hennessy’s numerous brands, including Belvedere Vodka, Chandon sparkling wine, and Grand Marnier.

Potter’s philosophy stresses new customer acquisition over solely building customer loyalty.

“Consumers shop from repertoires,” said Potter. “There’s quite a lot of academic research that says if you want to increase sales, and say, 30 percent of somebody’s consumption in the world of drinks is Belvedere or Hennessy, actually you have more chance increasing sales by getting more people like that than getting that person who is drinking 3 out of 10 drinks being Hennessy to increase to 6 out of 10 being Hennessy.”

Potter reiterated this idea: “Consumers trend to drink a repertoire of brands. To find a consumer that only drinks, say, a Belvedere is very limited. If you want to increase sales, you have more chance of getting more people like your customers, versus the same consumer using your product more.”

The philosophy at Moët Hennessy has three parts, Potter explained. First, create saliency. Second, be disruptive at the point of purchase. Third, create wonderful experiences which build brand advocates, which in turn gets more people to consider and purchase your brands

“There isn’t one thing which has driven an increase in performance, but it has been a more holistic look at the strategy,” shared Potter.

An additional pressure on Moët Hennessy (beyond the challenges of the recession) has been changes in consumer tastes when it comes to premium beverages. Potter said that at the beginning of the 2000’s, champagne accounted for almost 20 percent of the premium wine and spirits category, whereas today, it has dropped into the 9 or 10 percent range. For a company heavily focused on its bubbly product lines, this has brought additional challenges.

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Potter appears up to the challenge: “We need to give consumers reasons to pay more for a bottle of champagne. A lot of our storytelling we are now developing is bringing to life the DNA of these brands which makes people say, ‘Wow, I want to be a part of that world and I’m willing to pay a little more for that.’”

On technology, Potter said, “The basic consumer journey which has existed for the last X number of years has remained the same. What technology has changed is how consumers navigate that journey. There are so many new, shiny objects [for CMO’s]. What we are struggling with is how they work together. How do they drive my brand growth?”

Shiny objects non-withstanding, technology is important to Potter, although it isn’t a replacement for more traditional means of improving product sales, such as direct-product investments and expanding the products’ presence in the retail space. Just as many other brands have realized, Moët Hennessy recognizes that being engaged in the digital and social medium is important as customer attention and focus change.

“45 percent of our paid media is now through digital channels. In the last three years, digital investment has gone from low single digits to double digits, and next year approaching 20 percent of our spend level,” shared Potter. “We are experimenting more with different platforms and placing small bets in various areas to see how it drives our consumer engagement. Like everyone else, we are stepping up our social media listening.”

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Potter repeated the idea that beyond messaging, what remains critical to luxury brands is dedication to an experience which people are willing to pay more for.

“What makes Moët Hennessy different is the obsession and execution of quality. Anything we do, we expect to execute at the highest possible levels, which brings our brand to life, which will delight our consumers. We aren’t interested in short-term fads, but brilliant consumer experiences.”

Are you a marketing executive or CEO looking to learn from the industry’s best and brightest brands and most innovative disruptors? Join us for GrowthBeat August 17th & 18th in San Francisco and hear Jon Potter share more about Moët Hennessy’s compelling growth story and strategy for 2016 and beyond.