People are Luxury Goods

Ah, to be in the shoes of Bernard Arnault! Who is that? And does he have nice shoes? Arnault is the CEO of the French luxury goods company LVMH, which includes the likes of Louis Vuitton, Moet, and Hennessy, as well as Fendi, Christian Dior, Marc Jacobs and many others. (They have 75 brands, to be exact.) They've been all the rage recently.

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When your company reports a staggering $23 billion in revenue in just one quarter, it's bound to grab attention, and that's precisely what happened with LVMH. As a result, the press and blogosphere went into a frenzy, and I couldn't help but notice two standout articles amidst the chatter.

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What captured my attention in these articles was the concept of value creation and how each approached it from a different angle. One delved into the relationship between price and value for luxury goods, using LVMH as an example. The other discussed the importance of scarcity and artisanship in creating value, particularly in a world filled with empty-calorie brands.

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The first article ?made a great point about the intangible qualities that customers pay for, such as expertise, peace of mind, professionalism, and ease of doing business. These factors can set a company apart from its competitors and create a sense of value beyond just the sum of its parts. ( Chenmark Capital folks started me thinking about the metaphysics of business. )

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The second article ?focused on creating a perception of exclusivity and uniqueness through scarcity and artisanship. This artificial scarcity can generate customer loyalty and even command premium prices. (Prof. Galloway is a very interesting read. )

Together, these articles highlight the complexity of value creation and the importance of providing intangible qualities while creating a sense of exclusivity. Everyone wants to feel special and to feel like they belong. It's a multifaceted approach that can yield substantial financial results.

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So, what does all of this mean for Independent Financial or any company for that matter? While you may not be handing out?Birkin bags or $400 dollar bottles of champagne,??we all have some rare and intangible opportunities to create value. We have to capitalize on these chances and continue to provide clients with expertise, professionalism, and peace of mind while finding ways to deliver uncommon and unique service in what we offer. After all, IF’s house of brands is even better than French luxury goods. It includes the people who make us who we are!