Premium, Aspirational, and Luxury

Isabel Ladd, an interior designer in Lexington, Kentucky, started her business at $75 an hour. She told Business of Home that the rate brought her clients “on allowances.” They came to her with a Wayfair coupon or a West Elm ad from their Instagram feed. She said her projects were “ugly,” because she had no room to be creative.

She raised her rate to $125, and later to $225. “None of the people on allowances called me anymore,” she said.

The clients who said yes to $225 were, in general, households where both partners held senior jobs. Ladd thought they knew how to hand work to other people, because they most likely did it in their own jobs. So they handed the design decisions to her. As she put it, they would say, “Isabel, you take the wheel. What check do I write?”

She said that most of her clients came to her by word of mouth. She had also stopped taking small jobs, such as a quick powder room, and in her words was “only doing huge houses.”

Ladd’s higher rate changed who called her and what work she took on. A higher price is one way to move a business upmarket. How a client can book you is another, and it is what separates the three tiers a service business can sit in.

So find your tier by how a client can book you before you change your price. Here is what separates premium, aspirational, and luxury, and why a limit on booking ends most comparison. Then you will see where dressing up a premium service goes wrong.

Premium and aspirational get compared, and luxury mostly does not

In The Luxury Strategy, Jean-Noël Kapferer and Vincent Bastien separate luxury from premium. A premium product is judged against others, so its higher price has to be justified. Luxury, they argue, is not judged against anything. The buyer is not asking whether it beats the other choices.

The course adds a third tier for service businesses, between those two. From the outside, it looks like luxury.

Premium is better work for more money. The photographer has better lenses, and the chef buys better ingredients. Anyone with the budget can book it soon. So a client can set it beside the standard version and see what the extra money buys.

Aspirational is a premium service with the look of luxury added. That look includes the word “luxury” on the home page, branded extras, printed menus, and gifts. Anyone with the budget can still book it soon, so clients still compare it.

Luxury is a service with a limit on who can book it, or when, and the professional chooses the limit. Examples include a set number of clients a year, and new clients by introduction only. A third is a start date the professional offers, instead of a calendar the client picks from.

A limit on booking ends most comparison

Here is the course’s view of why the limit makes the difference. A client who can book you next month can also book three other professionals next month. So the client lines the four of you up and compares prices. The words on your home page do not stop that.

A client who has to wait for a place, or be introduced, is usually asking a different question. They are less often asking whether you beat three quotes. More often, they are asking whether they can get a place with you at all. They also want to know whether you are the right person for them. So they usually stop collecting other quotes.

Imagine a home organizer named Ruth Calloway who takes two new households a month. She offers each one a start date about six weeks out. Mrs. Abernathy calls to ask when Ruth could start and what the first week involves.

Ruth says that her next opening is May 6, and that the first week starts with the kitchen and the pantry. Mrs. Abernathy takes the date. She does not ask any other organizer for a price.

Luxury words are the easy change, and they leave the client comparing

When a premium professional wants to charge more, the word “luxury” is an easy first change. It costs nothing to add, and the booking process stays the same.

A client who reads “luxury” then finds an open calendar and a price list to compare. The word promises that the service is hard to book. The client checks that promise against the booking page, where anyone can take a date next month. So the client goes on comparing. The client might also suspect that the professional is claiming more than they offer.

Why dressing a premium service as luxury goes wrong

Imagine a private chef named Owen Marsh who wants to move upmarket. In one slow week in January, he adds a branded apron, printed menus on heavy card, and Champagne when the guests arrive. He puts “luxury private dining” across the top of his home page. He also raises his price per guest to cover the extras.

In March, Mrs. Kessler finds Owen’s page while she plans her husband’s 50th birthday dinner. She sees “luxury private dining,” then a calendar with every Saturday in April open, and a price per guest. Nothing on the page tells her how Owen differs from other chefs except that price. So she sets it beside two other chefs’ prices and books the cheaper one.

Owen now pays more for every dinner, and new clients compare him the same way as before. His extras changed how his dinners look. They did not change who can book him, or when.

The version that works starts with the booking. Owen takes “luxury” off his home page. In its place, he writes, “Dinners for eight to 12 guests, cooked in your own kitchen, four evenings a month.” His calendar shows only the four dates he offers. It is a limit he can keep, because four dinners still cover his costs in January, his slowest month. When Mrs. Kessler finds the page, the next open Saturday is in May. She asks Owen whether the birthday dinner could move to May, and she books it.

How to find your tier

Open your home page and your booking page on your phone, the way a stranger would find them.
Write down whether a client with the budget could book you within the next month. If you are booked months ahead because demand is high, but you have not set a limit, write yes. That wait ends when demand drops. For example, a tutor whose slots are full until June, with no cap she chose, writes yes.
Write down whether a stranger would see luxury words or extras on your pages. Look for words such as “luxury,” “bespoke,” or “exclusive,” and for photos of branded gifts.
Work out your tier from the two answers. Yes to step 2 and no to step 3 is premium. Yes to both is aspirational. No to step 2 is luxury, but only when the reason is a limit you chose, such as introductions only. Write your tier down.
If you are aspirational, take the luxury words down now, because they promise a limit you do not have. Put a plain fact about your work where each word was. Name where you work and the kind of client you work for. For example, a coach can replace “luxury executive coaching” with “I coach lawyers in their first year as partner, in Boston.”
Leave your price as it is for now. Your tier comes from how a client can book you, and a new price on its own does not change that.

Next: You will see why a service anyone can book says nothing about the client who booked it. Then you will see how to choose a limit you can keep.