In this difficult economic environment it is becoming more important that we fully understand the needs of our customer. In fact it is critical that we begin to see things from our customer’s viewpoint now, more than ever.

Unfortunately today many marketers are looking closer at their income statement than at their customers. Many are concluding that because they offer a more “optional,” high-ticket product, they are in fact offering what will be perceived by the consumer as a luxury purchase. This perception is the result of fear. This kind of fear is very dangerous to any industry. It has caused many marketers to cut back on their advertising, reduce their marketing expenditure, and even begin to slash the price of their products and services in the marketplace. These kinds of actions only result in lessening the value of our products and services in the eye of the customer. It makes the statement to the consumer that WE OURSELVES do not place a high value of the services we offer.

Webster's defines luxury as “something that is not necessary.” Think of the telephone. A decade or two ago it was not uncommon to meet someone who did not have a telephone. Now it is unimaginable. Cell phones, pagers and Internet connections are becoming the same way. What were once luxury items are now necessities of life.

Itamar Simonson of Stanford University's Graduate School of Business and Ran Kivetz of Columbia University surveyed 3,100 consumers about their attitudes on luxury purchases. The researchers asked participants to rate themselves in terms of how guilty they felt about purchasing luxury items in general. They found that more than 62% of the respondents felt guilt over purchasing luxury items. "Most people need to justify luxuries," Simonson said. Their findings suggest that people believe luxury purchases should be "earned." Is this the category that you want your products and services to occupy? Are we deciding for our customers, “what is necessary?”

It's very important that we do not position our products or services as luxury purchases. They need to be marketed as very necessary solutions to very real problems. People purchase your product or service because they seek solutions to their problems. The more that we can demonstrate our connection to the customers needs, the more valuable we will be to the customer.