Creating a startup is often full of challenges. But one area that has its own unique set of challenges is positioning your business as a luxury brand.

Setting the bar high and trying to break into a niche market will present you with problems that are unique to luxury branding – but if you are successful the luxury market can be a very rewarding place to be.

You need to create an atmosphere of exclusivity

Ultimately one of the key tenants that separate’s a luxury brand is exclusivity. If you want your startup to succeed in the luxury market you’ll have to create an image that suggests your product or service is only for a select few.

This however can often create a paradox where in an attempt to sell more products, companies brand themselves as luxurious in order to drive more sales, but in turn reduce the perception of exclusivity.

Often referred to as the ‘rarity principle’, prestigious brands can often be eroded if too many people purchase the same product. This snob effect – where the exclusivity of a product is diminished due to popularity – is however more of a concern for particular types of business.

In an innovative study by Dr Christopher Berry, he categorised luxury into four distinct groups (1) sustenance, e.g. food and drink, (2) shelter, luxury homes (3) luxury clothing or apparel and (4) leisure.

Luxury clothing and fashion are particularly vulnerable to the snob effect as they’re more widely accessible, and for these types of brand, it’s important to carefully maintain a fragile equilibrium between high exposure and awareness, but with a controlled level of sales.

But remember to avoid being rude or unfriendly

Exclusivity is one thing, but being actively discriminatory or impolite is another. It can be surprisingly easy to overstep this balance. Abercrombie & Fitch are a good illustration of what can happen when exclusivity is taken to the extreme.

The aspirational brand associated with cliquey, all-american coolness, Abercrombie & Fitch pushed too far when in an interview the CEO stated that he only wanted attractive and thin people in his stores.

Perhaps even worse, the company made it clear their clothes weren’t intended for “poor people” and made sure they didn’t go to homeless people in second-hand, charitable donations.

The backlash was of course extensive negative press and young social media influencers avoided the brand in droves – the result of which is that sales are still lagging.

Instead, through careful use of highly curated imagery, welcoming but sophisticated language, and an understanding of your target customer, you can ensure your luxury status is instantly obvious without being unfriendly.

Proving your worth as a luxury brand rather than distinguishing yourself by denigrating others is very important. People with expendable cash may not always have had the money they have now, and very few people respond well to marketing tactics that are truly disdainful and exclusionary.

Make it clear why your product is superior and worth the extra cost

While big luxury brands can (on occasion) get away with placing themselves at an aspirational price point and convincing customers they are worth the money simply because of a brand name, as a startup this option is unlikely to be open to you.

Even established brands are finding customers increasingly resistant to this tactic, especially as in recent years customers have placed more value on authenticity, history and craftsmanship.

If a customer is paying over the average for an item or service, you will have to prove the provenance and quality that sets your brand apart.

Whether this means your sources are sustainable, the materials you use are rare or handcrafted, or your service is impeccable, make sure this is clearly communicated to your customer.

In the wake of fraudulent copies of their well known checked design, Burberry changed their strategy from one of exclusivity to more of a focus on heritage. CEO Christopher Bailey explained “people want the soul in things.

They want to understand the whys and the whats and the values that surround it.” This includes small touches, such as higher quality packaging, generous free samples and experiential shopping.

Sometimes, the usual marketing rules won’t apply

While the natural impulse of businesses is to grow, expand and put their product or service in front of as many people as possible, as a luxury start-up you may have to redefine your expectations.

It’s likely that your audience is naturally going to be smaller, and people will probably use your business less because it’s more of an indulgence.

Sheer volume of numbers, website traffic and mass appeal aren’t your only considerations, and some of the marketing 101s that apply to other brands may not be relevant.

Depending on the nature of your business it may be better for your brand not to display your prices, or even selling over the Internet may not work for you.

Instead having a website that showcases your brand and encourages potential customers to get in touch directly could add an exclusive and mysterious allure.

Fostering a slightly more distant image, one where you don’t use social media to converse and deal with customer service complaints as other companies do, could also be advantage – it all depends entirely on the kind of brand you want to create.

You may even have to restrict how much you respond to rising demand. Becoming too ubiquitous could ruin the illusion of luxury that you are trying to create, as could using celebrity influencers whose appeal is too broad (something most other brands would see as an advantage).

There are many ways in which traditional marketing may not suit your luxury brand, and what may appear like an obvious choice will have to be considered more cautiously.