By Joe McCarthy
September 25, 2013
NEW YORK – The CEO of The Luxury Institute at the Luxury Interactive 2013 conference said that luxury brands should focus on building a culture of relationship building and sales will follow.
The executive said that many conventional paradigms of behavior should be flipped to create an environment steeped in meaningful purpose. In his “7 Paradoxes of Luxury Marketing” talk he verified the profitability of such strategy suggestions with hard evidence.
“If you want to create a great customer culture, you have to think in terms of paradox,” said Milton Pedraza, CEO of The Luxury Institute, New York.
“Some people say culture trumps strategy, but I don’t believe that’s true,” he said. “Strategy emerges from culture.”
Mr. Pedraza discussed several remedies for poor strategies that have become entrenched in business culture.
The first paradox dealt with shifting a brand’s focus from commodities to meaningful purpose. This objective reaches beyond revising product development to facilitating a better society.
Mr. Pedraza at the Luxury Interactive 2013 conference
Next, companies should switch the tone of their command style from hierarchical and militant to empowering and creative.
Mr. Pedraza said that employees are more responsive and more likely to create innovative ideas when given liberty to act without constraints. An example of this would be giving in-store employees technology to pursue friendly relationships with customers post-purchase.
Third, Mr. Pedraza said that decision-making should incorporate employees from all levels of operation as well as consumers. When decisions are cloistered among high-level executives, simple or uncanny solutions can be overlooked.
Educating employees should not resemble a classroom. Rather, Mr. Pedraza insisted that employees will quickly adopt brand values when trained in a gradual, interactive and personal manner.
A skill-based hiring process should be tempered with value-based merits. A candidate selected after an assessment of values will likely assimilate into brand culture with more ease.
Mr. Pedraza urged brands to incentivize the right behavior. Employees will likely be more proactive if they know their behavior is recognized.
Finally, a meaningful brand culture should be reinforced daily to ensure its fortitude. Lexus and The Ritz-Carlton were two luxury brands that Mr. Pedraza acknowledged as pioneers of meaningful brand culture.
For instance, Toyota Corp.’s Lexus is promoting the 2014 IS vehicle with a collaboratively created, stop-motion Instagram film that draws on the perspectives of 212 fans to show the vehicle in a range of angles and tones.
Under the orchestration of a directorial team during Instagram’s #WorldwideInstameet, car enthusiasts and Instagram users from a variety of background blended their personalities in a film that colorfully animates the IS. By leveraging Instagram in this unifying fashion, Lexus will likely grab the attention of a younger demographic and potentially trigger more collaborative, stop-motion films (see story).
Ultimately, if employees are infused with a sense of purpose, they will likely be more effective sales agents.
“Employees that believe companies have strong sense of purpose versus companies without purpose perform much better,” Mr. Pedraza said.