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[amritaself]

The Louis Vuitton Diaries

I am here to confess: I am an absolute sucker for luxury bags! My journey began with a totally impulsive purchase of my first Louis Vuitton. It was love at first sight and since then, my obsession for luxury bags has only grown deeper. Maintaining an air of sophistication and elite composure, while internally feeling like a kid in a candy store with not enough money to pay for it places me squarely in the "aspirant" category.

Every annual bonus I have earned has been meticulously stashed away for my next luxe splurge, fuelling my collection (My mother even joked after my admission to Sloan that I could use the bags to fund my course!) and my wanderlust - apart from the romantic streets of Paris and the alluring landscapes, Europe offers the sweetest deals on luxury bags— lowest prices plus tax rebates right at the airports! Which means my luxury bag fund has to include a vacation fund too – making the saving extremely exhausting on my mental health! And yet I am not in the “by invite only” list of Hermes!

I have had countless debates with friends who argue that knock-offs offer the same prestige without the hefty price tag. But they are missing out on the magic of the real deal. It is not just shopping; it is an event that makes you feel exclusive and special. And no other brand does it quite like LV. Whether in Paris, Tokyo, or any corner of the globe, the warmth of Louis Vuitton outshines them all.

In Hong Kong, the scene outside luxury stores is almost ironic, adding steam to the arguments made by my friends. Picture this: eager shoppers queuing up outside luxury stores, each waiting for their turn to be treated like royalty. Meanwhile, just across the street, you will find stalls flaunting the first fakes of the very brands these shoppers are queuing for. But, the only redeeming factor for me is that there are very few to no Louis Vuitton first fakes I have seen there!

This leads me to ponder the delicate balance luxury brands must maintain among their diverse customer segments. I know all too well that in tough times, spending on luxury items is not feasible for the “accessible” and “aspiring” segments and unfortunately they are in majority compared to the “absolutes”. Thus, balancing the needs of the absolute, aspirational, and accessible segments, while preserving a brand’s aura of unique, discreet luxury, is no small feat. Additionally, as luxury brands expand into online retail, despite its convenience, cannot fully substitute the sensory and personalized experience of an in-store visit. However, for me, sacrificing the allure of mystery to shift towards the mass market could diminish the essence of true luxury and be a death knell for luxury brands. Distribution channels are a vital reflection of this very distinction

From selecting prime retail locations to launching limited-edition collections and strategically choosing wholesale partners, every decision is critical. Reimagining the online shopping experience for direct-to-consumer channels – introducing live streaming for exclusive viewing of new launches, virtual exhibitions by invite only, easy access to support via chat, email, or phone, virtual appointments where customers can receive one-on-one consultations - could be game-changing. This approach, coupled with stringent anti-counterfeiting measures and initiatives to align with local preferences, could propel Burberry forward without relying on broad mass appeal. Ultimately, it is the allure of exclusivity and mystery that elevates the desirability of luxury goods.

[amritaself]

Influencers and Illusions: Navigating the New Norms of Product Diffusion

While reviewing reading on Product Diffusion, I was frequently interrupted by a flurry of Instagram reels from my cousin. Each notification was a reminder of the significant role that influencers now play in product diffusion, regardless of the brand, be it Louis Vuitton or an obscure skincare line. It is clear that influencers have become essential to spreading products widely, yet this influence could be coming with its own costs.

My first solo trip abroad on work was to Canada in 2008 – important to note the “solo”, basically no restraints. It was with extreme confidence that I walked into a Louis Vuitton store and made a purchase without bothering to check the exchange rate or what my credit card company might charge me. I was offered a glass of champagne, strut around the store as if frequenting high-end stores like Gucci and Prada was routine for me. Well, since that day, my mother has not stopped giving me sideway glances and sarcastic taunts – “ah the INR 150,000 bag is going out. We cannot be seen standing next to it”, not to mention the tennis elbow I got carrying it at the crook of my elbow. However, the point being that – Louis Vuitton is an experience. The pride of owning it and showing it off, is all a part of the “luxury experience” that fuels the word-of-mouth publicity, building the network necessary to reach the precise target market Louis Vuitton aims for.

Influencers posting frequent and inane reels of their days clad in LV pajamas, brewing coffee with a Dolce & Gabbana machine, wearing Tiffany earrings, and shopping in a Bentley makes luxury seem commonplace. When something appears frequently and easily accessible, it no longer seems difficult to own. While this visibility may benefit the brands' business, the novelty of luxury begins to diminish, at least for me.

The prevalence of skincare reels still astonishes me. It is surprising that dermatologists have not lost their jobs given the contradictory advice on platforms like these. One day, there is a flood of posts, reels claiming retinol thins the skin barrier; the next, they say it strengthens it. Meanwhile, Sephora's online sales skyrocket, with over 50% of customers trying a product for just a day—regardless of whether it suits their skin—only to abandon it the next. Unlike clothes or shoes that can be passed on, half-used bottles of retinol cannot be as easily transferable, leading to significant waste. This not only represents a financial loss but also poses disposal challenges due to the active ingredients these products contain.

The essence of product diffusion extends beyond simply assessing how quickly and widely a product will permeate the market, or determining why it may fail or succeed. It is crucial to consider this process as part of a broader landscape that encompasses understanding the target market, the core identity of the product, and the cognitive associations you intend for it to provoke among various segments. This should all be done within an ethical and integrity-based framework, ensuring that adoption is genuine and not merely a result of overwhelming sensory exposure.

[amritaself]

Reversing the Sales Incentives Plan for Higher Motivation and Performance

Dabbling with the artifacts of consumer behaviour, I have been fascinated to try the application in different contexts, particularly within the realm of employee motivation. The potential to uncover and activate the appropriate motivational triggers for distinct employee groups is intriguing. And it would be logical to think that motivated employees not only have an impact on the commercial success of the organisation but also the brand. And therefore it is often sad to see the comparative dearth of opportunities to experiment, as it is not always easy to secure agreement from parties interested in exploring non-traditional approaches which may not necessarily guarantee success. 

Effective incentive programs require managers to align team preferences, motivators, and goals with available options. This personalization is key for optimal results. However, paying incentives after meeting quotas can lead to neglect of essential non-sales activities like training and teamwork, crucial for long-term success. Furthermore, a tiered bonus system can be demotivating if agents are continuously stuck between tiers, potentially causing missed business opportunities. A heavy focus on quotas can hinder customer-centric strategies, potentially sidelining strong, lasting customer relationships for quick wins. More importantly, this narrow focus does not encourage innovation and exploring new markets, limiting growth potential. 

While some argue that it is not solely about motivating the sales associates, but also about optimizing the entire sales enablement model through an analytical and scientific approach to goal-setting, I would love to study the impact of, keeping everything else unchanged, looking at associate motivation through the lens of prospect theory in crafting sales commission structures holds significant potential. Human psychology exhibits a pronounced aversion to loss; the fear of losing something already possessed is far more powerful than missing out on a future reward. In addition, consider incorporating key behavioural traits such as hyperbolic discounting (value of money today is higher than in the future) and reciprocity (responding to trust with loyalty) into an efficient sales commission structure, aligning with human behaviour to enhance motivation and performance.

Say you give a $1,000 bonus for every $10,000 worth of products sold and a $2,000 bonus for every $20,000 worth of products sold. Your sales reps who consistently make between $15,000 and $18,000 worth of sales could feel deflated and start dragging their feet after making that first $10,000 sale. The challenge is how to inspire them to think creatively and strive to surpass the $20,000 mark. Now consider a different scenario where the organisation trusts that the sales associate has the ability to do well and perform above expectations and pays the bonus on the first of every quarter. Note that this payment is subject to meeting the communicated goals that will be available by end of the quarter to evaluate. Given that the associate will have to pay back the bonus amount previously received, the pain of loss will ensure that the sales associate puts in the maximum effort that he or she can. The immediate threat of losing an existing benefit often proves more compelling than the allure of a prospective one. Correctly moderated, the fear of losing what one already possesses can serve as a potent motivator, spurring sales associates to remain vigilant, creative, and innovative in their efforts.

Would love to hear the discussion on class tomorrow to understand this better and hopefully varied examples of application of “nudges” to influence consumer behaviour within the boundaries of fairness and ethics.

[amritaself]

Customer Journey Mapping: Staying Relevant

Customer Journey Maps offer businesses a comprehensive and detailed view of the customer's engagement journey. These maps reveal critical insights into the customer's needs, challenges, and emotional experiences at each touchpoint. Such in-depth understanding enables organizations to refine their products or services, ensuring a deep alignment with evolving customer expectations.

The process of Customer Journey Mapping goes beyond the typical product development pre-work - it is an essential part of effective product management. These maps provide a cognitive map of the brand, capturing both positive and negative customer experiences. Positive experiences can be turned into compelling narratives that enhance the brand identity and influence its perception in the market. Conversely, negative experiences offer invaluable lessons, driving improvements that can significantly enhance the overall customer journey.

Customer Journey Maps are more than just analytical tools - they are foundational to the legacy and success of a brand. By intricately integrating stories of triumph and tribulation into the brand's essence, these maps steer the organization towards success or failure. Engaging customers, whether in B2B or B2C contexts, through the lens of understanding their "journey" fosters a more authentic exchange of experiences compared to traditional "Voice of the Customer" approaches. The latter tends to emphasize the negatives, likely influenced by the nature of the questions asked and the demeanor of the interviewer.

By focusing on the customer journey, the conversation shifts to a more objective plane, facilitating easier interaction. This framework encourages participants to be more forthcoming, sharing genuine experiences without the apprehension of judgment or bias. The comprehensive understanding gained through Customer Journey Mapping enables organizations to refine their products or services, ensuring a deep alignment with changing customer expectations and driving long-term brand success.