Lloyd Princeton, founder and president of Design Management Company, recommends adapting time-honoured marketing tools to the new business age and cites Luxury Society as a way to stimulate relationships in the value chain.

These days, as power has shifted to the consumer, nothing works better than word-of-mouth or as it now referred to as WOM. Why?

Because WOM incorporates all of the four proven sources of customer power as discussed by Glen Urban in his book, “Don’t Just Relate-Advocate,” it’s an old school tactic with new school charm. It grants access to information, emphasizes alternatives, is all about communication among customers, and allows the customer to avoid the rat-a-tat-tat of marketing messages.

Yes, the Web aids and abets all of this, and spending big bucks on branding drives the message home, but it is really about people interacting with each other. Isn’t it?

This power shift, coupled with a renewed interest in WOM, has also influenced the way marketers think about relationship marketing in terms of both customers and value-chain partners.

Peter Drucker in his 2002 book, Managing in the Next Society, pointed out “The customer now has the information … that means the supplier, e.g. the manufacturer, will cease to be a seller and instead become a buyer for the customer.”

We have found in working with interior design firms throughout the country that being a buyer for the customer is old hat. And in the luxury marketplace in particular, the challenge is to extend this role beyond the traditional interiors orientation to broader lifestyle, technology, and quality of life decisions. Interior design firms play a major influencer role in the buying cycle for a wide range of products and services.

These may range from recommending a wine lovers vacation tour, to what car to buy, to where is the best place to retire?

What differentiates the interior design community is the commitment to design and the resulting aesthetic as the raison d’état of the client relationship. Because of this, the relationships can be characterized as more emotional, warm, and personal. This tends to build trust and confidence and contributes to long term relationships.

As we see design move to the front of many buying decisions, like-minded value chain partners need to address how they can work together to meet customer needs. The Luxury Society is one such example of how to stimulate relationships and ideas.

Our point here is there needs to be some new faces and innovative partner marketing programs to stimulate a wider reach of WOM, both on-line and off.

It isn’t because interior design is just for the wealthy and high income wage earners of the world, as Target and Ikea have taught us, but many interior design firms specialize in meeting the needs of the luxury market, a category that is no more homogeneous than the boomer or the GLBT markets which crisscross all gender, wage, income, and lifestyle categories.

We work to help design firms segment the luxury market and to focus on developing a client roster of like-minded individuals with similar personal drivers and to identify partners who also place a high value on design and have adopted what Richard Baker, CEO of the Premium Knowledge Group, calls “vertical lifestyle strategies.”

Again, when it’s about long term relationships and WOM, it is about lifestyles, amplified New York style in “the book,” and expanded to include not only the wealthy as measured by assets but high wage earners and the emerging ‘mass affluent’ market of 22 million households with $100,000 to $1 million in assets (excluding real estate).

Sometimes it’s a market of one.

At a meeting of the Luxury Marketing Council of San Francisco, Richard presented a segmentation schema used by the Premium Knowledge Group in its research for major brands such as Forbes, Estee Lauder, and Karl Lagerfeld that identified three levels of affluence (classic high, medium, and low, but calling out a distinction between asset and income-based) across six major lifestyles, each with specific personal or buying drivers.

It’s easiest to understand by thinking of Donald Trump as an “unmistakable affluent” who wants nothing better to put on a show everywhere he goes to Warren Buffet as a “dependable affluent” who values a good buy at the right price over flash and dash. An important brand attribute for an unmistakable lifestyle is visual design, while practicality is the call of the dependable.

What Richard emphasized is the importance of building a business level-by-level, trump-by-trump, within specific lifestyles. He gave Jaguar as an example of a company that decamped from unmistakable to economical, abandoning its emphasis on design, only to find itself with 100,000 unsold vehicles. It’s hard to imagine a client list peopled with Hummer driving Donald Trumps, but the message is focus, focus, focus.

It was after the audience had a better understanding of the breadth and complexity of the luxury market and the importance of focusing, when Richard brought us back to the two inter-related topics that began this article — customer power and WOM. He too emphasized their importance, making suggestions that included partnering with non-profits to connect with prospective clients at the board and committee levels. Initiating and maintaining relationships remains central to all prospecting efforts.

We will continue to help our clients develop local, national, and international relationships with manufacturers inside and outside the design industry to expand the value chain and to extend the partnership theme to clients as well.

Such collaboration will generate not only innovative marketing and partner programs, but also new products and services for our clients. To paraphrase Mr. Drucker, it’s all about being the buyer for the powerful and, for many design firms, wealthy customers who place a high value on design.

Old hat, new shoes, and partners who dance to the same tune is what it will take to prosper in the growing luxury market.

Lloyd Princeton