“Pay no attention to that man behind the curtain,” says the Wizard in an iconic scene from the classic Wizard of Oz.  As Dorothy, Scarecrow, Tin Man and Cowardly Lion stand in awe of the wizard’s image projected on the big screen, complete with pyrotechnic special effects of flashing lights, booming thunder, fire and smoke, Toto pulls back the curtain to reveal the real man pulling the levers.

That reminds me of the current state of luxury marketing today.  Luxury brands are focused on high-tech ‘smoke and mirrors’ to create even more dazzling and awe-inspiring impressions of their brands that flash up on the screen of people’s computers, tablets and cell phones.

But while so many luxury brands are investing huge amounts of time and money to make those special effects, a few brands, such as Intermix, Porsche, Bottega Veneta, and Gucci, are putting their efforts to where the real power of luxury branding resides: on the people side of the marketing equation.

The power of person-to-person retail

Milton Pedraza of The Luxury Institute and I share a similar view of the most powerful way to bring the luxury value of a brand to the attention of discerning customers with money to spend, through person-to-person retail, me in my new book, Shops that POP!, written about and for specialty retailers and The Luxury Institute through new training initiatives designed to enhance the retail experience.

I recently sat down with Milton to pull back the curtain of the most underused, yet most powerful marketing strategy available for luxury brands today:  the personal relationships made by the customer-facing retail sales staff.

Milton asserts that in their marketing and advertising mix, luxury brands have been focused primarily on the spectacular, new and shiny opportunities offered by technology, “Retail technology, social media, and e-commerce are the hot topics. And those are very important.”

But their infatuation with technology is distracting them from focusing on the human element.

Ironically, Milton points to how digitally-native brands, like Bonobos and Warby Parker, which have mastered all the high-tech marketing techniques, are now opening stores and bringing their virtual experience into the real world.  “They’re beginning to understand that high performance customer relationship building is, and will be, the true differentiator, especially as robots and artificial intelligence take over the mundane tasks that retail front-line people are forced to do today,” he says.

Like the internet disruptors now establishing footholds in traditional retail, established retail brands are waking to the importance of developing their personal relationships with customers.

That too many retailers are underperforming on the shop floor is without question, as he notes, “The top 20% of sales associates account for 80% of the sales. They are critical to the business. And yet, there is another 80% of sales associates who are under-trained, under-utilized and under-performing. The high turnover in associates leads to customer turnover and massive amounts of lost potential and revenues.”

The value for brands to realize and develop the potential of their human capital is clear.  Milton explains, “By consistently delivering expertise, empathy, trustworthiness, and generosity, sales associates who develop and demonstrate high emotional intelligence deliver: extraordinary human experiences, make clients feel special, and create personal emotional connections that drive long-term loyalty.”

Milton understands the difficulties for brands to select, train and retain the best sales staff, but knows the competitive advantage when they rise to the challenge. “’Difficult’ is where you find true and sustainable competitive advantage because no one will follow you there,” he says.

To address the challenge The Luxury Institute has developed two programs: a high performance client relationship system for brands, called Luxcelerate, and a new student-based program, the Retail Performance Academy, to train the next generation of high-performance sales associates.

The need to develop the person-to-person potential at retail is clear and both the brands as employer and the career sales professionals will benefit.

“Great retail brands in apparel, accessories, automotive, and dozens of other retail categories, are desperate to find qualified people where you can earn $60-120k in 3-7 years as an associate, or manager,” Milton says.

He counsels, “In specialty retail and luxury, the job of a high performance relationship builder will become far more important, and the individual will be far more skilled. Human relationship-based client conversion and retention will be recognized as the critical drivers of revenues and profits in retail.”

Great customer service never goes out of style

As the adage goes, ‘What is old is new again,’ the heritage luxury brands and the great retailers reached their pinnacle by building extraordinary personal relationships with their customers, day-in, day-out, face-to-face, and hand-to-hand.  That never should have gone out of style, but unfortunately too many brands and too many retailers have been seduced by the attractions that technology promises.  Milton and I call on those brands and retailers to get back to what made them great in the first place – the personal relationships built on the sales floor.

Join Milton and me at Luxury Daily’s Luxury FirstLook 2017:  Time for Luxury 2.0

Milton and I will share the stage Wednesday January 18, 2017 for Luxury Daily‘s 5th Annual Luxury FirstLook (https://www.luxurydaily.com/announcing-luxury-firstlook-2017-time-for-luxury-2-0-37/) conference at 10 on the Park at Time Warner Center, 60 Columbus Circle, New York City.  We both look forward to meeting you there.