Investor relations: a luxury marketing strategy - Emeric Delalandre

Investor relations: a luxury marketing strategy
with emphasis on application within sustainable finance
by
EMERIC DELALANDRE
Keywords: investor relations, sustainability, finance, luxury marketing, stock market strategy,
long-term, shareholder value, co-design.
Abstract: The aim of this master’s thesis is to explore the potential relevance of the luxury
marketing practices for the investor relations in finance, with a sustainable approach. The
consumer-centric and pioneer luxury strategies are successfully used in diverse industries and
market ranges. For this reason, a further application in the financial market is proposed to be
tested, with the aim of describing the suitability for further development. This papers first
analyzes the existing researches about the topics. Then, an open data examination and
discussion with industry players is conducted. Finally, an investigating questionnaire about
sustainable investments helped to challenge the future of investor relations. On the basis of the
results of this research, it can be concluded that treating investors as luxury consumers and
enhancing a long-term financial strategy centered on the humanity behind the shares, crates
value for shareholders. Sustainability becomes the center of competitive advantage. This thesis
hopes to offer useful tips for organizations to perform in the competitive financial market.
a dissertation
supervised by:
IVAN COSTE-MANIERE
submitted to:
Skema Business School
The Poole College of Management of North Carolina State University
in partial fulfillment of the requirements for the degree of
MSc in Global Luxury Management
August, 2016

Investor relations : a luxury marketing strategy, by Emeric Delalandre.! ! 1!
! !

!
! !
INVESTOR RELATIONS : A LUXURY
MARKETING STRATEGY
With emphasis on application within sustainable finance
Emeric Delalandre
MSc Global Luxury Management
Skema Business School - North Carolina State University
August 31,2016.

Dedication
This research is dedicated to my mother, Emmanuelle Losito (deceased), and my
grandmother, Anne-Marie Losito. Both of these women instilled in me a interest for luxury,
sustainability, entrepreneurship and exemplified the limitless possibilities and joy that can be
achieved through finances.

Preface
This thesis is one of the challenges of my work at the European Institute of
Entrepreneurship and Management (Iteem, Ecole Centrale de Lille), Skema Business School
and the North Carolina State University. During the past years, I gained knowledge and
experience, as an individual, as a student, as an employee and as an entrepreneur in marketing,
engineering, project management and business operations. Sustainability and finance are two
of the areas I have always been passionate about but that I never had the chance to explore
deeply. I am grateful this research gave me an opportunity of a lifetime to discover the links
that we could make between different corporate areas in order to disrupt and better a traditional
approach of finance.
The goal of this research is to introduce and demonstrate a new framework to market investor
relations. This innovative methodology, the luxury and conversational sustainable approach,
combines multiple attribute strategic decision making with exploratory modeling to integrate
expert behaviors to evaluate diverse options, with the intent of generating useful insights. The
purpose of a luxury strategy in financial marketing is demonstrated in this dissertation through
an analysis of current and future shareholders’ values. The special contribution of this work is
the luxury marketing parallel process for finance itself, and the opportunities that it brings,
especially the ability to explore implications of divergent investor segmentations.
This dissertation could be of interest to high-level decision makers, in the stock exchange
specifically, but also in other private and public organizations concerned by financial humanity.
It could also be of interest to scholars of decision analysis and operations research, practitioners
of marketing analysis, financial strategy, and business consulting.
I hope you will enjoy reading the reading. Feedbacks are much appreciated.
Emeric Delalandre.

Table of contents
Dedication 3
Preface 4
Executive Summary 6
Introduction 8
Literature Review 10
Methodology 20
Results 24
Conclusion 37
Discussion 40
Appendix 42
References 48

Executive summary
Modern contexts are suggesting a reconsideration of top-down marketing strategies and
methodologies to all types of stakeholders. This research is concerned with issues from these
novelties and uses the case of sustainable finance as an illustration. Groups of investors, once
assumed to be homogeneous and looking for monetary returns on their investments, are proving
to have different personalized needs and are resisting conventional segmentation techniques as
the (commonly used) quarterly financial results. They look for more conversational
consumption paths and do not really look anymore for transactions from an offer plenty of
clients, the investors being the consumers of the financial products. Investor relations’
departments of companies, structured, formalized, short-term risk avid and long-term
engagement averse, may reconsider their preference for uniformity to deal with different,
challenging and evolving opportunities. A luxury marketing approach is proposed as a potential
opportunity based on a challenging correlation of recent behavioral considerations and
sustainable financial investment trends incorporating contributions to marketing thought. The
business idea is founded in the creation of a new experience for the stakeholders’ community
based on discussions with decision-makers. The concept aims to add a qualitative
differentiation point between share options, a collaborative responsible decision-making
process for the corporate governances and structure a challenged investment industry for the
creating of an efficient, disrupting and differentiated offer for investing and taking a role for
the future of an ecosystem.
Methods of analysis include a literature review of marketing both in finance and in luxury, a
qualitative investor study on current responsible investor relations and a quantitative survey
research on existing and potential investors of sustainable financial products to track the results
of the analysis and the impact on the idea of adding some luxury into shareholders’
management. Results show the existence of an initial marketing and business potential.
Investors recommend a change in the process by the corporate investment community idea, find
the sustainable approach interesting, but highlight the need for more appealing, customized,
marketing plans and product solutions in a value-adding format (more consistent, easier and
less complex). In addition, a concern with regards to overall recognition, not being structured
enough to currently attract the longer risk-taker is expressed. Qualitative and exclusive
experiences instead of mathematical ratios would be a way to gain attractiveness.

The aspiring investors for future purposes can definitely not be categorized in groups with
regards to interest and intention. As a result, a tailored and luxury approach in marketing would
be a great predictive opportunity to ensure an impact in converting and sustaining new financial
supporters. Results also indicate that a satisfying shareholder’s management team should focus
on a collaborative and design-thinking growth of the business. Overall, it is concluded that, by
underscoring what makes a difference, how an offer is set apart and why the investor relations
are proactively ensuring that the strategy, the corporate governance and the shareholder value
are aligned, an unfair advantage could be reached through a zero-compromise luxury strategy.
There is the evidence of a vital importance of board members’ knowledge and responsiveness
to connect with today’s dynamic, consumer-centric markets and suggest organizations can
better appeal to both consumers and investors through the education of knowledge, authenticity
and personal experiences.
The original idea of a potential interface between sustainability and finance through an
exclusive and highly customer-focused marketing strategy has been challenged and additional
implementation propositions have been tested. The recommendation put forward by this thesis
is that further researches are needed to consider the potential of a more detailed marketing
strategy. It would contribute to test, after implementation, investors interest and attitudes
towards the modified concept, to define the tools which could be used by company to adjust
their relations, to quantify the potential overall business, and the impact of changing the
financial behaviors into long-term for different ecosystems, in different communities.

Introduction
The American Marketing Association defined Marketing as "the activity, set of
institutions, and processes for creating, communicating, delivering, and exchanging offerings
that have value for customers, clients, partners, and society at large". Beyond the final-customer
level, at a corporate level, marketing aims to attract people towards a brand image or identity,
to create value. To that extent, the perception of a brand may affect behaviors, including
decisions to buy a product or a service, as well as to invest in the company (Aspara and
Tikkanen, 2011).
Within the context of a globalization era, the need to be understood by the financial actors has
increased, making investor relations a strategic tool for public companies. A company is no
longer appreciated by its clients’ voices only, but rather by all the audiences that take a role in
their activity, especially the ones who invest with the goal to make a profit on it. With the rising
influence of media over the last decades, consumers’ and investors’ behaviors are more linked
than ever. For example, should a prospect hear that a company has a bad financial situation, he
or she probably would not become a client and if a bank were to know that the customers’
interest in the brand is decreasing, it would probably not invest in the company anymore. When
a corporation focuses on offering an updated competitive value to its clients, the need for funds
provided by the shareholders rapidly increases, creating a new challenge for the corporation to
face: making the potential investors invest in its shares instead of its competitors’. To that
extent, the company hence needs to prove that it can offer a better value as an investment.
Several points are important as far as an investment is concerned. Even if the financial outcomes
remain the final indicator of the growth and wealth of a company, there is an evidence that
investor relationship management quality (relationship, orientation, trust, commitment and
reciprocity) generates favorable outcomes in the financial marketplace and actively contributes
to the required shareholder value creation (Hoffmann, Pennings and Wies, 2007). Most of the
crucial dimensions of the investor relations management quality are common with the values
of the consumer’ expectations when it comes to luxury shopping: rarity, excellence,
timelessness, honesty, tailored, pleasurable, experience and expensiveness (Fraser, 2014).
Links between the organization and its stakeholders such as customers or suppliers are
explicitly regarded as market-based assets (Coyne and Witter, 2002). Although, recent
marketing-finance literature does not explicitly deal with the relationship between a company

and its investors in such a way. Given the lack of research on how to build an efficient marketing
strategy to enhance the investor relations through a sustainable approach of finance, this paper
offers to develop on how a luxury marketing approach could be useful to this end. It is a novel
finding in the corporate marketing literature which could impact the structure of business
management because the biggest companies collectively allocate millions of dollars each year
to investor relations and dividends, yet little research has been conducted into why and how
such an investment could pay off.

Literature Review
From shareholder to owner
To support and finance their long-term growth, most companies, even in the luxury
sector which aims to promote exclusive values normally, are going public or are opening their
capital to a large number of investors. Usually thinking that these companies belong to the
shareholders who invested in, analysts, lecturers, business leaders, politicians and, as a result,
almost the entire population who have already heard of the stock market, believe that the goal
of these public corporations is to maximize shareholder wealth. The idea that corporations exist
only to maximize shareholder value come from the Nobel Prize winner Milton Friedman who
published in 1970 an essay (“The Social Responsibility of Business is to Increase Its Profits”)
in the New York Times arguing that the only proper goal of business was to maximize profits
for the company’s owners, assuming to be the company’s shareholders. Then, a 1976 article by
Michael Jensen and William Meckling titled the “Theory of the Firm.” which is still the most
frequently cited in the business literature underlined Friedman’s point by assuming that
shareholders owned corporations. Nowadays, there is a debate when the corporate objective is
for the governance to assure financial investment entities and other shareholders of their equity
investments. Because shareholder wealth maximization involves to take the financial risks as
well as the rewards, the dimension of risk taking clearly has to be considered in the notion of
shareholder value.
Assuming this approach to be true, the share price is consequently the easiest way to measure
the shareholder value, which leads the top management to focus on raising their stock price.
Because there are plenty of options in the stock market for an investor with different firms or
financial products, the competition between the option-makers is primarily based on the
profitability of the shareholder offer. This approach of finance has shaped the global economic
world for the last decades, introducing corporate terms like “investor relations”, providing tons
of opportunities to the world which has been exponentially developed in different areas thanks
the funds raised. However, the strengthening quest of maximized short-term wealth creation for
shareholders lead some corporations to act in an unsustainable way by selling key assets, cutting
into their workforce, reducing their customer-orientation, forsaking their research and
development, and incentivizing their chiefs to do so, to pay large dividends to their financial
supporters. This strategy has been designed to attract new investors and make the actual

financial supporters repurchase company shares. As a result, a lot of these companies became
bankrupt after generating wealth to their shareholders by trading their corporate values and
customer-orientation. Nowadays, CEOs feel uncomfortable about such strategies, assuming
that a single-minded focus on share price will definitely not serve the long-term interests of
society, the company, or shareholders themselves. The problem is that, even if they are
associated with a team of executives with the bests MBAs from the most prestigious business
schools, they eventually do not have any plan to create an offer which would be appealing for
each stakeholder. The shareholder wealth thinking should have improved the worldwide
business’ performance in many cases. Public corporations were the reason for a thriving
economic system. However, in the recent years, some business sectors have dropped, causing
humanity scandals, environmental disasters, tax frauds and the near-collapse of the financial
sector in 2008. Why?
Shareholder or stakeholder value-creation?
The traditional journey of a privately owned company going public starts with success in
creating value for its customers while managing well the different internal and external aspects
of the business. Then, by introducing some financial sources which are transitionally and
indirectly a sort of client of the business, it looks like it is impossible for such companies to
succeed in managing well and properly different types of entities with different needs: the core-
business customers and the investors. As a result, some can completely stumble while they
typically had little or no analyst coverage before and must now take a more pro-active role in
their relation with shareholders to avoid restricted access to capital and generates something
which makes the structure grow. What is sure is that any organization exists to create value, but
what does it mean? What the purpose of the corporation ought to be, if not to only maximize
profit and share prices? Value creation is the goal of all companies, but corporate value creation
is not always aligned with value creation for society as a whole.
Decades ago, when shareholders were financially long-term oriented, the directors of a global
public company would have probably said that the company’s purposes were to provide
shareholders solid returns, but also to market great products, to deliver outstanding customer
services, to offer decent lives as well as personal development opportunities for employees, and
to contribute to the community and the nation. Since the 1980s, it has become common to be

told the company has a unique purpose, to maximize its shareholders’ wealth after concluding
that managerialism must be inefficient and outmoded according to powerful interests’
communities composed of institutional investors and CEOs whose paychecks were decided
regarding their stock performance. Today, this approach of shareholder primacy is balanced,
because it is becoming clear that the shareholder wealth optimization way of thinking has its
limits: in the United States, the number of public companies has declined by 40% in the last
two decades and the life expectancy of listed companies has been considerably reduced from
75 years in the early 20th
century to only 15 years today (Steve Denning, 2011). Besides, in the
1950s, the average holding period for a share traded on the New York Stock Exchange was
about seven years and now it is six months. Finally, high-frequency traders whose holding
periods can sometimes be measured in milliseconds represent 70% of the volume of trade on
the New York Stock Exchange per day. This evident correlation is not enough to prove the
inefficiency of short-term optimized financial returns to deliver value for investors. In its « The
Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and
the Public » book recently published, Lynn A. Stout shows that shareholder primacy is an
abstract economic theory that lacks support from evidence and is actually incoherent by
exploring the logical connections between the rise of shareholder value thinking synonym of
wealth maximization and subsequent declines in investor returns, numbers of public companies,
and corporate life expectancy. A 2013 study by Robert Eccles, George Serafeim and Ioannis
Ioannou explores the monetary performance of companies which had voluntarily adopted
sustainability policies against companies that had not and they highlighted that companies
considering sustainability outperformed their competitors. They explained that if we consider
someone who had invested $1 in a portfolio of such companies in 1993, that investment would
value $22.60 by 2010 while that same $1 invested in an option not including a sustainable
approach would have delivered only $15.40, which is 32% less financially performing.
The traditional economist way to see shareholders, who aim to help companies to develop their
businesses by funding them, as owners of the company, is mistaken. Easily, public
organizations are legal entities that own themselves. Just as you own yourself, just as
shareholders own themselves, just as customers own themselves, just as any entity owns itself.
Investors, linked to an entire network of entities, own shares of the quote they paid for, which
give them limited rights (of vote, for example). It can be compared to a customer who buys a
product from a brand for some reasons and then can use it for personal purposes. A shareholder
doesn’t have any superiority power on suppliers, employees or consumers about the business

they are just associated with: they can all be seen as equal touch points of a unique ecosystem.
Legally, there is another limit to the shareholder-centric approach of a business because this
would mean that maximizing their residual interest in the company equals to maximizing the
value of the company itself. The board of a healthy structure has legally the power of choosing
to distribute dividends to shareholders but also to raise its collaborator salaries, invest some
profits in the future of the company, or anything else. Finally, shareholders do not have any
direct legal authority to control directors or executives. As a matter of fact, they are more legally
exposed to recover damages from the board in lawsuits than to make money. As Bebchuk
developed in “The myth of the shareholder franchise” (2005), shareholder primacy is a
managerial state of mind from the direct decision-makers and not a legal requirement as many
could think. Yes, they can choose to create wealth and reward the investor with extra-money,
as well as they can decide to go for any other project that fits the law. Actually, “modern
corporate law does not require for-profit corporations to pursue profit at the expense of
everything else, and many do not”, according to the American Supreme Court.
A debate between short- and long-term orientations
In reality, companies’ top management mostly opts to be more shareholders and finance-
oriented than customers and marketing-centric. With all these years of experiencing and
analyzing the stock market, there should be a reasonable evidence showing clearly that
companies adopting sustainable strategies should perform better and produce higher investor
returns than corporations that do not. At this point, it is highly possible that individual
stockholders care only about their personal quick profits, instead of investing and taking a
conscious role a for the future of a company. A company is designed to last for long periods,
build strong long-term relationships with its customers and partners while the individuals that
are supposed to be their owners and representatives want to play it short-term and self-centric?
There is a philosophic gap pointing out how shareholder wealth-artificially increasing strategies
making a profit for one shareholder in one period of time can results in a concrete loss for
shareholders collectively over a longer period of time. One man’s meat is another man’s poison.
Some shareholders desire companies to make long-term engagements, others may want to profit
from opportunistically exploiting stakeholders’ commitments. Some investors are undiversified
while most are diversified, and worry about the performance of multiple investments. Some

shareholders probably may not care if their shares earn profits by breaking the law, hurting
employees and consumers, or damaging the environment while other are ok to sacrifice at least
some financial returns to ensure the companies they invest in contribute to a certain growth for
the society. There are plenty of diversities among investors but most organizations are currently
talking to their financial contributors in a unique way, through financial reports for example
which seem to be not adapted alone in any market. As an example, consider the differences
between short-term and long-term investors: the stock price used to consult a company
historically has been discredited, and we can now see some business strategies that upmarket
share price for a short period while taking the risk to negatively impact the company’s long-
term prospects. The traditional path could be a corporation cutting expenses for marketing or
research and development that might otherwise be dedicated for the long-term through massive
retributions or share repurchase plans. Short-term investors are recognized for pushing boards
to adopt such strategies. This type of arrangement is profitable for the activists, who typically
sell immediately after the share price rises but over time, this reduces the size and healthy pace
of public companies in general, leaving investors with less options. BP, the energy group, used
to pay large dividends and kept its share price high by keeping expenses down. Investors who
owned BP stock made a lot of benefits for years, especially those who sold before the
Deepwater Horizon tragedy: when tragedy finally struck, the BP oil spill damaged the price of
BP shares, but also other oil companies.
A similar dynamic exists when it comes to shareholders that want companies to treat their
stakeholders well, because because this encourages employee and customer loyalty. Even if
some shareholders can profit from pushing boards to exploit committed stakeholders, in the
long run, such corporate opportunism makes it difficult for companies to attract employee,
customer or more globally a stakeholder loyalty. This approach is risky, but because the size of
the total investing declines traditionally by doing so, it is probably riskier as a company to not
orient their commitment to their shareholders first (Blair and Stout, 1999).
The global economy needs investors
After reviewing many of the world’s financial misunderstandings that potentially could lead to
disasters, we should insist in how shareholders are valuable for publicly-listed companies and
how they are facilitating the development of our communities. Corporations, in reality, do need

resources to invest in their growth and not a lot have the luxury to have the cash needed
available so they rise capital from equity investors willing to share the risks that a bank would
not, for example. Because of the increasing interest of wealth creation by the influential winners
of the investment game, commissions have been lowered for everyone, but more for
institutional investors which, as a result, have increased over the past 50 years. These third-
party institutions usually take the proper-advantage of financial, computing, dehumanizing the
traditional investor-company relationship. And although individuals can pursue long-term
strategies that ignore real-time market fluctuations, institutions that are managing other
people’s money do not have the choice to do generates returns early on: their customers will
pull their money out because they bought a financial product supposed to generate a certain
percentage of profit, and not an investment as a product for a specific business cause. There is
a different causal approach when someone is directly engaged in a company as an investor than
if another company is invested for this person. In the first case, the physical person would feel
more responsible for the company as a whole, while in the second case it is more likely that this
person will just look at the wealth produced because it is not direct and common sense that the
ultimate goal of a company is to make money, so there is no problem. But, the more influence
short-term traders have on market quotations, the more volatile those prices are because they
are less rooted in the fundamental value of the corporations whose shares are being traded (Fox,
2012). Some volatility gives investors a reason to take a risk by investing for a desired financial
reward, but past a certain point, volatility kills liquidity and that is what happened at the
financial crisis of 2008. Investors are important to create growth which should result in creating
money, but there is a self-control to manage not to let the good for a few lucky ones resulting
in the bad for the rest. Stock quotes are companies with human beings and there is a value
behind the product seen by investment companies as only a financial product.
Also, shareholders can deliver a signal to executives with the evolution of the prices on the
stock market. By selling shares, they can show their disagreement with a strategic decision
made by the board. Moreover, shareholders may be useful for companies by just talking to them
because they might be well-informed and could offer crucial information, analysis, and advice
to management to make a right decision. Recently, such behaviors have been discouraged with
the Regulation Fair Disclosure implemented in 2000. As a result of this fair-play intention, the
dialogue between the board and the shareholders now usually takes place in public or during
the conference calls that follow the release of quarterly earnings. When nothing can be changed,
it is already too late, it leads the investors to bet short-term because they cannot do anything

anyway. Their voices could not be heard as advice because they are not involved in the process.
When there is a transaction and not a relation between two partners, then appears a demanding
approach for the shareholders and a suspicion on them from the board members asking how
could they well govern the corporation without communication? It seems crucial to adopt a
unique talk to each shareholders’ values. A research conducted in 2012 by Brochet, Serafeim
and Loumioti showed that executives with a short-term mindset attract investors who are
addicted to quarterly numbers when companies communicating mostly on the long-term vision
seduce more those ready to wait more for their money to flourish. That is completely balancing
the approach that described shareholders as the only decision-makers. Investor relations can
take actions and structure its communications to orient the public strategy. The tone used when
talking to investors is a purposeful indicator of the orientation because no company can create
superior value if its business and financial strategies are not aligned with the company’s most
appropriate investor type. Strategic leader’s value is directly impacting the shareholder and
stakeholder’s value according to Lichtenstein and Dade (2007). This research suggests that
performances are the result of different goals, values and visions (see figure 1).
!
Figure'1:'Sustainable'value'creation'is'achieved'through'aligning'the'organization’s'mission,'goals,'objectives,'strategies,'and'
tactics'to'the'vision
Different shareholders have different values and objectives so a possible alternative to replace
corporate financial maximizing which is a single metric approach balanced with a corporate
satisficing. As a matter of fact, the single objective optimizing perspective is reductionist. If
people made optimized decisions only, debates between options, tastes, places to go,
candidates, and so on would never appear. This is the human and corporate nature to look for
several objectives, and try to do decently well at each rather than maximizing only one. One
could act considering the corporate purpose is only from the perspective of the most
opportunistic result when another one could adopt the perspective of the company’s long-term

or shareholders together with other corporate stakeholders. As an investor relations strategist,
the ultimate goal should be, in the context of the organization goals, serve the interests of many
different shareholders because the role involves a corporate decision-making influence. By
doing so, it should allow retaining earnings to invest in future growth, keep commitments that
build customer and employee loyalty. This should also protect the investors’ interests by
adopting a profitable scheme for the company necessary for the firm’s long-term profitability.
It is impossible to expect directors to balance the competing interests of different shareholders
perfectly so investors and business leaders need to liberate themselves from the traditional
mathematic ROI shareholder value thinking. There is not a lot of disagreement that
sustainability is necessary to be competitive according to MIT Sloan Management Review
which conducted in 2013 a global survey on Sustainability and Innovation proving that almost
90% of the world’s leading executives and managers. Sustainability’s next frontier is to become
the heart of competitive advantage and long-term viability. Today, many companies struggle to
match their strong level of sustainability concern with equally strong actions.
A recent study, conducted in early 2016 by The Boston Consulting Group in partnership with
one of the world’s leading provider of financial information Thomson Reuters, tried to
normalize what are the investors seeking in a contextual volatile market. It showed that
investors are scaling back their expectations for total shareholder financial return and looking
for investments that are building value-creating sustainable businesses, not just returning cash
to shareholders in the form of dividends and buybacks, but having an impact. According to the
detailed study, investors believe that the cut costs to improve profitability and free cash flow
strategies are mostly played out. Cash returned to shareholders should continue to constitute a
large part of the value they perceive of their investment, but cash payouts alone won’t deliver
superior value, creating new challenges. The notion that managers’ firsts duties of care and
loyalty are owed exclusively to shareholders must be abandoned. Now more than ever,
companies need to find new ways to design value-creating growth, embracing marketing
strategies aligned with innovative visions such as portfolio reshaping, strategic acquisitions,
and business model innovation to improve their sustainability prospects. A reimagined purpose-
driven capitalism requires a willingness to balance private incentives with community goodwill.
The difficulty in sustaining superior value creation is that a company must massively exceed
investors’ expectations and not only on beating earnings estimates but by delivering results that
fundamentally transform the trajectory of the business. For example, Apple, which adopted a

brand new vision of product and business model innovation with Steve Jobs back, transformed
the company from a niche player in the exponential computer business into a one-among-others
consumer electronics player, positioning the company as the leader of a market almost 30 times
the size of its original one and fueling a decade of exceptional shareholder returns. Now, the
brand faces the difficult challenge of finding new territories of growth that can sustain its
amazing winning trajectory.!Developing a winning vision for value creation requires to involve
the entire stakeholders by allowing investors to influence business strategy as an insider.
Consequently, active investment can be an effective engagement tool likely to support the long-
term betterment of society.
Marketing is a key to support finance. Luxury marketing helps to make a difference.
The marketing function plays a great role of organizations’ wealth: studies have shown
the correlative link between marketing assets and stock market performance (Srinivasan and
Hanssens, 2009). However, marketing mostly does not incorporate a shareholder structure but
investor relations have been proven to positively influence intangible assets such as corporate
reputation and credibility in the financial marketplace (Doyle, 2000). A more performant
investor relations management quality is positively correlated with increased analyst
coverage, enhanced stock liquidity, a lower cost of equity capital, and reduced shareholder
activism (Hoffmann and Pennings, 2008). Much of financial marketing is very rational and
transactional. In parallel, luxury marketing is usually strongly aspirational, positive and
emotional. How could we explain that these two different industries can take a different
approach when sometimes speaking to the same target?
In 2010, Hoffmann, Pennings and Wies also proposed investor relations management quality
to be composed of five relational dimensions (relationship orientation, relationship evaluation,
trust, commitment, and reciprocity) and in addition to that, to be positively related to investor
outcomes in the financial marketplace (Figure 2). It implies that marketing is expected to
complement traditional responsibilities that are static and focused on the limited provision of
financial information. The approach should change into a dynamic two-way relational speech,
contributing to favorable outcomes and shareholder value. This could remind us the luxury
marketing strategy that goes way beyond the price, product, place and promotion offer.

!
Figure'2:'the'role'of'marketing'in'the'relationship'between'an'organization'and'its'shareholders'
!
Luxury is not only about a quality/price competitive advantage; it is about a distinct reason
why. Luxury also refers to high prices among customers of most countries but the prices can
never be justified by a gap in product quality or performance alone (Godey, Pederzoli, Aiello,
Donvito, Wiedermann and Hennigs, 2013). This means that luxury brands create value far
beyond the satisfaction derived from superior quality. Luxury is about intangibles such as
heritage, tradition, history, association to symbols, to an imaginary lifestyle (Karpik, 2010). It
is also a social recognition and distinction. Luxury is a precursor to different kinds of marketing,
by bringing new concepts and new techniques to another area, which have been adapted to
mass-consumption, with the personal relationship with the client becoming CRM, the lending
of an object becoming product placement and word of mouth becoming buzz marketing. Some
luxury concepts like searching the customer’s dreams, keeping a personal contact with them,
being ethical with the stakeholders, or looking for quality of product and service before the
price could be applied to the investment markets to rejuvenate and gain high profitability for a
financial product. As sustainability is a crucial challenge for publicly-listed companies and their
investors, the luxury tradition of it could interest the investor relations marketers. It is now part
of corporate social responsibility (CSR) which, as a sign of the times, is part of the annual
reports of listed companies. Even if sustainable development is apparently far from the
expression of excess, joy, hedonism and social stratification attached to luxury, which goes far
beyond necessities, the luxury marketing strategy could also be social, ecological, economic
and be adapted to the financial marketplace. Luxury strategies are rarity strategies where
humans find their actual place, both as producers and as free and responsible consumers. This
should be the same with investors which, regardless of income, lifestyle or nationality, are
smart, sophisticated buyers who really care of what they buy, and follow a structured purchase
process that balances rational and emotional factors, with a timeline approach and with

considerations from recommendations. The thing is that it is always investors who seek
information through different forms of corporate disclosure such as press releases or earnings
announcements to be input into valuation models. Shareholders do like opportunities to interact
with investor relations on a more personal level with analyst conference calls, but efforts to
enhance the shareholder value could be done with marketing attentions and tailored services. It
could be a way to make a difference in the investment market.
In their 2010 article « Is the luxury industry really a financier’s dream? », Kapferer and
Tabatoni showed that in the luxury industry, consumers’ dream is the source of shareholders’
dream and, as a result, big investments. Luxury groups enjoy clearly superior valuation
multiples which could not be justified by shareholders financial expectations in terms growth
and profitability alone. There is the magic of luxury acting both for consumers and investors.
In practice, a luxury product has a long lifespan and is responsibly produced. This should also
be the same with financial products.!The tools forged for the luxury strategy can be easily
adapted to be the tools for adopting a sustainable finance with investors. Because many CFOs
think that investors care little about an organization’s performance on environmental, social,
and governance (ESG) metrics, few companies urge to develop their sustainability performance
and to communicate it to investors but if investors act like luxury consumers, they are not
expressing their needs and this is the role of the organizations to reveal solutions to these rising
concerns. While much of the financial world has been focused on the future talking about
wealth creation and little about what that future will look like, or how that wealth will be used,
being inspired by the luxury practices could help to talk about the positive changes occurring
now, their impact on long-term and on the promising future that can be expected for the future
generations of the investors. We already can come to a first hypothesis: investors care more
about sustainability issues than many executives believe. Nevertheless,
PricewaterhouseCoopers discovered in 2014 that the vast majority of investors were
disappointed with the sustainability-related information being provided because they wanted to
be able to compare with other investment offers. Could the problem of sustainable investment
be a problem of marketing? The fact is that the qualitative attention needs of stakeholders
continue to evolve globally and market demand for sustainability disclosures continues to
increase.

Method
When considering the necessity to get the support of investors for the growth of their
businesses, decision-makers are aware of the importance of attracting and retaining
shareholders like luxury entities do with their consumers. Understanding investor priorities is
a crucial business priority. Based on their understanding of investor interests, an organization’s
leadership will be able to dedicate corporate evolution and behavior in one direction rather than
another. The next step would be to define how a company could market its institution to get
strong investments from their financial supporters for sustainable growth. Indeed, should the
customer-oriented marketing strategy, be necessarily aligned with the investors-oriented one?
According to brand valuation experts, the luxury sector is the one where brands’ financial
values represent the highest percentage of their company market value (Murphy, 1991) with
priceless offers. In other words, the stock market expectations about the LVMH group shares
depends more on the desirability of the brand portfolio itself and its symbolic capital. What are
the levers and paths of these successful luxury pricing power? If everybody agrees that today’s
luxury brands should deliver feelings of privilege, pleasure, exclusivity and uniqueness, for the
brands themselves, then the operational question is how to produce these feelings to reach the
investors?
To achieve the objectives of this research,!a mixed method approach using qualitative tools is
applied in addition to sample analysis. Such a research design allows for more flexibility of
information gathering during data collection. It allows exploring more subject areas as they
arise during all phases of research. The study will propose to analyze existing management
investor relations literature with insights from marketing and identify how can organizations
sustain their desirability at the level of stakeholders’ experience. It will propose a mean to
analyze the relationship between a company and its shareholders from a collaborative
marketing and stakeholder perspective, hence recognizing the “investor community as a
customer” (Hanssens, 2009). By focusing on the several dimensions of the relationship between
a company, its shareholders and the marketing role in managing this through a survey of
referents about organization sustainability, this paper will define the challenges to face and the
best practices to apply in order to build an efficient investor relations marketing strategy by
using the fundamentals of luxury. Through a proactive analysis of investments connecting
sustainable performance with corporate perceived growth, the research would like to identify
which technics can investor relations leaders use to stay relevant.

Twenty-three (23) interviews by phone or conducted face-to-face addressed to French and
American financial practitioners and marketers, mostly from technology and luxury listed
companies, were conducted to understand the general role of the investors and the importance
of the sustainability issues facing organizations today. Their insights contributed to enrich the
understanding of the marketing-finance current interface and to provide cases to illustrate the
findings. An example of the questions used to guide the interviews was: Briefly summarize
your investing/marketing strategy? How do you manage your investor relations? For you, what
do you think the most important vehicles are for the delivery of an efficient investment strategy?
What do you think of investing for the future, in a sustainable way? How would you score your
own firm with regards to these dimensions and features? Are you planning (to continue) to
focus on the opportunities for sustainable growth? Is it possible for the customer-oriented
experiences to be translated with shareholders?
In addition to other marketing and financial materials, examining several conference calls and
conference speeches to investors through official online sources like Bloomberg or the Fair
Disclosure from LexisNexis, the legal-information services provider, helped to identify the
investors’ general expectations regarding the large range of possible stock options. This has
been conducted with a sample of forty (40) separate transcripts, audio recordings or videos from
the world’s most sustainable companies according to Corporate Knight, in order to
contextualize the sustainability challenge. Each year, Corporate Knights evaluates businesses
all over the world to determine those getting the most out of their capital and making careful
use of resources. It was rewarding to study the marketing strategies used by corporations which
affirm that putting sustainability first reduces uncertainty and increases competitiveness on a
large range of issues including transparency, resource productivity, social and financial
indicators (including revenue, stock price, EBITDA or even the ratio of CEO compensation to
the average employee’s compensation). It contributed to design a more precise questionnaire
built for specific decision-makers to contrast with the point-of-view of few already-known
actors for the future.!Doing so helped for the identification of the dimensions of the investor
relation experience in the evolving corporate context.
In order to gain a relevant quantitative side for the research, two hundred and thirteen (312)
investor respondents, were asked to explain their thoughts on sustainable efforts made by
companies they could invest in and for. Some were strategic, institutional, or individual

investors. Fifteen different nationalities were represented and a broad number of industries
included. There was a large range of investors types: by age, by gender, by budget, by
investment preferences, and so on. The online survey has been drawn from many sources,
including relations from faculty, alumni and staff from Skema Business School, Ecole Centrale
de Lille, the North Caroline State University. Some investors’ online platforms subscribers or
readers (from dedicated websites, to blogs or Linkedin) and personal connections in
shareholding activities also answered after proactively deciding to take the survey. Even if the
investment community was limited in numbers, it was largely represented and included
representatives from departments of investment in public corporations, pension funds, business
angels organizations, banks, consulting companies, and asset management firms. Responses
from already-known interested sustainable-oriented investors, governmental, and nonprofit
organizations were excluded. This refinement ensured greater homogeneity of the sample. Data
was recorded over a two-month period from June to August 2016. This study aims to link luxury
marketing practices and investor relations to reach a sustainable stakeholder performance and
propose solutions for decision-makers to stay relevant in their corporate purpose. Questions and
results of the survey can be found in Appendix 1.

Findings
Sustainability is becoming the Holy Grail of finance
Surprisingly or not, investors are really concerned about a company’s sustainability
involvement. Even if many outsiders or even related stakeholders from the same ecosystem
believe that independent shareholders (the ones not directly employed by the company) would
never care about the wellness of the non-financial parts of the organization, almost three quarts
(74%) of all respondents would say that they feel more implicated today in the responsible long-
term orientation of their investments than before.!Because eighty-two percent (82%) of the
panel affirm that they look to consider diverse sustainability metrics when making investment
decisions and sixty-one percent (61%) say that they definitely won’t consider to making new
investments in businesses denying sustainability, we can already say that now, a strong majority
of investments include a mission-oriented approach, with those who always used to invest like
that, but now with the changing mindsets about shareholder value. There are different reasons
of investor interest in sustainability according to the interviewees. The fact that influencers such
as Bloomberg, investment mastodons like BlackRock, renown academic researchers or even
the United Nations are promoting the stock financial efficiency of the engaged institution
appeals a large number of prospects. There is an already proven positive correlation between
effective sustainability design processes to strong financial performance. Shares constitute a
market, shareholders are the consumers.
Why should they invest in options which make less and act bad when they have the possibility
to go for other offers proposing a brighter future with a good rate? For example, an executive
from Essilor argued that the shareholder market is meeting a growing demand for data on ethical
or social efforts to design new valuation models and conduct comparative analyses between
companies, without focusing only on the financial ROI basics. The appealing sustainable
financial market is rising but still small which produces an effect of a strong desire from
consumers, or more precisely investors in this case. This constitutes a luxury concept. Interested
individuals don’t physiologically need to be involved in sustainable finance but most of them
express wants for it. The fast-paced society that western individuals mostly live in rejects
fulfilling more than basic needs and shows importance for personal branding. As desire
increases with specificity, there is a demand toward refinement. Purpose-driven luxury, as well
as luxury, is defined in part by refinement, a demonstration of control on subjects in specific

and sophisticated ways. Because luxury goods must demonstrate consistent, wise and durable
work, things that resonate with the ESG major offers, the panel was asked about their personal
potential motivations to responsibly invest for the future. Most of them (66%) said that it was
a great way to answer to a self-actualization want while a few (18%) explained that they would
consider a self-esteem perspective on sustainability. The global corporate manager point-of-
view on investors is outdated. The Maslow need for achievement or respect from others by
making great deals in the stock market is replaced by the needs of morality and commitment as
today's luxuries become tomorrow's necessities (see Figure 3). An investor who already benefits
from great financial products wants to maximize their potential impact from great products to
customized experiences. Investors are becoming luxury consumers worrying about the
environment, desiring production processes to be done in a sustainable way and taking financial
risks in what they see as their personal development and potential opportunities. As a result,
investor relations content should turn into a different business design focusing on experiential
services instead of a transactional press release or quarterly report alone.
!
Figure'3:'The'opportunities'for'luxury'marketers'to'target'their'consumers''selfEactualization'needs'echoes'to'the'
opportunities'for'investor'relations'to'market'sustainability'to'absolute'investors.'The'natural'evolution'of'all'luxury'
concepts'is'from'class'to'mass.'
For example, Tesla Motors’ CEO gave Google co-founders Larry Page and Sergei Brin a test
ride in the early days of his leading sustainable company in order to get investments. Even if it
was a fail and the car wouldn’t drive above 10 miles per hour, the targets invested a little money.
The exclusivity, emotional relation (and not transaction) and luxury transparency pay off with
investors so there is an opportunity to view the stock price offerings through a new lens, to see
beyond the mathematical manifestation of them to the metaphysical meaning that embodies for
the consumer. Actually, most of the surveyed investors believe that companies with a solid

sustainability performance are less of an investment risk than are sources of business value
including a better potential for improved revenue, long-term value creation or innovation
efficiency. The point confirming the investor relations implication is that 94% of investors
recognize that highlighted sustainability performance is a sign of effective management. The
more the relations are cooperative, the more the satisfaction and the company’s and
stakeholders’ financial health will be. A tailor-made marketing that is not only about
communication has to consider the growing necessity of investing in a qualitative approach to
shareholders because they do care about it and the market is going to be competitive soon.
By gaining on attractiveness, the sustainability investment competition is becoming qualitative
Across all types of investors, almost everybody (92%) thinks that the society cares more
about the long-term global impact of the corporate world today than before. This could be
explained by the rising efforts made by leading governments and influential organizations
around the world to highlight the urge of better practices for the prosperity of the world. The
media world is passionate about sustainability, because it is seductive to their customers.
Further data and deep analysis are influencing investors as individuals. Today, only 32% of the
respondents believe that it is impossible to compare two investment options on their
sustainability performance, while it was only possible years ago, to distinguish the good and
the bad ones. As it becomes a global competitive criterion with specific indicators, shareholders
have more options for their differentiation process. A chief financial officer from a semi-
conductor supplier argued, during a conference analyzed in the context of the research, that the
point making a difference for his company with its competitors was that even an investor
looking to invest in this specific appealing industry, would consider the visionary strategy of
the firms.
Because most of these companies are booming their share prices with the exponential growth
of technology, investors are looking for the one that is the most promising for the future and
only a few of them are long-term oriented. The representative considered his company more
futuristic and the metrics were showing that he was right. Investors were highly considering the
point he was making. Integrating ESG indicators into investment models took time in the past
because the entire financial ecosystem wasn’t used to incorporate non-mathematical variables
in their predictive tools but with the proved uncertainty and sometimes danger of their data-

driven decision-making systems, this is slightly changing and some influencing entities are
taking the lead for a change in behaviors. Half (53%) of the respondents imagine that most
companies are pro-actively designing models that estimate the impact of sustainability-related
actions on future benefits when 77% think that they should do it. The investor’s community, in
a crowded capital markets environment, would reward management teams that effectively act
and not just take notice of the trend being shaped. According to the CEO of Starbucks Howard
Schulz, there will be more of sustainable options in the future because many buyers will want
them. As a symbol, Starbucks which is one of the most socially-engaged companies in the
word and which offer special stock options for its employees, has famously turned its
investment meetings into big extravagant productions with star musical performances, surprise
celebrity guests and discussions about social issues of the day.
Because the competition is increasing, a solution is to attract and retain shareholder in being
different and bringing them a new value. Once again, making investors feel special is a luxury
strategy. Luxury exemplify dreams in which products and services are unique, exclusive, and
seductive to exceed the customers’ imagination, not only expectations. Offering emotions is a
way to differentiate an investment from another one because it is highly communicative and it
lasts, even for coffee which, at first, look like a basic product made for waking up and leaving
dreams to join the reality every morning. Luxury is made by emotions to brands which are not
simply selling products. The luxury sector has always grown because more people want a share
of the luxury dream, even exceptionally. The analysis clearly attests that because the world
knows that sustainability is going to be one of the next big turn in global cultures, everybody
would love to take a role to add little value to this movement. 78% of the panel agree that
successful investments in responsible finance are associated with an opportunist access to
dreams in the traditional and about-to-be-disrupted stock exchange market. The idea is good
but investors still fear the implementation: only 23% of investors think that the impressive
growth of good ESG indexes will keep on reaching the ROI rates they are currently making in
the future. Such predictions are probably the result of the Volkswagen diesel emissions scandal
that happened few weeks before the survey. Prior to the event, the company was ranked number
one in automotive on several sustainability rankings.!Investor relations continue to see the
interest of these rankings that are being improved because they involve their companies
reputations that echoes with consumers perceptions, which represents a crucial concern for
investors. No consumers, no business, no shareholder value. Consumers are gained through
qualitative marketing, shareholders as well. The fact that 63% of the respondents believe that

the first interest of corporate executives is the rating lists that investors use to make decisions
in their placement strategies in addition to the statistic revealing that 59% thinks that sustainable
progress activities from companies are more self-centric instead of being globally-oriented
proves that there is an egoistic approach to the tremendous opportunity to generates an entire
set of value through the lens of investing for the future.!Investors like the companies to be listed
on such indexes but they would rather prefer to be directly informed of what the grades mean
in terms of concrete actions. As luxury consumers, they are more looking for details and a
strong personalization of the discussion they could have with their corporate contact. Whereas
a quantitative communication may not be significant, the influential investor potential is
tremendous.
To enable growth, reduce risks and volatility, long-term investments should be specific and
appealing
Like luxury good consumption, sustainable investments is about hedonism and self-
pleasures and using ethics or sustainability as the marketing proposition do not appeal. The
increasing diversity of organizations claiming their presence in the ESG financial marketplace
and the rising number of corporate ratings or metrics could create the reverse of what was
expected by board members. Shareholders could see this trend in finance, when everybody goes
in the same place just like others, with the similar inconsistent approach, as a complete
unappealing development. 81% of the investors interviewed said that sustainability reports of
relevance to business performance should be integrated into fundamental company marketing
instead of separating it to a document addressed yearly to investors. A 2015 study led by Khan,
Serafeim and Yoon covered evidence that sustainability investments create the most
shareholder value when they address specific issues. Through this tailored and specific
approach, 76% of investors agree that sustainability implementations should help to reduce
market volatility and corporate risk because they aim to be long-term and to transform the
market in which they operate. In the current world with ever shorter reaction times, it is tough
for an investor to feel secure about the future and this feeling is underlined with essentially
emotional and therefore volatile shareholder values. Long-term commitment and aspirations to
compete for status are answers from luxury marketing strategies to fix the uncertainty problem.
However, as the issues are taking a global role in the world, actors of the change should realize
that collective action is necessary to protect the interests of the company and society.

Collaboration between stakeholders and even competitors is relevant to be efficient and
appealing. Sustainability is linked to a focus on others and an opportunity to make a difference
in the financial environment is to take the lead by boosting reputation, improving education and
knowledge access on the subject, helping to transform the market to a collaborative visionary
state of mind. Brand and company reputation could be a catalyst for sustainability because
short-termism is deeply criticized and being seen as different, acting as a percussive luxury
company, going beyond standards and expectations would clearly have an impact and add value
to an option. Classical cost-efficient marketing techniques used by mass brands will definitely
classify a company as one of the imitators trying to copy the sustainable leaders. Consistent,
comparable, high-quality data and information are key to ensure sound decision-making by
shareholders. For example, Ferrari’s ambition to compete with luxury-goods brands like
Hermes or Prada has failed and skepticism over the company’s prospects has caused the stock
to tumble about 20 percent in its 6 firsts listing months. Ferrari’s offer is very far away from
the business of luxury or automotive groups like Richemont or BMW and investors are not
invited immediately to see other ways to expand the revenue stream because there are no
emotions sold in their financial marketing approach. Their customer-oriented marketing is
highly seductive but their investor relations are everything else but not luxurious and
sustainable. There is no future seen on it.
Consultative governance standards for the trustworthiness and safety of operating finance have
continually been promoted but in a 2012 study, Warren Wu urges to rethink financial global
indicators by designing new innovative ways to develop and deploy a financial industry that is
sustainable from the opinion of the entire ecosystem because institutions’ maximization of self-
interests led investors to get bored of the sustainable investment options. The volatility that
leads and continues to excite and seduce the global financial environment comes from an
incomplete risk-sharing and an imperfect information-sharing among all financial participants.
However, this appealing but dangerous short-termism conducts to a lack of market liquidity
and credibility. Why this currently encounter issues to be implemented? Because of excuses
like “I don’t know which companies are ethical and which ones are not. Why is it my fault, no
one told me?” The lack of awareness is sometimes influencing in making an educated purchase
decision but the reality appears to be that sustainability is fundamentally too virtuous to be of
interest to any risk-maker.

A professional and prudential behavior from shares providers should, in theory, be able to
perform well while sustaining its stability and competitiveness by seamlessly integrating factors
as openness (by sharing information and positively challenging each other in the markets),
fairness (by promoting market discipline), competitiveness (by delivering worthwhile offers
based on reputation and branding, bringing value) and transparency (by focusing on ethical
deliveries and prudential conducts). These attributes are common with the luxury common
denominators. As a matter of fact, luxury comes from the Latin luxus which refers to freedom,
the absence of constraints, the capacity to reach extremes and to indulge in excesses. The
differences between the high-end sustainability firms and regular stock options are that the
long-term are considering their shareholders as consumers (versus numbers) and individuals
have higher sensitivity. With a competition based on tailored relationships giving the
opportunity for stakeholders to express their concerns and allow them to take a role in the
progress, 67% of the interviewed shareholders feel that investing in creating a positive impact
sometimes resonates with making a tradeoff. Finding engaging ways to convey the relationship
between sustainability and quality and its financial opportunities is the critical next step for
companies as brands trying to shift the idea of sustainability from an improvement in image to
an acceleration in revenue. If an investment was only about money making, on the contrary,
sustainable investments have mostly proved favorable return and reduced-risk compared to the
traditional options. It is the result of a seducing power of sustainability. While most people
applaud the idea of stepping back in order to impact in a responsible way the future, for most
of us, sexiness is not an attribute of sustainability when risky stocks are.!Investor relations
typically market sustainability, when involved and proud of it, in do-the-right-thing terms when
it needs to focus on bringing a real value to investors, in a way that enhances emotion, tells
stories and demonstrates empathy with intelligence. To be honest, most would agree that it is
boring to be constantly repeated on how to live our life. Exclusively designed offers, which
people easily see what is smart the proposal and feel smart for wanting it, have the possibility
of making things desirable, attractive, exciting, memorable and most importantly everlasting.
Once again, the exclusive Tesla Motors produces elegant, powerful and well-finished cars that
are exclusive, luxurious and electric. Because the board and marketing are permissive and do
not promote sustainability as something people must do, Tesla Motors is phenomenally
seductive. The luxury strategy to put brands behind the issue, not the issue behind the brand is
smart because sustainability’s business opportunities are becoming abundant, and to
differentiate themselves brands need to translate it into emotions and experiences. Luxury and
sustainability are intrinsically related and they share a focus on timelessness (they are by nature

durable and long lasting), uniqueness (by actively respecting the specific craftsmanship of
things) and emotional (with strong visions on meanings, purposes and unique moments). As a
result, sustainability can help to specifically generate a financial institution added-value by
deeply defending the interest of the price of exceptional rarity.
Sustainability as a leading luxury brand for shareholders seeking exclusive values
The emergence of consultative frameworks and analytical models is increasing
investors’ interests. However, board members are still implementing little so almost never
marketing their sustainability efforts and this could be explained by the fact that 72% of the
respondents believe that quality is not a guarantee for sustainability. Are sustainable
investments not good or is there lack of transparency and communication? This lack of
communication is meaningful and a reason is that the role of investor relations departments, the
ones which are responsible for communicating important corporate information to investors are
mostly calmed down by their decision-makers when they want to engage a conversation with
investors or other stakeholders about the value of sustainability in their share prices. The
ideation process is just starting for most companies.
The gap between the need of a brand new offer and the apparently resigned state of mind of the
unfulfilled potential buyers is impressive. It is like they already accepted the companies’
directions would hardly make them able to afford a specific sustainable added-value. It shows
a clear failure to communicate when companies have to build trust amongst the financial
community through an exciting and consistent delivery of diversified-in-purpose results to
inspire and wow shareholders of a golden future. Almost every respondents (95%) said that, in
general, investor relations communication could be easily be improved. As previously
mentioned, the fact that sustainability has been associated with unsexy activism for years, very
few investor relations professionals understand its importance and investors seems still
reluctant. From simply being information suppliers, nearly three-fifths (58%) of the financial
supporters interviewed really think that an appropriate conversational marketing could
constitute a real opportunity for stakeholders to develop and market a business with the ultimate
goal of a pure sustainable ecosystem that matters, which goes way beyond the corporate values.
An exclusive way to promote the actions conducted in sustainability is to incorporate
shareholders and stakeholders to stimulate them and animate purposeful and opened

discussions about sustainability. From consumers to shareholders, an organization requires
support to grow so it should carefully listen to the ideas proposed by their related partners
(making them live) expect from sustainability. In other word, investor relations would gain do
tell stories that sound familiar to their audiences. Involvement into the overall corporate strategy
is a must to make the sustainability story credible, not just words and thoughts. A possibility to
achieve this goal would be to consider more visionary investment strategies by setting
sustainability indicators into their competitive financial positioning. If sustainability wants to
lose its image of austerity and constraints, in luxury it can find its desirability. Both luxury
finance and sustainability rely on consumers buying less but better with higher pricing. If either
shareholders and investors do not know the future, they have to imagine optimistically or more
emotionally, dream it. Finance, contextualized in the luxury way of thinking, is not so much
about numbers, it is about emotions and dreams, directions at the heart of the comprehension
of how luxury works among stakeholders. There is definitely a complete shift in the global
approach to business where stakeholders have higher expectations than they usually used to
have in the past. With efficient sustainability investment proposals, decision makers should
design investors journeys allowing their targets to experiment highly rewarding moments all
the way up, treating them as guests. Because fashion luxury brands can no longer rely on having
two big seasons a year to keep their customers’ attention, CFOs should find new tools that are
not reported to entertain and retain investors. Powerful corporations such as Walmart or even
countries like the France or the United States are beginning to give their preference, when a
choice for growth purposes has to be done, to sustainable products, ethical practices and the
entire world is taking notice. A similar trend is disrupting in the investment community, and
because the history is being written, telling stories constitutes a great way to make it happen .
In order to fairly trade, investors should co-design with their partners the sustainable
investment marketplace
There is a wish from individual investors to engage in companies by allowing them to
allocate some of their finances to grow the business. However, the problem is that high-
frequency traders have an unfair advantage, they are dedicated to financial engineering and
sometimes dehumanize any kinds of investments. Investors are looking for a fair, transparent
and ethical place of business that will offer them a choice in the finance industry. While utilizing
the company's existing financial experts team presents clear advantages, there also exists an

opportunity for other forms of co-design with other businesses or even with users themselves.
This approach would have innovative operational distinctions in addition to a unique benefit of
providing customers with a co-designed experience to refine the service performance. The
potential solution could consist in disrupting an entrenched industry by rebuilding a completely
new one, like Uber does in the taxi and more generally transportation industry. The price to pay
for willing investors is to see themselves as the heroes while often being casted as villains, by
refusing to change how to do business sustainably in the face of criticism from the powerful
trading industry. As the concept of connecting and interacting with a customer is becoming
central to relationship marketing, organizations have to support their early sustainable investors
and make the special. It is not surprising that those with interests in maintaining the traditional
practices would seek to block the way new investor behaviors to compete. High-frequency
trading is a current superfast automated trading practice used by large players. The controversy
about it relates to how that intensity gives those having the access to high frequency trading an
unfair advantage over those who don't. Regulation may not be the solution to what is happening
now, because the rules can probably not prevent people using technology to scalp from other
people unnecessarily. To recover the industry, the mission of investor relations is to step up and
do whatever they can to fix the issues encountered by investors that are not institutional, that
do wish to manage their investments, that do not opt for an array of complex order types, and
that do not emphasize speed of returns. In a co-design process, the equity markets should stand
for freedom of choice in order to allow the best investment strategy to determine who can
succeed, as opposed to who can purchase the fastest data and technology. Creating a common
thread for the sustainable investor community on the platform to share enables its members to
feel connected and be part of the group, they are encouraged to share their stories and progresses
collaboratively. To create a platform for the community to share their own stories, investor
relations brand narratives have to create storytelling encompassing the characteristics
customers might look for. Comparatively, in response to the rising consumer demand for
sustainable luxury, luxury marketers have to provide superior environmental and social
performance has to be reflected throughout the luxury value, in combination with the individual
weighing of certain luxury value factors. Organizations should co-create exclusive services to
their stakeholders, making each one of them a prince for a short while through customer
relationship management of luxury brand, making a key difference with mass stock markets or
premium brands.

The financial industry is facing unprecedented challenges that are changing both the shape of
the market and the expectations of how it should operate. Shareholders have every right to know
how company resources are being expended to protect the company’s future and shareholder
value Investors are looking for more than just efficient financial products and that represent as
much an opportunity as a problem if well managed because the companies now have a chance
to demonstrate it takes seriously the concerns of stakeholders that the traditional stock market
does not guarantee fair trading. With modern technological tools, markets can become more
open and transparent by providing information in real time and democratizing access to the
market. In order to continue to gain the motivation of market makers to provide liquidity, there
is a great opportunity for organizations to co-design new sustainable standards that fits both
investors and institutions, through a consultative process. Taken as a whole, the results of the
survey suggest a widespread sentiment in the market that change is needed with 78% agreed
with the idea of settling a global code of conduct to face new challenges like increased liquidity,
electronification, and complexity. By many measures, the current system is incredibly efficient.
However, taken as a whole, the sustainable implications could be substantial and more than just
a product-oriented transaction is expected by the audience. By incorporating customer
emotional attachment as an antecedent of brand loyalty, companies could attain a financial
sustainable customer-brand relationship in the long term. In the transition from humans to
computers, the natural sustainability human processing has been abandoned for high-frequency
decision making. The request for investors is to restore people's faith that there are people on
trading places working in their best interests. Investors who perceive high symbolic, economic
and functional values for options are more likely develop a positive relationship with the
companies according to 82% of the investors surveyed. Thus, marketers to investors who
noticed the benefits of uniqueness when it comes to new business models suggested by the few
first ones, should concentrate their resources on creating and delivering these exclusive values
to customers. Instead of focusing on the communication and presentation of the user-designed
investment products that is the result of co-creation, managers should plan to increase the
number of participants in co-creating the future of finance, to stay on top of the tailor-made,
like luxury brands. Financial audience engagement is dependent on multi-faced benefits and
needs to be considered at the earliest stages of designing product and service. It should be
moved up in the product development process and it can no longer be thought of as a
development stage practice that improves performance and makes the product look attractive.

In the last days of August 2016, America opened to the public a new stock exchange to tackle
high-frequency traders allowed at Nasdaq or New York Stock Exchange for example. The IEX
stock exchange promises a fair simple and transparent market dedicated to investor protection,
competition and innovation, by delivering robust, efficient service to both retail and
institutional investors.!The most novel and controversial feature of the IEX exchange is based
on a speed regulation that would slow down trading to discourage traders that rely only on
speed with computers that can buy and sell stocks in nanoseconds. Inspired by traders criticizing
the automated trading, the project faced a lot of critics but with the support received from the
investor community, but finally get the authorization to launch a market that slows the pace of
trading by the American Securities and Exchange Commission. The philosophy to give all
investors an equal opportunity to choose between options includes the power to design, test,
optimize and custom strategies for futures markets. A professional marketer from the Paris’
stock exchange confirmed the interests of the real financial community in such new platforms
that answers to self-directed luxurious behaviors of investors requiring empowerment,
transparency and fairness. Time is central to both luxury and financial markets. The joy to buy
a luxury item is diversified along the time continuum. Like Rolex watches have spent a very
long time building an enviable reputation and name, sustainable investments could be similar
to return their investments by presenting timeless values that convey a sense of strength and
everlasting attractiveness. The ability of the luxury to stay very special, by generating envy, by
remaining alive and active, original through time is a differentiation point. Unlike fashion which
captures the spirit of the times and then goes, luxury resists the volatile effects of time and
always prove its actuality. For sustainable investments, this value creation is highly applicable
and the only relevant metric is the shareholder’s satisfaction, meaning that it investor relations
would really like to make their voice heard in order to co-design a solution that answers their
requests. The capability to overcome the traditional tradeoffs among costs, quality and time
have become a must (See figure 4).!Self-determination applications provide marketers with a
useful way of conceptualizing consumers’ needs and motivations, and therefore influencing
their behavior. Investors have to come to identify with the value-adding qualities of a particular
share, and so are internally motivated to make that placement part of their lifestyle. Financial
officers should get into the habit of spending more time with their customers, and ideally meet
them in their own environment.

!
Figure'4:'The'shareholder'model’s'traditional'shortEsightedness'is'progressively'shifting'to'a'stakeholder'model'because'of'the'
changing'economic'environment'requiring'sustainability

Conclusion
An organization generally targets at attaining economic prosperity and responsible
quality. No business can sustain without profit and according to Michael E. Porter, new entrants
to business, power of buyers, and power of suppliers, substitutes and rivalry among the
competitors directly or indirectly influence the degree of profitability of a business. However,
this study proves that investors also believe that no business can prosper sustainably by ignoring
the interest of the stakeholders.
The very visible and influential luxury sector has traditionally led the way in defining trends
because of its high profile consumers, celebrities making it ideally placed to lead the way in
raising awareness and understanding of the issues and driving behavioral change. Many brands
are currently working to develop their relation strategies to connect better with the new
consumer’s insights and should also adapt their design thinking capabilities in investor
relations.
Here is my general thought on the sustainable approach to investor relations with a proposition
about the luxury strategy to maximize the efficiency: as major corporations refine their models
and prove the value of sustainability (including amongst others Adidas, Tesla, Apple,
Facebook, BMW, LVMH, McDonalds, Walmart, Google, Coca Cola Enterprises, Kering or
Schneider Electric), investor relations managers may do for their shareholders what luxury
companies are doing for their consumers (or co-designer which seems more appropriate
because they dialogue with them and not only propose offers), they should shift stock price
orientation to a stakeholder-oriented marketing state of mind. Sustainability may be
questionable, but, in comparison, few would have thought 40 years ago that IT would become
a tool of exponential growth for the entire world. Executives across all industries should take
action about sustainability which could become an entire area of differentiation because, at the
end, the dominance of the stock price mentality blinds us to the entire range of other things
business should intrinsically focus on, from the quality of what they offer, their stakeholder
satisfaction, and creating long-term societal and market value. When we know that human
beings do not live to eat, we can easily agree that corporations do not work just to make a
profit. To special investors who seek to share and invest more than just money, corporations
should allow them to make it possible and attract them. The role of luxury branding in the
investment strategy is to start a conversation and to create desire by making something good

sexy. The degree of emotional closeness that humans feel towards a brand, rather than
assessment of its features, will determine which brand or financial option they select.
Using recent insights from the luxury marketing, financial, and investor management literature,
this paper provides evidence that shareholders care more about sustainability issues than many
financial corporate managers believe. While there is a long line of literature devoted to these
incentives, this research paper directly examine how investors could be reached to increase their
value perception. Prior research has demonstrated evidence regarding the consequences of
equity-based incentives. The current results indicate that shareholders are also interested in
investing for the future and not only for the wealth maximization. Most of the corporate
decision-makers interviewed were asking themselves: Do we communicate effectively? Why
are we valued this way? How can a better marketing (and not only communication) impact our
valuation? The results indirectly confirm the crucial role of the marketing discipline in
managing investor relations in order to impact, and suggests a more tailored and visionary
marketing approach. It seems clear that luxury has its role to play as the practice of marketing
evolves, as the influence of marketing increases within organizations, and as the need for a
greater integration becomes strategic. The analysis supports that the luxury marketing
strategies in investor relations could develop the sustainable finance market for organizations.
Also, the findings support prior research that shareholders are emotional and globally aware in
their monitoring role (Ertimur, Ferri and Muslu, 2010): they actually would love to make their
voice heard in the design and administration of business strategies to stakeholders, including
themselves, by using their vote for example.
Managers and decision-makers should go for a stronger focus on actively managing investor
relationships using marketing (and not only market-based) insights. Since the research argues
a high request of sustainability from the financial supporters in building awareness of the
challenges, identifying and analyzing issues to ensure an alignment, investing in measurable
outcomes, strategizing tangible long-term-oriented programs, incorporating the sustainability
strategy into the overall corporation and engaging an open-discussion with investors and other
stakeholders, to address the challenges, managers may consider and concentrate on managing
these factors in investor relations, even if, obviously there is no unique solution to meet and
surpass the expectations of the current and potential investors. Policymakers and regulators
should influence investment returns based on the corporate sustainability of the securities
issuer. Traditional shareholders’ meetings might be a concrete and purposeful way to express a

collaborative relationship orientation, while in the meantime, trust and commitment can be
developed in the course of these interactions. A first contact, arguing that the most renown
investment firms are demonstrating attention to non-financial material issues which can
produce favorable returns for investors, may be a great way to start the discussion. By providing
transparent information and analysis that helps investors develop a well-rounded understanding
of the company and its strategies, an organization can achieve a fair market valuation, create a
body of supporting investor and a climate of favorable opinion. The result promises to be a
respectful investor structure that gives the ability to approach to exercise with confidence.
Ultimately, this will continue to be reflected in the global demand. The competition between
investment options will be marketing-oriented. By underscoring what makes a difference, how
an offer is set apart and why the investor relations are proactively ensuring that the strategy, the
corporate governance and the shareholder value are aligned, an unfair advantage could be
reached, with a detail-oriented luxury style. It is crucial that the long-term component is being
introduced as a small part in a larger story which both humanizes the brand and brings the
consumer closer to its involvement and the cause, to reach higher aspirations and have
redistribution effects.

Discussion
Because this study contains several limitations, it provides interesting opportunities for
further research. The methodology used for this research remains an imperfect method of
measuring corporate sustainability performance and develop solutions to it. The deliberate
approach on using data on a range of indicators that have been linked to luxury, finance and
sustainability through research and analysis should be balanced. There must be other ways to
improve the concepts designed here. However, it is important to highlight the nature of the
research conducted primarily to prove the hypothesis made about the luxury possibilities in
sustainable investor relations and to confirm the guidelines from the academic literature.
Individual interviews and analysis, combined with quantitative measurements allowed
describing some possible investors’ profiles, which are simply meant to suggest to companies’
boards some alternatives paths with luxury strategies to manage their ecosystems, shareholders
included. In order to gain a more precise model to engage the financial supporters for the long-
term, further research is necessary, eventually with more investors, from different markets, with
even more different values, to reach statistical significance of results. The promising luxury
strategies that seem to be relevant, could also be challenged. As sustainable view in finance is
a recent topic becoming a global trend, adaptations and flexibility could be interesting to obtain
a more precise idea about specific areas of the coming market.
As sustainability indices keep on growing because the reasons why of long-term visions for
corporations are becoming evident even if sometimes misused during the last decades, investors
need to define what they expect from sustainability. The luxury marketing strategies, currently
going mainstream in different industries, from coffee with Starbucks to electronics with Apple,
seems to be the current most efficient ways to promote a solution to these unrevealed needs of
investors. This kind of long-term-oriented paths are beginning to give preferred shelf space to
sustainable products, and both partners and customers are taking notice. A similar trend is
influencing in the investment community. A stringent review of the expectations is critical in
order to detect and design sustainability investments developing value with a purpose. A talk
to investors about sustainability with companies would be a great way to develop the complete
sustainable finance strategies for investor relations decision makers and policy makers. The
old-fashioned financially-optimized shareholder value is currently being rethought and has to
be adapted in order to stay relevant and sustainable. To this end, any truly meaningful attempt
to reform this traditional corporate governance mechanism must lead to a complete makeover

of the current capital-market-based system which has been designed and makes people live for
decades now. Because today, most of the collective interests of shareholders are systematically
given precedence over the interests of other stakeholders in the event of a conflict , the entire
culture of business has to change. Despite sustainability’s importance, many businesses have
yet to design from scratch the foundation needed for it to have a significant business impact. A
challenge to address is to design seamless and ethical decision-making systems which
encourage engagement from both the financial and human entities from all the various
stakeholders. Protecting the interest of investors not only in their role of investors but also as
customers, employees, and globally human beings is a possibility. Because we can assimilate
investors to luxury consumers for organizations, it is direct to say that they need optimized and
tailored offers instead of a full power of decision in order to maximize the global benefits of a
complete ecosystem. Actually, the shareholder capitalism is a product of the human collective
civic design. A way to help the things change would be to make academics and policymakers
coordinate their energies in the direction of sustainable growth. If any stakeholders of an
ecosystem would feel being special, it would probably help corporations to implement more
global strategies serving the interests of everybody and not only the shareholders’ finances. An
attractive opportunity of new research could be to relate changes in investor relations
management quality through the sustainable approach with luxury directly to shareholder value
creation by measuring investor response. Besides, it could be an excellent development
opportunity to challenge the hypothesis that a company high-performing in the investor
relations management quality is positively correlated with increased stakeholder value and not
just shareholders.

Appendix
Appendix 1: Investor relations survey
What is your gender?
Male 73%
Female 37%
What is your age?
0-20 1%
20-40 54%
40-60 36%
60-80 8%
80-100 1%
Which of the following best describes the organization where you are working?
Public corporation 38%
Pension fund 4%
Business angel organization 4%
Bank 8%
Consulting company 2%
Asset management firm 12%
Academia 3%
Government 5%
Non-profit 3%
Personal 10%
Other 11%
Where are you from?
Northern America 32%
Southern America 8%
Europe 39%
Africa 3%
Middle East 4%
Asia 13%
Other 1%

Which of the following best describes your current position?
Board member 21%
Executive 17%
Manager 24%
Employee 32%
Other 6%
Do you agree that companies should focus on maximizing shareholder value?
Yes 54%
No 46%
Do you agree that a company’s good sustainability performance is important for
investors when making investment decisions?
Yes 69%
No 31%
Do you agree that good sustainability performance matters more to investors today
compared to before?
Yes 74%
No 26%
Do you agree that good sustainability performance matters more to the society today
compared to before?
Yes 92%
No 8%
Do you think good sustainability performance influence investors’ decisions to buy a
company's shares?
Yes 42%
No 58%
Would you consider to make new investments in businesses denying sustainability?
Yes 39%
No 61%

Do you care more when a company has a good sustainability performance or a poor
sustainability performance, other things being equal?
Good 42%
No difference 44%
Poor 14%
Do you consider a diverse company’s metrics in sustainability, when making
investment decisions?
Yes 82%
No 18%
Do you think that sustainability metrics are a great way to answer to self-actualization
or self-esteem wants for investors?
Self-actualization 66%
Self-esteem 18%
Other 16%
Do you agree that successful investments in responsible finance is associated to an
opportunist access to dreams?
Yes 78%
No 22%
Do you believe that it is possible to compare two investment options on their
sustainability performance?
Yes 68%
No 32%
Do you think that the rise of ESG indexes will continue to sustain the great ROI rates
currently made by sustainable investments?
Yes 77%
No 23%
Do you believe that the first interest of corporate executives is the sustainable rating
lists?
Yes 63%
No 37%

Investor relations: a luxury marketing strategy - Emeric Delalandre

Investor relations: a luxury marketing strategy - Emeric Delalandre

Recommended

Recommended

More Related Content

Similar to Investor relations: a luxury marketing strategy - Emeric Delalandre

Similar to Investor relations: a luxury marketing strategy - Emeric Delalandre (20)

Recently uploaded

Recently uploaded (20)

Investor relations: a luxury marketing strategy - Emeric Delalandre