If you have ever sipped a Nespresso coffee you have witnessed the marketing savvy of Massimiliano Pogliani.
Now the former DJ and gadget enthusiast is looking to lead Vertu to even more connections. Recently he talked with Elite Traveler Editor-in-Chief Douglas Gollan during a New York stopover at the Mandarin Oriental Hotel
ET: Let’s start with background of Vertu. Where did it begin and how did it end up where it is today?
Massimiliano Pogliani: Vertu is a luxury mobile phone company that was created about 12-13 years ago. About 15 years ago Nokia launched their luxury division, which we were the face of, and a few years later, in 2001, our first phone came out. Since then, we have been leading the luxury mobile phone market. We are based in the United Kingdom 43 miles from London, near Rolls-Royce, and we manufacture all our phones there. We have our marketing, sales, engineering and software teams based there, as well as our regional offices in the United States, China, Russia, France, Germany and more.
ET: And now you have spun off from Nokia and are launching new technology?
Massimiliano Pogliani: We are here to launch the Vertu TI, our first smartphone powered by Android technology, which was made possible after our separation from Nokia. We had been with Nokia since the beginning and last year they sold Vertu to a private equity group called EQT, based in Sweden. For Nokia, we were no longer relevant for their business model because they were moving in a different direction. We had always been separate from them, anyway, so had our own facilities and production line, but we were linked in a corporate structure that didn’t allow us to make certain choices, such as the decision to go with Android.
ET: And the separation led to the new technology and other changes?
Massimiliano Pogliani: We have chosen Android because, since we are sold all over the world, we wanted a system with a larger coverage base and a simple and intuitive interface because we are combining technology and luxury, and technology and luxury should make your life easier not more complicated. The system is also very well tested and works fine with all the applications. It’s been good to be independent because now we can expand the brand in terms of both product and geography. We now have greater freedom to choose components and technology to support growth into other markets, such as South America, where we believe there is a lot of opportunity. Overall, it’s an advantage for us.
ET: What differences can customers expect between Vertu TI and your older product line?
Massimiliano Pogliani: For people who are familiar with the brand, the Vertu TI is just the natural evolution of our voice-centric phone, which was our best-seller in that category. In terms of design, the Vertu TI is similar to that phone except now it’s not just a nice housing, it’s also a smartphone. The phone also includes Vertu’s embedded services, such as our Concierge, available for you 24 hours a day, seven days a week, in seven languages no matter where you are. You can call and talk to a human being, not a robot, and the more you use them the better they get to know your tastes and preferences, thus providing advice linked more directly to your personality. We also have our Privilege service, which pushes offers to our customers based on things such as preference and location. For example, my phone sees that I’m in New York City so it downloads one of our New York City-based Privileges, a twice-a-year pass to the private membership Core Club. We do this partnership with clubs all over the world—Bangkok, Beijing, Dubai, Geneva, Istanbul and more. We have these Privileges available almost everywhere our customers are located.
ET: Are there other services for customers?
Massimiliano Pogliani: We also have special partnerships with restaurants and exhibitions—such as an opportunity to attend the Oscar’s ceremony this year—and what you receive and do all depends on what your interests are. You select art or fashion on your profile and that’s what will be sent to you. The Privilege system also feeds you content about the topics that you like so you can stay on top of the things you are interested in. We use a combination of third-party and in-house teams to bring this service to our customers, with services executed by a third-party but driven by our own in-house team. What is available to our customers also depends on their service level and usage, as there are plans that provide personal concierges and more.
ET: Do all the new phones utilize the Android technology?
Massimiliano Pogliani: On all the new phones, yes, but the old line is still available, so if you only want a voice-centric phone, or the Constellation Touch, you can still get those, with all the services, for a lower price point. The price for the Vertu TI is $9,600 for the titanium and black leather, $11,500 for the titanium and PVD, $12,800 for the titanium alligator and $19,900 for the black PVD and red gold.
ET: Vertu was the pioneer of the luxury phone market. What is the driving concept behind the brand?
Massimiliano Pogliani: The luxury phone category is one that we created 10-15 years ago and we have continued to lead ever since. In the minds of our customers, Vertu is the luxury mobile phone. We have some competitors – though, honestly, we would like to have more. Some luxury brands have entered the market, such as Dior and Tag Heuer, but they have done nothing comparable as it is an extension of their brand’s range. We have been producing phones since the beginning so it is our single, core focus. Others have followed us into this category, but in terms of units sold it’s not even comparable. To date, we have about 320,000 people using Vertu devices, representing about 90% of the luxury mobile phone market.
ET: What is your personal background?
Massimiliano Pogliani: I arrived at Vertu about three months ago with the new ownership who wanted to place an emphasis on both the product and the marketing. They wanted to drive the company forward with a product-oriented approach that wasn’t afraid to get out there and see what the market opportunities were. Before that I was at Nestlé for ten years where, while working for their premium brands such as Nespresso, gave me experience in developing premium products out of ordinary goods, in this case coffee. I did this for a variety of brands in the Nestlé portfolio and it helped me cultivate a specific mindset and set of skills you don’t get when you work with mainstream brands. I’m not saying that mainstream products are good or bad either—I consume a lot of them, from cereal to yogurt and so on—but premium products require a more personal involvement. If you don’t like premium items—if you think it’s crazy to spend that much money on a watch, or tie, or cufflink—then you won’t understand the customer and won’t be able to sell to that market. Having done this in food and beverage, I then asked myself if I could apply the same approach to real luxury goods, which brought me to Vertu. Over the next ten years I have a chance to be part of the brand and its history and this is what motivates me as an individual. It happened this way at Nespresso as well. When I arrived in 2002-2003 my friends would say “Nestlé? Nespresso? Do you mean chocolates?”
ET: When you’re not working, do you have any hobbies or interests you are passionate about?
Massimiliano Pogliani: I’m passionate about technology. I have all the latest gadgets, my house is fully connected – we have technology everywhere. I also like music and films. Before I started university I was making money as a DJ and I still have my collection of vinyls, CDs, and, now, over 25,000 songs on my computer, all arranged with their correct text and cover art. I’m a bit manic about that. I have very little time, as life and work blend together, but when I do have time I like to ski in the Swiss Alps because I live in Switzerland. I travel a lot for work and, if I have time, I like to stop wherever I am for a day or two. Last year was the first time I came to New York just for vacation, taking a week just to do nothing and enjoy what the city had to offer. Traveling for work and fun at the same time, however, is something I enjoy.
ET: As a business, where do you see Vertu in five years?
Massimiliano Pogliani: I believe that while the mobile phone will continue to evolve and change there will always be a need for a mobile phone, almost more than anything else. Even if you’re running late, you will still go back home if you forgot your phone, wallet or important documents. In the future your wallet and documents will probably exist within your phone. People need a device that allows them to stay connected and communicate so there will probably always be the need for a mobile phone in the future. There will always be people who don’t want the same phone as everyone—just as I don’t want the same watch or shoes or ties—which is what Vertu will continue to provide. Whatever technology offers in five years time is what we will put into our phone, but attention to detail, design and service will always define us. Ultimately, we just have to wait and see what our customer needs in five years time.
ET: Tag Heuer, Dior and Louis Vuitton have all branched out of their original luxury categories. Does Vertu have any plans to do something similar in the near future?
Massimiliano Pogliani: For the time being I believe the potential of our market is still huge, but why not? We wouldn’t rule out extensions as long as they are close to our core business. We aren’t going to launch perfumes or anything like that because I believe you need to be credible in your own category before extending the brand to others. We believe there are still a lot of things to do in our category so I’m not anticipating any major extensions. Probably some accessories linked to the phone, but there probably won’t be any extensions to new categories in the near future.
ET: A lot of luxury brands, such as Breitling and Bentley, have entered partnerships in the past few years. Is Vertu also involved in this trend?
Massimiliano Pogliani: We have had a partnership with Ferrari for five years and will be a launching a Ferrari special edition of the Vertu TI featuring carbon fiber and special software linked to the telemetry of the car. We are also working with Bang & Olufsen. For this new phone our sound engineer worked with Bang & Olufsen’s sound engineer to create the sound system for the Vertu TI’s speaker and headphone outputs. We also have a special active noise cancellation system to make sure that the voice you hear is never distorted. Since we have great sound, we have also integrated great ringtones performed by the London Symphony Orchestra into the phone, which is a nice plus. Of course you can also use your own music as a ringtone, all of which can be kept on the phone’s 60GB storage drive. These phones, as well our basic line, are available at our three U.S. boutiques, located in New York, Las Vegas and Beverly Hills. The New York boutique will to move to Madison Avenue this year and we will expand into Asia to accompany our new flagship which opened in Moscow last year.