Attracting and Selling the High Net Worth Consumer
I’m sure everyone has heard the old adage; “fish where the fish are”. Today, I’m suggesting going after the whales rather than the fish!
Globally, the top 1% of the population owns over 40% of the worlds assets. Expand this to the top 2% and you’re over 50% of all assets. The top 1% accounts for such enormous wealth that it’s now broken up into two categories; Ultra High Net Worth and High Net Worth. The Ultra group has “investment” assets that exceed 30 million dollars. This doesn’t include their primary residence. The High group only has over a modest one million dollars in investment assets.
For those of you that don’t make the cut, perhaps you are still feeling the effects of the global recession. While you still represent a significant, but shrinking, percentage of all assets and/or disposable income, your purchase patterns are more reserved.
You, as a buying group, have replaced “want” with “need”. Thus, as a business owner, where would you want to invest your limited resources (financial, human or otherwise)? Most companies attempting to appeal to the luxury consumer are actually targeting the upper middle class consumer. Unfortunately, the brand position and message doesn’t translate to the true luxury consumer. They’re not properly communicating the appropriate story to help inspire a luxury consumer to purchase their products or services.
The luxury consumer considers themselves a connoisseur of the luxury goods they own. When he/she contemplates purchasing a new product category, the purchase process requires a balanced approach that communicates the “story” of the brand and educates them about the respective products. You should act as a resource or consultant versus a traditional salesperson; it will pay off in the long term. These consumers expect to receive “white glove” service throughout the purchase process, desire or expect it to be exclusive or private and expect the product to have superior value. Key to your continued success is exceeding their expectations. You need to engrain this philosophy into your entire staff in every capacity; no matter what roles they may have. What you’re proposing to your clients should also help make their lives easier, enhance their leisure time and be long lasting. Ever read the Patek Philippe tag line? “You don’t own a Patek Philippe watch, you just pass it onto the next generation”. This tag line succinctly reflects who they are.
I once had a lunch meeting with the CEO of one of the world’s largest conglomerates of luxury brands. In our discussion he stated that when selling the luxury consumer you need to properly communicate a “story” (i.e. talk about the brand’s history and culture), why they “need” the product (justify or rationalize the purchase) and give a sense of “value”.
Note that value is not directly related to price. A Porsche isn’t an inexpensive car but offers greater value as compared to a Ferrari or Bugatti; while the latter two brands could potentially offer value on the basis of their investment proposition. These three selling components are key to selling high net worth consumers.
It is also critical to communicate to those people or companies that influence luxury consumers. These could be the consumer’s architect, designer or mentor. Remember, that after TV, magazine and newspaper ads, the number one research tool by this group is the web. Two thirds of their purchase research is done online. Therefore, your entire web presentation needs to appropriately communicate your services and products to this group. Writing about story, history and culture is applicable to both integrators and vendor products.
Other ways of communicating to this group is through their interests and social activities. High net worth consumers tend to be involved in charitable, community and civic groups. Find ways to cross promote with these groups. The same would be true with other luxury goods and services they purchase. Look around your community to see what other companies or organizations are catering to these consumers.
There is a jewelry retailer in a suburb of Boston who is considered one of the most successful independent jewelry stores in the country. While located in an affluent community, the town only has a population of 30,000 residents. He completely understands the luxury mindset, are consumer centric in every regard, cross promote in many creative ways and aren’t adverse with investing in these activities. The result is that he’s become a “destination” store where clients come from all over the New England area to shop. His events are so successful that legacy and new clients look forward to attending. Their invitations resemble those used for special occasions. He invests heavily in these events (whether in-store or at high end venues); he serves fine and rare wines, food prepared by top local chefs and gift bags with items that you want to keep as compared to trashing after the event. His return on investment is enormous.
Compare this to some of the events you might have had (sorry pigs in a blanket and beer don’t cut it!). The point is, know your targeted audience, cater to their tastes, needs and exceed their expectations. It’s a good investment in money, time and effort. Also, as mentioned, good CRM is critical. This jeweler’s database includes birthday and anniversary dates, brand, style color preferences, and sizes (how many guys know their spouse’s ring size). Thus, his selling and communications are all highly targeted. This IT investment has an enormous ROI.
As I said earlier, fish where the fish are but also use the right bait; you might just catch a whale. Good luck in your selling. •