Surprising research shows that consumers with the most spending power have the least brand-loyal buying habits. Four ways to engage the new upper crust
Looking to woo the affluent? According to a survey conducted last fall by the Harrison Group and American Express swanky suites at equestrian events sponsorships of sailing competitions and après ski lounges may be off the mark.
“Most marketers think that wealthy people are kind of like that nasty old rich guy on ‘The Simpsons’ and that they’re real brand snobs ” says Jim Taylor vice chairman of the Harrison Group. “In fact they’re children of the middle class who are learning how to spend money effectively so they approach it with the same process they approach spending money in their business: carefully patiently and thoughtfully.”
Taylor’s inaugural Survey of Affluence and Wealth in America polled 1 300 people via the Internet and revealed that just eight percent of those with discretionary household incomes (money available after spending on essentials like food and shelter) above $125 000 inherited their wealth. The other 92 percent earned it. This majority with a middle-class mindset shops for brands and products based on values learned from modest upbringings which is quite different than their old-money counterparts.
Taylor breaks the affluent into two categories: passion shoppers and logic shoppers.
Passion shoppers are traditional luxury shoppers who have their interests piqued by marketing and advertising then are driven by a brand promise to shop retail. “They choose brands under the belief that the brand will assure a certain level of quality and performance ” Taylor says.
Logic shoppers get aroused the same way but then skip the beeline to retail and begin the process of comparison-shopping instead. They hunt down products on both brand and discount web sites to compare prices and to determine whether or not incremental cost bears incremental value.
“The passion shopper says ‘I’m looking for a great pen to give as a gift so I’ll go to Cartier ’” says Taylor. “In that case the brand serves up the product merits. In the logic shopper’s case they go looking for the product and then find their way to the brand.”
What to do when you can’t rely on the brand’s upscale reputation to steer affluent shoppers your way? Taylor offers four research-backed insights that can help strike the right chord with the guy in the Porsche who’s secretly sporting a middle-class work ethic:
Build On Pre-Event Touchpoints
Because high-income consumers now use the web and other media channels to determine the value of products before they buy they have highly informed expectations about your brand promise before they ever step foot into your event space. Leverage the web and other marketing touchpoints to frame their expectations positively and they will have a positive experience says Taylor. “[For marketers] the question should be how do they find you not how do you find them ” he says.
Tap Into The Feel Good
The number one driver of event attendance for the wealthy is substantial discounts on fresh merchandise of twenty-five percent or more. But coming in at a close number two is a charitable connection. “They don’t care if you introduce them to celebrities or sports stars ” says Taylor. “They can pretty much afford that on their own.” What they do care about is that the event be fun meaningful and reflect their values. Does that mean you have to ditch the polo sponsorship? No. Just mellow out the “in-your-face snob thing ” Taylor says.
Exploit The Love Of Learning
Every time logic shoppers shop in a new luxury category—high-end jewelry fashion antiques—they have to educate themselves on the value of the luxury items they didn’t grow up with. Are they reluctant to show what they don’t know? No says Taylor. In fact events with an educational twist actually increase the perceived value of the brand. To leverage this quest for knowledge Taylor suggests creating “open-collar” learning opportunities like a food and wine event (see below for more) that offers hands-on cooking instruction. “It doesn’t have to be deliberately didactic or instructive but if you do an event that teaches them something then the value of that event rises accordingly ” Taylor says.
Keep It Casual
Design event experiences that are special but not pretentious. Most affluent consumers attending a golf event for example are likely to have grown up in a household where golf was a major privilege. You don’t want it to stop being a privilege but you do want it to feel like something that’s part of their hard-earned and well-deserved lifestyle. To do that think understated. Over-the-top excess is a challenge to middle-class values and an instant turn-off. “These consumers cannot handle the perception that they’re arrogant or self indulgent ” Taylor says.
Photo Credit: unsplash.com/@perloov