The key insights from Luxury Society Keynote in NYC, investigating how best to find, attract, retain and serve Ultra High Net Worth consumers of luxury.
What is an UHNW Individual?
An ultra high net worth individual has a net worth of US $30 million and above, after accounting for shares in public and private companies, residential and investment properties, art collections, planes, cash and other assets.
The number of UHNW individuals is growing across the world, both in net worth and population, according to Wealth X. The population is now estimated at 187,380 households, with a combined net worth of $25.8 trillion.
In the next five years, Wealth-X forecasts that the world’s UHNW population will grow by an annual average of 3.9% and the wealth attributable to the UHNW population is expected to grow by 5.5%.
“ UHNW population is now estimated at 187,380 households, with a combined net worth of $25.8 trillion ”
Who are brands really dealing with?
Not always the UHNWI himself or herself, according to wealth expert Russ Alan Prince. Prince stressed the need for brands to understand that wealthy people remain wealthy by working hard, and are resultantly time poor and often surrounded by staff and advisors.
Prince remains unconvinced that UHNWI’s have the time to read the glossy magazines that luxury brands pay so dearly to advertise in, or to subscribe to brand news on social media like Facebook or Twitter.
Instead he emphasized the importance of understanding the advisors and entourage surrounding the UHNW individual, and ensuring that marketing strategies are tailored to reach both the individual and their staff.
“These advisors can kill your message,” he explained. “They can undo all the good work a brand does with an individual in an instant.”
Doug Gollan and Russ Alan Prince
How can brands reach UHNWI’s?
Through word-of-mouth and affiliate marketing according to our first panel discussion, with a distinct focus on identifying and targeting key influencers. Trusted recommendations were described as the holy grail of UHNW marketing and a key strategy in attracting new UHNW clientele.
Henri Barguirdjian, President & CEO, Graff Diamonds, Americas, championed the need to create outstanding experiences and deliver exceptional service, in order to surprise and delight UHNW clients.
Barguirdjian believes that giving existing UHNW clientele outstanding touchpoints with the brand will in turn inspire the sharing of these stories within their (similarly affluent) circle of friends.
The panel also agreed that partner marketing was a powerful tool in expanding one’s presence within a limited pool of potential UHNW consumers.
Meredith Dichter, Global Brand Marketing Director, Luxury Collection Hotels spoke specifically about events and partnerships that Starwood have developed with Net Jets and Bentley Motors, which reinforces brand positioning and allows various brands to share – and reward – top clients.
“ Clients will always remember a negative experience no matter how many positive moments have been shared ”
How can brands serve the UHNWI?
Effectively with holistic customer experiences, which demonstrate both knowledge of the brand and category, alongside an understanding of the customer and their desires.
Clients will always remember a negative experience no matter how many positive moments have been shared, explained Andrea Soriani, Director of Marketing, Maserati North America.
But too often brands get carried away with developing exceptional events and money-can’t-buy opportunities for clients, whilst forgetting the need for flawless service at the most basic of levels. “Get it right” Soriani decreed, “You will only have one opportunity.”
Ricky Sitomer, CEO, Blue Star Jets, had similar sentiments. In the aviation industry, he explained, it is often a case of simply listening to what the client wants and delivering, without making any assumptions as to what the brand or provider may think is best for them.
“ At the UHNW level individuals have the spending power to make whatever they want happen ”
At the UHNW level individuals have the spending power to make whatever they want happen. They are not thinking about minimizing costs in the same way other consumers may. So often good service is giving them exactly whatever that it, regardless as to whether or not it seems overly expensive or illogical.
Hortense Bernard, General Manager, Millésima USA, confirmed that the easiest way for her to lose clients was a lack of knowledge. “To sell a Maserati you need to know what it is like to drive a Maserati,” she explained. “It’s no different in the case of wine. Our clients know just as much as we do so there is no faking it.”
“You need to understand whether you are dealing with a businessman who wants a champagne and caviar, or a rapper who wants White Castle and Bourbon” finished Sitomer, highlighting the need above all for understanding the client. “And then you need to deliver beyond their expectations.”
Ted Moncreiff, Laurent Vernhes, Caroline Brown, Maximillian Büsser
6 Key Conclusions
Avoid the Obvious: these consumers have seen and experienced it all, and they are busy. Think creatively when it comes to attraction and retention strategies. Know where they spend their time, how they spend it and when they are going to be most receptive to marketing.
Know the Consumer: take time to understand who the consumer is and what excites them, on an individual level. Develop 1:1 marketing strategies based on their interests and their own perception of luxury. Think beyond branded events and gifts to engage their interests holistically – your category is just one of their many interests.
Know the Brand: to sell to this incredibly discerning client, you need to know your products and experiences inside out, as well as that of your competition. Assume that they have been prospected by all your competitors and know why your product is the most relevant choice to this individual.
“ Brands that excite UHNW consumers have a strong brand position and point of view ”
Balance the Power: brands that excite UHNW consumers ultimately have a strong brand position and point of view, but at the same time, they must provide immaculate customer-centric service. Knowing when to say no is key – never compromise the DNA of the brand, but bend over backwards to ensure all interactions are seamless.
Note the Changes: as wealth centres shift, the nationality, age and culture of the UHNW individuals are changing, forcing with it, a change in what constitutes luxury for the world’s wealthy. The desires of a young Indian tech entrepreneur will be far different to that of a baby boomer investment banker in Manhattan, regardless if their bank balance is similar.
Go Bespoke: for the UHNW client, luxury brands should be focusing on bespoke (1:1) marketing strategies rather than segmentation by geography or age.
To further investigate wealth and affluence on Luxury Society, we invite your to explore the related features as follows:
Published on Oct. 17, 2013 under UHNW