Marketing Luxury to the Super-Rich
The super-rich (net worth $500 million or more) are the optimal market for many exceptional, high-quality luxury services and products. From the downturn that started in 2008 through today, across the world, the super-rich have not really wavered in their attraction for top-of-the-line luxury products and services. According to Wealth-X, there are 5,625 super-rich families or individuals throughout the world today with an aggregate net-worth of $8.6 trillion. This certainly makes for a very attractive market for quit a number of luxury marketers.
The rich (net worth between US$30 million and US$500 million), overall, are also increasing in number and aggregate wealth. Wealth-X puts this segment at 181,755 individuals or families worldwide with a total net-worth of $17.2 trillion. Nevertheless, there are very meaningful qualitative and quantitative differences between the rich and super-rich. For example, while the super-rich are growing precipitously in number and cumulative wealth, the same cannot be said for those less well to do. So, while the rich are certainly an appealing cohort for luxury marketers, the super-rich represent the pot of gold at the end of the rainbow.
Another consideration for luxury marketers is that, in many respects, the aspirational luxury buyer is slowly disappearing. This makes the exceptionally wealthy all the more important to many, if not most, of the higher-end luxury firms.
Marketers of very high-end luxury services and products often have to contend with a more discerning customer and a severely more crowded environment. The ability of these marketers to cut through the extensive clutter created by the intense competition is proving to be the difference between significant success and treading water, if not fading away entirely. A number of business development strategies are proving particularly effective in winning new business from and loyalty (i.e., repeat business and referrals) from the super-rich. However, without question, one of the most efficacious approaches is for the luxury marketer to become a thought leader.
What’s very telling is that with this level of wealth, the more clever and effective luxury marketers are recognizing the need to address two constituencies. For many luxury marketers focusing solely on the super-rich is woefully insufficient. In addition, it’s becoming increasingly critical if not absolutely essential to win over the key professionals advising the super-rich. Examples of these key professionals include the Executive Directors at family offices and the outsourced chief operating officers many of the super-rich are now employing.
Depending on the luxury category, these key professionals are tasked with making and/or implementing the luxury purchase decisions directly or in conjunction with vetted category specialists. The less likely the luxury category lends itself to impulse buying, the more likely these key professionals will be involved.
Overall, the greater involvement of key professionals the more thought leadership becomes a differentiator. Once again, this is a function of the nature of the luxury product or service in question. We see that the greatest benefit for a luxury marketer for being a thought leader is when the offerings are relatively complex and there are a number of comparable providers. Examples of these types of luxury products include cars, jets, yachts, fine art and even jewelry and watches. On the service side we’re talking about the likes of concierge medicine, travel services as well as resorts and spas. Furthermore, with a strong and growing focus on “high-end experiences,” luxury companies will find that being a thought leader will prove exponentially effective in bringing in new clients.
When it comes to marketing luxury to the super-rich, being a thought leader can prove instrumental in cultivating these exceptionally wealthy consumers directly. Moreover, to the extent these ultra-wealthy individuals rely on their close advisors to source luxury services and products, being a thought leader is an exponentially powerful approach to marketing luxury to the super-rich.
While thought leadership as a business development strategy is presently recognized and embraced by a wide variety of businesses such as the array of professional services, it is just now becoming a critical marketing strategy for luxury marketers. Because of the proven effectiveness of thought leadership campaigns in conjunction with the various more traditional ways of marketing luxury, we anticipate this approach will be strongly embraced by forward thinking luxury firms.
Bruce H. Rogers and Russ Alan Prince are the co-authors of the just published book Profitable Brilliance: How Professional Service Firms Become Thought Leaders now available on Amazon http://amzn.to/OETmMz