June 2015 –This article from Doug Gollan of Forbes.Life.com provides great insight on why luxury brands and retailers over estimate their awareness and familiarity among the affluent. Doug Gollan has worked with companies selling to the UHNW and super rich consumers for many years.
If the 200,000 UHNW households do not know you, how many of the 12 million other millionaire households in the U.S. know you?
The following text presents verbatim excerpts from the June 6 article (How Much Do the Super Rich Know about Luxury Goods and Services). The full article may be viewed here. A related article (Do the Super Rich Know What you are Selling) can be found here.
“The Super Rich know less about your product or service than you think.”
“If you are a marketer in the luxury segment with any sort of budget, I am sure glad I am not on your side of the table. Everyday you have a line of people at your desk talking up some segment and why you need a higher profile with that group.”
“However, having been there and done that for over 15 years, I can safely say there is one segment (the Super Rich) many luxury marketers believe their brand has covered, and I can tell you first hand they don’t.”
“….among purveyors of luxury goods and services….there is an urgency to get the word out to a broader audience of aspirational consumers with the belief that Ultra High Net Worth prospects already have some type of intimate knowledge of what they are selling. It’s as if billionaires and centimillionaires wake up in the morning wondering what new luxury products have been launched lately.”
“Now that I don’t have a dog in the fight, I thought it might be useful to list off why luxury marketers and sellers need to re-think about whether or not they have enough focus on the UHNW segment. And by the way, hosting a couple “collector” dinners, sponsoring a polo tournament and assuming/hoping that today’s Super Rich are also reading regularly the media on your current plan is not a strategy”
“First of all, around 90 percent of Ultra High Net Worths (UHNWs) are self-made, first-generation wealth. Many came from middle class households. Dad might have been a bus driver or factory worker, mom a teacher or nurse. Wealth was created via business success or innovation. There were no father and son trips to Hermes to buy new saddles before heading to the club. More likely mom was taking the future UHNW to soccer games in a minivan while dad was painting the house.”
“Today’s UHNW was never the aspirational consumer flipping through fashion magazines in their cubicle. As they built their business, every extra dollar was plowed into the business.. There are many stories about today’s very rich having to borrow money from friends and family to make it through the early years.”
“Somewhere between age 30 and 50 these folks crossed the chasm that separates being UHNW from aspirational wealth. So while UHNWs may know the brand, they might not know everything you do.”
Good research among millionaires, the kind AARC does by mail among a projectable sample rather than among online panels, can help you to understand where you (and your competitors) stand with the 12.2 million households with a minimum $1 million net worth (i.e. the wealthiest 10% of U.S. households).