A consumer who does not cut corners. One who can afford to (and does) splurge on your fancier items – the ones you had given up hope on. One who shops pricey, often, and comes with a great credit record. Yup, the stuff of marketers’ dreams – an affluent customer!
While being affluent can mean different things in different parts of the world, in the United States, an affluent consumer is one who makes over $100,000 annually. There are further stratifications in the rarified air of the millionaires and above (high net-worth individuals, ultra-high net-worth individuals), but for the purpose of our current discussion, let’s just call them all “consumers we’d give an arm and a leg to have.”
How big a market size are we talking about?
Research by Ipsos MediaCT as of July 2013 pegs the number of affluent consumers in the U.S. at 62.5 million adults who make up 26 million households. This figure represents 1.2 percent of total U.S. households. Further,
- “Affluent” people have an average income of over $200,000 and net worth of $1 million
- These affluent consumers spent $1.9 trillion across 159 consumer categories last year.
Where can these affluent consumers be reached?
Traditionally, affluent consumers were considered a difficult demographic to crack, considering that they limited their exposure to traditional mass media like television, radio, or even mainstream print publications. The use of digital media was considered too “brave” and a “waste of resources” while targeting the wealthy.
A Wealth–X survey of marketers found them surprisingly reluctant to target HNIs via digital platforms. Twenty-six percent of marketers believed that wealthy individuals do not shop online, while 68 percent thought that wealthy consumers did not respond to digital campaigns as well as they did to other media.
The trouble is the truth could not be farther from this perception that marketers seem to have in their minds about high net-worth individuals and their media preferences. A chat with the wealthy themselves paints a very different picture of their media preferences and shopping habits.
According to Ipsos MediaCT, U.S. affluents are extremely technology savvy. Not only is their time spent online on the rise – from 32.8 hours per week in 2011 to 41.6 hours per week in 2013 – but they are also active on social media, all of them are multi-device users, and nearly 40 percent use mobile apps to shop online.
So now let’s look at some strategies to target and convert affluent buyers.
1. Focus on search
Affluent buyers may not shop online always, but they definitely do their homework online before making any purchase, especially if the item is high-value. So before you dismiss search marketing as something that works only among the middle classes, be aware that the wealthy like to do their research before putting their cash down, too. According to a study by Google and Ipsos Media, 75 percent of affluent buyers research online before making a big purchase.
In this context, online research does not just refer to using a search engine. It also refers to checking out e-commerce sites, blogs, product review sites, and other avenues to learn more about the product.
To do:
- Create an interactive and informative website that satisfies the curiosity of an avid searcher. If you’re targeting an affluent audience, make sure your design and layout reflects class and desirability – no affluent buyer would want to be associated with cheap-looking products or brands.
- Make your site search friendly to rank higher in search results. From on-page SEO elements to creating great content that will draw in eyeballs, invest some time and effort on SEO.
- Don’t forget paid search marketing. Figure out the keywords that your affluent buyers favor and use them in your PPC ads. Typically these would be part of the long-tail list that would be used by your regular users.
- Target the right demographic segments within the affluent buyer group. Research shows that affluent women are more likely to buy high-value items and at a higher frequency in Asian countries. They are also likely to be in their mid-30s. On the other hand, affluent Western shoppers are an even 50-50 split between the men and women who also tend to be significantly older than their Asian counterparts – in their mid- to late forties.
- Display retargeting is your best friend. Since affluent buyers carry out research while buying high-value and luxury items, display ads play a huge role in conveying the luxury and brand value of your products in just a small banner ad. Combine the power of search and display ads by deploying display retargeting to convert your affluent users.
2. Be mobile ready
Having a mobile-friendly website, creating and sending out mobile-friendly email newsletters, and having your own mobile app are things that are “good to have” for the general population at large.
Related Class: Introduction to Mobile Marketing
However, with affluent buyers it’s imperative to be mobile first and not mobile friendly. The Google and Ipsos study quoted earlier show that every last one of them uses multiple devices, and the penetration level of smartphones among this demographic is twice the levels among the general population.
To do:
- Invest in a responsive website. Responsive web design might be more expensive than regular web design, but that is the future of all websites. The quicker you adapt to it the better; especially if your primary audience consists of affluent buyers. These days there are quick and simple plugins to make your mobile site responsive. A dedicated mobile app is not a bad idea either, considering that four in 10 affluent buyers use retail mobile apps on a regular basis.
- Mobile-friendly emails. With 66 percent of all emails being opened via a mobile device, it’s elementary to have mobile-optimized emails. The funny part is the sheer proportion of non-mobile-ready emails that we see floating around in spite of these skewed statistics.
- Invest in mobile advertising. According to research by the BBC of 6,000 users across six countries, mobile ads are over four times as effective as desktop ads with the affluent demographic. Target native ads in news apps, as they are the most popular type of app for wealthy users.
3. Get it right the first time
Past experience is the strongest driver among high net-worth individuals when they purchase products. In the case of a high-value product like a luxury car, great past experience scores a 7.6 on a scale of one to 10 when compared to other factors that affect a purchase.
To do:
- The lesson here is straightforward. Treat your important and high-revenue customers with kid gloves, make sure your products are top-notch quality, and offer them the best after-sales service in the industry to build a level of confidence that keeps them coming back.
- Invest in a good CRM that helps you deal with each individual customer from the time she is a prospect to when she becomes a lead to conversion and beyond.
- Remember, these are not price-sensitive customers who will switch loyalties to save a few dollars. If your track record with an HNI is a proven and positive one, the chances of them coming back to you for a repeat purchase are pretty high.
4. Connect with social media
Connecting with HNWIs on social media is an uphill task. While over 90 percent of HNWIs use social media in one form or another, they are extremely selective about who they connect with and what personal information they give out to brands via social media.
Related Class: Introduction to Social Media Marketing
However, this is not to say that luxury and high-value brands haven’t managed to connect with affluent buyers on social media. Instead of coupons and deals, affluent buyers seek value and exclusivity. Brands that convey an aspirational brand image on social media as well attract the affluent buyer who is assured of their bragging rights and would love to associate with such brands.
To do:
- Use social media to answer queries and connect one-on-one with users. With high-value purchases, a user (even a wealthy user!) likes to be sure of every tiny detail before making the purchase. Aid this process by having frank and informative one-on-one conversations with them on social media.
- Don’t be afraid to show your funny bone. Premium water maker Evian showed the way to all high-value brands over the years with its hilarious spots with dancing babies that took social media by storm. The latest in the baby video series – Baby & Me – got over 100 million YouTube views in weeks and even spawned its own mobile app!
- Don’t overshare on social media. With the news feed algorithms on Facebook and the barrage of continuous updates on Twitter and other platforms, you have learned that high volume of posts = average visibility from a user’s perspective. However, avoid spamming your affluent audience with too much content or being too intrusive on social media. This will go a long way to convince them that their privacy is as important to you as it is to them.
- Social retargeted ads. Combining the reluctance of affluent buyers to divulge personal details to brands and the propensity of affluent users to carry out extensive research before buying, retargeted ads on social media are a great way of offering relevant messaging to affluent buyers. It not only builds brand awareness, it grows followers among this audience segment and increases the click-through rates to your brand website.
Conclusion
Starting a business in today’s hyper-connected world isn’t tough. Even home-based businesses have risen to dizzying heights of success thanks to the level playing field that all brands now play on. However, what separates a successful business from an also-ran is their understanding of their customers and the ability to deliver to customer expectations.
Affluent customers raise the bar for business owners yet another notch. But as research and experience prove, they are definitely not a breed to be feared or left alone on digital mediums. Armed with the right user insights, they can be just as pliable and twice as rewarding as the general population.