The Super Rich seem to have opened their bank accounts in a big way for politicians. New research shows politicians have been particularly successful in increasing their share of wallet from The Top 0.1 Percent. In a study released last week called “The Polarization of American Politics,” Keith T. Pool and Howard Rosenthal charted that the Super Rich now account for 40 percent of political donations, up from 30 percent in 2005 and 10 percent in 1982.
Yet, needless to say, being Super Rich or Ultra High Net Worth doesn’t automatically mean a person is jumping over the counter to buy expensive watches, lining up to buy their own yacht or figuring out the best way to spend $5,000 on a hand stitched suit. Luxury marketers have to work to get their money.
In fact, when I co-authored The Sky’s The Limit with Russ Alan Prince, one of the findings was the UHNW who collected Ferraris might in fact eschew the idea of paying thousands for a suit. This of course was the opportunity for luxury marketers: Getting the very wealthy who had the money interested in their category and products. In fact as I’ve written about, interest in categories in many cases only takes root after the UHNW has become UHNW. Their early years were consumed by how fund and grow their widget business when nobody else believed. Nice handbags and watches were the furthest thing from their mind.
Naturally I was happy that private jets are a common denominator for the Super Rich. For the very rich they are not a luxury, they are a necessity. It’s really just being able to afford a bit more convenience than others, sort of like taking a car as opposed to the bus or the helicopter to the Hamptons instead of The Long Island Railroad. I always enjoyed the cover of Chrystia Freeland’s book Plutocrats with the picture of a mom and son walking to a private jet parked in their driveway. To me, that summed it up.
Back to the point: I’ve always been fascinated by the rich who spend tens of millions of their own money running for office. After all, it’s a purchasing decision, or at least an attempt to purchase.
Without delving into politics, the research by Poole and Rosenthal pointed that the donations of the Super Rich donated mainly resembles the giving of the masses. In other words, the ROI on this tremendous surge in donations is what one commentator described as “a voluntary transfer of funds to local TV and radio stations.” So here you have it, the wealthiest of the wealthy literally giving their money to salespeople at the television stations without being able to say they got value, yet Bill Gates is still wearing a plastic watch.
So what can luxury marketers learn from how politicians are able to deftly sell to the Super Rich?
When we understand some super rich givers start early, before the candidate is known, but equally many hop aboard later after they’ve established their brand, it makes it even a bit more confusing. While I haven’t quite wrapped my head around it, I do believe there is a lesson in there somewhere.
I am sure many luxury brand CEOs would like to see their market share rise 400 percent!
What do you think?