Lewis Katz was 72 when he died in a private jet crash last week. At the time of his death he was estimated to be worth about $400 million. While he came into the spotlight via his ownership of pro sports teams and Philadelphia newspapers, like many of the Super Rich he came from modest beginnings and made his money through mundane pursuits.
Katz, it turns out was raised by a single mother, after his father died of a heart attack when he was two years old. She held down multiple jobs and he worked his way through college and then law school. He made his money in real estate, including buying and selling parking lots.
I don’t know if Katz was into fine watches, fast cars, collecting wines or other toys of Ultra High Net Worth households, but what is sure is these type of things were a world away from the row houses in the blue collar neighborhood of Camden, New Jersey where he was raised.
We do know when he was interested in something, he spent freely. He spent lots of money on high profile toys such as NBA teams and big city newspapers. In fact he spent $88 million several days before his death to gain full control of The Philadelphia Inquirer. We also know he was a sharp dresser, had homes in Florida, New York, Rittenhouse Square in Philadelphia, the Jersey shore and frequently was aboard his private jet. According to reports, he used the jet about 500 hours a year, probably meaning some 150 or more flights a year.
In “Do The Super Rich Know What You Are Selling” I detailed how many of the wealthiest consumers may know less about luxury products and services than their marketers believe. With nearly 90 percent of the Super Rich self-made, it showed that most of their early years were consumed with building a business and making money, not flipping through GQ or Vanity Fair in a cubicle while they pondered a possible promotion.
Over the weekend I was at the watch and jewelry shows just held in Las Vegas. With several watch company CEOs we discussed how being rich doesn’t automatically mean one goes around buying $1,000 bottles of wine and $100,000 timepieces. We all know Bill gates famously eschews pricey watches. In my conversations, it was clear that many top collectors and buyers gained their appreciation for watches later in life. I think it’s interesting that billionaire Carl Icahn did not buy his first superyacht until he was nearly 60, although by any financial measure he could have bought one 20 years earlier.
While most luxury house ad budgets are spent against aspirational consumers, luxury brands tend to, in my opinion, believe that events are the silver bullet in wooing UHNWs. I believe in an integrated approach, however, Boston Consulting Group research with 10,000 luxury consumers found magazine advertising is far more influential in driving luxury purchasing decisions, and with U.S. luxury consumers magazine ads reign by a 4-to-1 margin. What’s more, while a private dinner might impact a dozen prospects, targeted media can deliver hundreds of thousands of financially qualified consumers.