One thing that makes marketing luxury products and services to the Super Rich difficult is they are not a homogenous market. Depending on the research you look at as much as 90 percent are self-made. You are as likely to find them attending a college football game (big universities such as Notre Dame see hundreds of private jets flying in wealthy alumni for games) as an art exhibit. The same goes for hunting and fishing versus stereotypical polo.
The Super Rich or Ultra High Net Worth (UHNW) are typically defined as having a Net Worth of $30 million and up.
While many think of Wall Street and Fortune 500 CEOs or perhaps royalty, actors, musicians and sports stars or even Silicon Valley tech, and each sector has brought us a portion of the UHNW population, many made their money on more mundane pursuits such as car dealerships, refuse collection, vitamins, farming (from chickens to lettuce), energy, real estate, construction, manufacturing (from auto parts to all the plastic cards in your wallet).
The 2007 book I co-authored “The Sky’s the Limit: Marketing Luxury to the New Jet Set” was based on interviews with over 600 private jet owners who had an Average Net Worth of $89 million.
From it, we developed three distinct buying personalities that I believe are the key to understanding why the Super Rich buy and why they don’t.
Co-author Hannah Shaw Grove notes, “Segmentation can be a very helpful tool for luxury marketers or really anyone who is trying to engage with ultra-affluent buyers. Identifying the similarities and differences within populations helps us know why people act the way they do, what information grabs their attention and what prompts them to take certain actions. When those insights are incorporated into marketing and communications initiatives it can increase their effectiveness exponentially.”
The three UHNW luxury buying personalities we identified are:
Trendsetters are in alignment with their social environment. They’re often first movers as well as influencers within critical communities.
Winners use luxury purchases as personal rewards and means of validation. Spending is usually prompted by key events such as a noted business accomplishment.
Connoisseurs are exceptionally knowledgeable and highly deliberate in their purchasing behavior. However, even within this group there are huge differences in the expertise of collectors.
The percentage of each group varies in different categories, meaning that sellers of mechanical watches need a different approach than fashion companies or yacht brokers.
One thing is clear: The Super Rich may only number slightly over 200,000 households worldwide, but they are cumulatively worth as much as $50 trillion (more than the GDP of the 10 largest countries) and spend $235 billion annually on luxury purchases, representing 19 percent of total sales. For luxury marketers, a smart UHNW strategy is more important than ever.