Online clubs, social networks, concierge services and contrived events designed to attract the Super Rich pop up regularly, mainly designed to generate either membership fees or dollars from luxury sponsors, sometimes a combination of both. From A Small World (an invitation-only Facebook for the very wealthy and attractive) to last weekend’s Fyre Festival (a Coachella for folks who have a private jet – you had to fly to Great Exuma in The Bahamas) which went kaput amidst cancelled musical acts and bread and cheese sandwiches instead of caviar and champagne, most of these ventures fail to achieve tangible results for the luxury brands they seek sponsorships from.
The come on is a similar formula again and again: Get some celebrity “investors” and influencers who spread the word via their extensive social media accounts. Get a bit of TMZ or Page Six-type buzz. Create visuals showing the target client as one of several stereotypes, either logo-clad 20-or-30-somethings on a private jet with a puppy, in a trendy hotel bar or scantily clad partying on a Mediterranean beach.
While many of these attempts to create a network of affluent consumers the organizers can then leverage by marketing them to luxury brands don’t end up in tatters as did Frye, my experience is, for the most part, they don’t deliver the high-spending customers luxury brands are seeking. The general result is luxury marketers end up paying money to serve a good looking crowd with very little buying power some champagne.
Now I understand why the UHNW are a popular target. There are just over 200,000 Super Rich families and they spend over $230 billion a year on luxury fashion, jewelry, watches, accessories and travel. In fact, this small sliver of the world population accounts for over 20% of all luxury spending. Unlike the mass affluent, they are less likely to cut back during downturns and they don’t have to worry about getting laid off since they own the company.
They also don’t fit into the stereotype most of these clubs and festivals target. Like many of the influencers who promote these products, over 80% of the Super Rich are self-made, many entrepreneurs that started their own companies. The difference is unlike celebrities, their pathway to wealth is more likely to be construction, farming, manufacturing, distribution, services or retailing than being able to sing or having their own TV show. They are generally shrewd and while they spend a lot on luxury, they do not need to be part of clubs trying to attract posers and they don’t need a specific brand of loafers to give them affirmations. In other words, the entire marketing most of these clubs and festivals use are the antithesis of the psychography of the Super Rich.
Still, luxury companies want to get face time with UHNW, so what ways work?
The answer, for the most part, is to go where the Super Rich go, but that’s not always enough. It’s why we see a traffic jam of luxury brands at venues such as Art Basel. However, the challenge is finding the very wealthy while not being overrun by those just trying to get a peek over the wall. Many events that attract the Super Rich attract lots of gawkers as well.
However, there are effective ways to work around these challenges. Some examples are to look at places you can target the wealthy directly.
One area that I think is intriguing is luxury boxes at pro and college sports events, particularly sports such as football where the best viewing is from luxury boxes. The cost of a luxury box for a pro football team runs into the hundreds of thousands of dollars, and not all eyes are glued to the game. College football games can get several hundred private jets with wealthy alumni flying in.
Megayacht shows are another good venue if you’re in the right place. The Super Rich don’t come to shows like Ft. Lauderdale, Monaco or Palm Beach to admire the super yachts, they come to charter them, buy them or build them. Unlike the masses who buy day tickets and walk around, the Super Rich come to the shows with set business appointments to view yachts they are interested in buying or chartering. By partnering with a yacht broker, luxury companies can be part of their VIP lounges where UHNW customers come to meet their broker and where they relax between viewing yachts.
While cultural events like opera certainly come to mind, you will also find the Super Rich participating in big game fishing tournaments or attending trade shows at industries where they own or manage businesses. If you want to pick off a dozen or more top CEOs pick key industry B2B conferences where they attend as keynote speakers, to announce new products and hold press conferences. Because the interests and sources of wealth of the Super Rich are fragmented, so are the places you will find them. While it takes a bit of work to find the right venues and organize smart interactions, at least the people you will be talking to will be your true UHNW target instead of some nice looking people who will be back in their cube Monday morning.