The super-rich have a net worth of $500 million or more. They are the optimal market for many exceptional luxury services and products. There are significant qualitative and quantitative differences between the rich and the super-rich. For example, while the super-rich are growing precipitously in number and cumulative wealth, the same cannot be said for those less well-to-do. So, while the rich are certainly an appealing cohort for luxury marketers, the super-rich represent the pot of gold at the end of the rainbow.
Another consideration for luxury marketers is that, in many respects, the aspirational luxury buyer is less of a factor. This makes the exceptionally wealthy all the more important to many, if not most, of the higher-end luxury firms.
Marketers of high-end luxury services and products often have to contend with a more discerning customer and a severely crowded environment. The ability of these marketers to cut through the extensive clutter created by the intense competition is proving to be the difference between significant successes and treading water, if not fading away entirely. Several business development strategies are proving particularly effective in winning new business and loyalty (i.e., repeat business and referrals) from the super-rich. However, without question, one of the most efficacious approaches is for the luxury marketer to become a thought leader.
What’s very telling is that with this level of wealth, the more clever and effective luxury marketers are recognizing the need to address two constituencies. For many luxury marketers focusing solely on the super-rich is woefully insufficient. In addition, winning over the key professionals advising the super-rich is becoming increasingly critical, if not essential. Examples of these critical professionals include the executive directors at single-family offices and the outsourced chief operating officers many of the super-rich are now employing.
Depending on the luxury category, these key professionals are tasked with making and implementing the luxury purchase decisions directly or with vetted category specialists. The less likely the luxury category lends itself to impulse buying, the more likely these key professionals will be involved.
Overall, the greater involvement of key professionals, the more thought leadership becomes a differentiator. Once again, this is a function of the nature of the luxury product or service. Considering the matrix below, we see that the greatest benefit for a luxury marketer for being a thought leader is when the offerings are relatively complex, and there are a number of comparable providers. These luxury products include cars, jets, yachts, fine art, jewelry and watches. On the service side, we’re talking about the likes of concierge medicine, travel services, resorts and spas. Furthermore, with a strong and growing focus on “high-end experiences,” luxury companies will find that being a thought leader will prove exponentially effective in bringing in new clients.
The Advantage of Being a Thought Leader
| Relative complexity of the offering | |||
| Low | High | ||
| Number of comparable luxury providers | Several to Many | Though leadership provides moderate advantages | Thought leadership provides a significant advantages |
| Very Few to Few | Thought leadership provides minimal advantages | Thought leadership provides some meaningful advantages |
When marketing luxury to the super-rich, being a thought leader can prove instrumental in cultivating these exceptionally wealthy consumers directly. Moreover, to the extent these ultra-wealthy individuals rely on their close advisors to source luxury services and products, being a thought leader is an exponentially powerful approach to marketing luxury to the super-rich.
While thought leadership as a business development strategy is presently recognized and embraced by many businesses, such as the array of professional services, it is just becoming a critical marketing strategy for luxury marketers. Forward-thinking luxury firms will strongly embrace this approach because of the proven effectiveness of thought leadership campaigns in conjunction with the various, more traditional ways of marketing luxury.
Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He consults with family offices, the wealthy, fast-tracking entrepreneurs and select professionals.
