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I'm RICH! $$$$ Take my money! [Marketing to the Affluent]

Discussion in 'Advertising, Marketing, Social Media' started by AllenCrawley, Feb 4, 2014.

  1. AllenCrawley
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    AllenCrawley Legendary Contributor Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    This thread is dedicated to those of us who sell products to the affluent. High end, high quality, luxury products and/or services.

    Marketing to the affluent requires a slightly different angle and approach.

    I will be sharing some insights and I encourage anyone with experience in this area to do the same.

    I'd like to start with a list of books I've recently read that I highly recommend:
    • The Republic of Tea
    • Wild Company (the story of Banana Republic)
    • Peterman Rides Again
    • The Barefoot Spirit
    • No B.S. Marketing to the Affluent
    The first four books all have a common thread. They created a story behind their company and their products and provide exceptional customer service. Each of them knew who their market was, how to reach them and knew the importance of brand identification, storytelling, copywriting and positioning.

    I also suggest getting on the catalog mailing list for J.Peterman. I've received the J.Peterman catalog and the copywriting is amazing. You can literally pick up the catalog and read from beginning to end like it's a book. The stories they created for each piece of clothing is retail copywriting at it's best. Dan Kennedy's No B.S. Marketing to the Affluent even addresses J.Peterman's catalog copywriting and the brilliance behind it.

    Banana Republic did the same with their catalog before they were bought by The Gap. Here is an online resource for their old catalogs… http://scottcadams.com/bananarepublic/

    More to come...

    Feel free to list recommended books, resources, experiences, personal insights, marketing strategies, etc.
     
    Last edited: Feb 4, 2014
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  2. Kak
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    This is great stuff. Thank you Allen.
     
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  3. Genium
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    This is awesome Allen! Thanks for the info and the recommended books. Would you say that marketing to the affluent is a little more difficult or just different?

    I am currently starting a 7-book course on mastering copy-writing but will definitely jump into these books right after.

    Looking forward to seeing more
     
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  4. AllenCrawley
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    BTW, abebooks.com is a great place to buy the above books for just a few bucks. (Thanks @Mrs. BRKb for recommending them)
     
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  5. Kak
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    It is more difficult. Marketplaces and the easy money sales portals are set up for cheap junk. The absolute most cutthroat, bottom barrel, junk... With some nicer stuff mixed in. So you are tasked with competing with the junk that gets all of the traffic and reviews.
     
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  6. JAJT
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    Luxury goods obviously require that your image portray luxury from start to finish.

    Sounds simple but it means you can't skate by with "okay" photos and "okay" websites and "okay" customer service. Luxury goods require more customer experience.

    If you sell a $5 tie and it's okay - nobody cares. If you sell a $50 tie, and it's okay, expect issues.

    Thanks Allen for the resources - I'll check them out. The Peterman catalog's copywriting is of particular interest.
     
  7. Bigguns50
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    @AllenCrawley.....Too sweet ! I'm all over this thread.

    Thank you ! Hopefully I can give some resources too.
     
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    Here's another one, @AllenCrawley : Secrets of High Ticket Selling. The book is ok (4 stars on Amazon), but the title's an A+. Who wouldn't want to know the secrets? :)


    "The escalating costs of making a sale have made direct sales of low-cost items virtually obsolete in today's marketplace. Yet most selling techniques still revolve around concepts developed in the 1930s, when person-to-person sales of low-ticket items were the norm. The Secrets of High Ticket Selling by Hal Slater uses contemporary psychological research to teach you how to understand the behavior of your buyers to improve your unique sales process, leaving you with more control over your sales process and its outcomes.

    The Secrets of High Ticket Selling describes advanced negotiating skills, language patterns, and gestures that enhance a buyer's excitement. You will also learn methods for picking up on a prospect's objections and doubts early in the sale and heading them off. This book stresses that the quality of the sale is far more important than the number of prospects you pitch, and that in today's high ticket market you must work smarter, not harder.

    If you have a proven sales method, trying to change your process will not bring results. The Secrets of High Ticket Selling instead teaches you to build on your success by studying the dynamics of the sales transaction to discover areas for improvement. Once you have identified the steps in your process to be refined, you will have a better understanding of your own sales psychology and the needs of your target market."
     
    Last edited: Feb 7, 2014
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  9. AllenCrawley
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    MYTH:
    All affluent people spend money willingly, sometimes carelessly, on anything and everything because they have the money to do so.

    FACT:
    Nearly all are extremely frugal about most things and amazingly un-frugal about a few things.

    Nearly every affluent person has at least one passion, hobby, interest, recreation, philosophical bias, cause or emotional attachment that they are all about, more than anything else, on which they will spend any sum of money.

    Just a few examples: cigars, watches, golf, vacations, shoes, cars, artwork, collectables, bicycling...



    People buy experiences and a story.

    TIP: every business (not just those targeting the affluent) should be in the experience business.


    (the above is from my personal notes and I believe I wrote these down during or after reading No B.S. Marketing to the Affluent.)


    Taggin' a few people here I know could benefit and contribute to this thread:
    @Jill
    @biophase
    @PaulRobert
    @IceCreamKid
     
    Last edited: Feb 8, 2014
  10. Kak
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    Just a few examples: cigars, watches, golf, vacations, shoes, cars

    Lol you just described me...
     
  11. Dan Willis
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    Thanks for this! I was just wondering the day how the transition from common to affluent operates in marketing. I look forward to reading some of these works.
     
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    I disagree with a lot in this thread. From my experiences, if you want to appeal to elite families and the aristocracy, you need to decide whether you appeal to the culturalist or the materialist. If it's high quality and low-key (unidentifiable haute couture, unheard of social networks and clubs, etc) you're going to appeal to the deliberately understated. The real work in the exclusive portion of luxury is regularly weeding out hanger-ons and any glitches in a clean, professional image.

    Materialist is what everyone has access to. IIRC 60% of Japanese women own a Louis Vuitton bag. If you look at how they work very hard to come across as culturalist to the lower classes (using astronauts and David Bowie for ad campaigns, suing rappers for making them look tacky, etc) - I think this is the oft-missed point. You need the big logos and cheap perfumes that the poor will buy, but you need to make them think you're classy so they feel classy.
     
  13. RBefort
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    I know this isnt fastlane, but I want to do something that interests me while figuring out fastlane. Anyone sell cars to affluent clients? Thought about applying at a porsche/maserati dealership near my house. Only one like it in area. Do not have experience selling...only read a few books like SPIN Selling and Influence: Power of Persuasion. Techniques still apply, or is this even something I should look into? Dont mean to hijack thread...thought it kind of fit this area. Apologize if not.
     
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  14. AllenCrawley
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    There are different levels of rich and knowing which level your target market resides will help you understand their thinking and how to market to them. For the sake of argument I'll use Dan Kennedy's definitions. Dan subdivides the affluent population into:
    • Mass Affluent (modestly rich)
    • Affluent
    • Ultra Affluent
    • Ultra-Ultra Affluent
    then a few further segments into the following specialty market groups
    • Affluent and Mass Affluent Boomers
    • Affluent Gays and Lesbians
    • Affluent Entrepreneurs and Business Owners
    and then by gender, male and female.


    Mass Affluent (modestly rich) - household incomes of $85k to $150k and/or net worth exceeding $250k. This is the fastest growing segment. They are younger and more diverse than any previous affluent population.

    Affluent - household incomes of $150k to $250k and/or net worth exceeding $1million.

    Ultra-Affluent - household incomes of $250k and up and/or net worth of $3 million to $10 million. This is the wealthiest 10% of US households as defined by net worth (according to a recent Federal Reserve study).

    Ultra- Ultra Affluent - household incomes of $1 million and up and/or net worth starting at $10 million but more commonly in the $20 million to $50 million range or more. Private jet owners in this range. Average yearly income of $9 million with a net worth in excess of $50 million. Each year they report spending $30k on wine and alcoholic beverages, $150k at hotels and resorts, $115k on clothes and accessories, $250k on jewelry, $500k on home improvements and furnishings.
     
    Last edited: Feb 8, 2014
  15. Jill
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    Thanks, Allen! I'm going to download that book today. I'm in the middle of another right now, The Luxury Strategy. I find the discussion and analysis of this topic fascinating. One can run statistical analyses all day long to derive general conclusions. But the reality is that one has to know his own market and decide how to take his product to that market, in order to be successful. I largely agree with your assessment
    I see this not only as an observer of my own market (to which I sell a luxury good product), but also as an observer of friends and my own life. The most interesting thing to me, as I read the post above, is that while I statistically fall into the middle of those groups, I don't feel the least bit affluent. I think that's what keeps me behaving frugally in most areas of personal consumption.

    From my experience, most who were responsible for their own affluence understand the value of the dollar and what was required to obtain it. Coming from a VERY middle class upbringing, I am quite frugal in many ways. But I also enjoy my few luxuries. I could wax eloquent about my personal experience or I could give you examples of my customers for countless paragraphs. But at the end of the day, every story is different. Every reason for indulgence is motivated by something wholly unique to that individual, as a result of their unique experiences in life.

    As a purveyor of goods, my job is to figure out what motivates the majority of them. For some, it is the appearance of a "luxury lifestyle" as referenced above re: Louis Vuitton bags in Japan. Ralph Lauren absolutely mastered this type of "lifestyle marketing". Then there are those who truly value the artisanship of a finely crafted cigar or car or watch or necktie that is the best in the world. It is the difference between intrinsic value and extrinsic value. They oftentimes intersect. e.g. The brand gains extrinsic cache BECAUSE of its intrinsic qualities. But consumers of these products are motivated for different reasons, depending on their needs in life. One would be wise to market to both.

    The temptation to capitalize on a brand's public perception (extrinsic)to the detriment of the "one who brung ya to the dance" (quality) has resulted in the demise - or at least dilution - of many great brands. Armani was one of the first to successfully introduce dilution brands (A/X, Mani, etc) to the market in order to reach a broader market. Many others have successfully followed suit, such as Ralph Lauren. They provide a 2nd price tier to a exponentially larger market who wants to associate with the brand, without diluting their primary brand.

    Others who have tried it less successfully are those who simply lowered their prices like Perrier, Dior, Burberry, etc. By lowering the price of their core product/brand, the element of exclusivity is diminished and therefore, no longer desirable.

    Great topic. Good conversation. Thx for posting it.
     
    Last edited: Feb 8, 2014
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  16. AllenCrawley
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    Wow...amazing creative, artistic flair to the stories in this catalog. I love it !

    @Jill, great info...thanks ! I have noticed brands that used to be 'high end' and now can be bought anywhere for what seems an average price. (I always felt like...I thought this was 'exclusive'...now what's so special about it ? ...Now I don't want it. You know...your picture paints you, from my point of view, as affluent. Even lack of jewelry...it's just your 'look'. No girl crush..:wideyed: I don't know what's in the background, but it appears to possibly be some artwork.??

    I find this topic so fascinating. I worked for a hard money lender for four years and had the privilege of meeting dozens of wealthy investors. Each one different and unique, but many had similarities that I admired. I really enjoyed conversations with them.

    I actually purchased my home from one gentleman who resides on Marco Island. Interesting, swell gentleman he is. I believe he's about 85 yrs old now. He was actually going to let the City take back the house because he refused to pay the 3 yrs back taxes( never put 'good money to bad money' he'd say)....so....I took care of that problem for him ;). All our correspondences were via phone or mail (letters he typed on a typewriter). I still have them.

    Something I learned on my own many years ago, and is mentioned in another thread, is 'mirroring'. I didn't know what it was called...I just did it. My body language, posture, choice of vocabulary, etc., changes depending on who I'm speaking with. It always seemed to make a nice connection doing that.

    Absolutely. One man loved his custom made imported suites from Italy, one woman her full length minks and purse collection (many from Ebay lol) but very few jewelry pieces, one man his skiing trips at his cottage in Vale, one man his pink custom made convertible....something or another lol.

    I could go on but great stuff guys, really great. Thanks.
     
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  18. AllenCrawley
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    Here I'm going to point to a few Luxury Daily articles worth reading regarding Instagram and Pinterest. These two social media platforms seem to be where a lot of affluent "hang out" online. I'd suggest following some Instagram and Pinterest accounts that not only are your competitors but also any company/brand that markets to the modestly rich to ultra rich.

    Brands must radiate emotion through imagery

    Swarovski drives holiday retail traffic through pinterest and instagram contests

    Instagram registers 15x more engagement than facebook
     
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  19. AllenCrawley
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    As you know J.Peterman is one of my favorites as they do an amazing job telling stories about their product. However, they have really dropped the ball when it comes to social media engagement. Here is an interesting article on how they should be leveraging social to engage their market and make more sales.

    J.Peterman Quest for Social Engagement
     
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  20. AllenCrawley
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    Number of luxury consumers to reach 440 million by 2020.

    "Luxury consumption will grow organically over the next 10 years with overall spending growing from approximately $985.5 billion today to almost $1.2 trillion in 2020, according to a new report.

    Consumers will be the main driving force of this growth, with the number of luxury consumers rising from 380 million today to 440 million by 2020. This presents an opportunity for luxury brands if they know how to market to core luxury consumers as well as new consumers, since they require diversified strategies.

    “The luxury sector will continue growing with an additional $202.5 billion personal luxury growth by 2020,” said Antonio Achille, partner and managing director at Boston Consulting Group, Milan, Italy.

    “Two-thirds of the next-decade growth will be organic, with today’s markets and today’s stores,” he said. “This is very different from what happened in the last decade, where sector growth was mostly achieved by opening new stores, being it’s in new emerging geographies, chiefly China, but also Russia and Brazil, or adding stores in traditional luxury markets, such as Europe, the U.S. and Japan."
     
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  21. AllenCrawley
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    Luxury Brands Need to be Digital

    "According to IBM’s Digital Analytics Benchmark report, online sales were up 10.3 percent in fourth-quarter 2013 compared to the year-ago period.
    [​IMG]

    In addition, the report found that mobile accounted for 35 percent of all online shopping traffic, which represents a 40 percent spike from fourth-quarter 2012.

    Overall during the 2013 holiday season, mobile sales represented 16.6 percent of all online sales, up more than 46 percent from the comparable quarter in the prior year.

    Not surprisingly, the affluent are playing a big role in the overall digital shopping trend.

    According to Ipsos’ monthly Affluent Barometer in November, spending among this group was tracking 10 percent to 20 percent ahead of 2012.

    Like a majority of seasonal shoppers, retail and electronics topped this group’s holiday wish lists. But strong interest extended across a variety of categories, with comparable figures pointing to high-end luxury items.

    According to Affluence Tracking Study #24, 33 percent of the affluent surveyed said they asked for fine jewelry/watches during the past holiday season.

    Luxury apparel was not far behind.

    Unlike flat screen televisions and the latest toy fads, these big-ticket items did not see huge price reductions, and were not part of any retail stores’ door buster incentives.

    These are not the same type of items that the average shopper fought for after they finished their Thanksgiving turkey. These lavish gifts are typically given thoughtful consideration.

    Yet, the brands selling these items need to rethink how they reach potential buyers, and going digital is key.


    Though luxury shopping is often as much about the shopping experience as it is the purchased item itself, luxury brands should consider the brand experience beyond bricks-and-mortar.

    Today’s digital landscape offers luxury brands extraordinary tools to effectively show-off their products.

    Innovative ad units such as the IAB Rising Stars afford marketers the opportunity to integrate video and have interactive product tours and relevant content within the ad units, creating an engaging experience that can easily be shared across a consumer’s social network.

    Of course, engaging content, not ads, motivates consumers to share with their personal networks.

    Brands that create videos which capture our imagination will reap the benefits from the increasing socialization of media. It is not about selling a product. It is about telling a story.

    While video is still a relatively new ad model, it appears to be working.

    Interestingly, the affluent audience, notorious for being the hardest to reach in traditional channels such as television, finds video to be the most effective form of digital advertising.

    According to Ipsos, 41 percent of affluent consumers said they took an action after seeing a video ad. What is more, research shows video ads increase purchase intent five times more than standard banner ads.

    Smart call
    Deloitte anticipated that mobile and social would play a large role for holiday shoppers across income brackets this past season.

    Seven in 10 consumers said that they planned on using their smartphone for a variety of purposes during the holiday shopping season, such as finding store locations (56 percent), researching prices (54 percent) or getting product information (47 percent) than to shopping or browsing products online (45 percent).

    Forty-five percent of respondents said they would use social media during their purchase consideration for things such as gift ideas (48 percent), discount research (44 percent), product reviews and recommendations (40 percent), browsing products (37 percent) and checking out what family or friends desired (35 percent).

    IBM’s numbers backed this up, revealing that traffic to retail sites from smartphones made up 21.3 percent of all online visits.

    In addition, tablets brought in 11.5 percent of all online sales, with transactions on tablets averaging $118.09 per order.

    The IBM report also revealed that shoppers referred to retailers by Pinterest spent, on average, $109.93 per order.

    Facebook leads saw an average of $60.48 per order, but the online giant managed to convert visits into sales 3.5 times more often than Pinterest did.

    This broadening shopping community offers brands the opportunity to reach consumers at all stages of their lifecycle.

    Luxury brands, in particular, can capitalize on these channels to extend the VIP in-store customer experience, bolster their exclusive brand identities and offer further incentives for customers splurge.

    WHAT ALL OF this tells us is that, despite the significance of the bricks-and-mortar luxury shopping experience, affluent customers are flocking to online commerce, and brands are going to have to catch up to those trends to make the most of their revenue potential this year."


    Source
     
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  23. AllenCrawley
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    "The survey of 249 luxury brands finds that 93% are currently on Instagram, up from 63% in July of last year. And while it is just one-tenth the size of Facebook (which acquired it back in 2012), it has 15 times the level of user engagement that Facebook does. And Pinterest, about a third of Instagram’s size, has only about a third of the level of engagement that Instagram users do."

    "Instagrammers are also highly coveted by luxury marketers -- 90% are 35 or younger; 68% are women; and affluent. (The report says 16% of online adults with income of more than $75,000 are using Instagram.)"

    Source: For Luxury Brands, Instagram Blow Away Pinterest


    ==================

    How I rank social platforms for marketing to and engaging the affluent:
    1. Instagram
    2. Pinterest
    3. Facebook
    Be sure to check out Instagram for Business Blog.
     
    Last edited: Feb 20, 2014
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    Israel
    Rep Bank:
    $4,617
    Allen - i think we are soul brothers... i could have written this myself.
     
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  25. TedM
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    TedM Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

    Messages:
    817
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    Joined:
    May 21, 2013
    Location:
    Israel
    Rep Bank:
    $4,617
    Yes! I spent a ton (for me) on branding before I started anything. Wear a tux, even if it's rented and you drove a '74 Chevy to the party (just park it around the corner).
     
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