Over the past two decades, a variety of economic factors have created enormous new wealth. And for those looking to spend it, it’s about indulgence and self-expression along with a luxurious customer experience at every juncture – whether through direct contact with a live salesperson or direct marketing in the form of a catalog, brochure or personalized e-mail.
Direct marketing can be highly effective in reaching this lucrative segment – one that represents an estimated $220 billion in annual spending on goods and services. But finding or developing buyer lists for the wealthy is difficult and expensive; and existing lists are closely guarded. Another problem: The wealthy often don’t purchase things themselves; they have others find and purchase things on their behalf. Still, creative direct marketers can do several things to reach this lucrative segment.
Do your homework. Whenever possible, use market research and psychographic profiling to pinpoint your target customers and understand why they buy. The luxury segment is very fragmented. These customers aren’t all rich; some of the most engaged prioritize spending in just one category and economize in others. Identify the segment you want to connect with and focus on lists that match your tier of pricing – even if it stretches the definition of the category. A cluster analysis/study also will help identify affinities around your brand and make figuring out which lists to buy much easier.
Choose quality over quantity – every time. For direct mail, that means sending fewer, more meaningful, high-quality pieces that do one thing well. When sending to a subscriber list, concentrate on inspiring the recipient to engage with your brand on some level, driving interest rather than sales. For your own and other buyer lists, where you know recipients have a track record of spending, you can focus more on communicating newness and innovation.
Develop a strategy around reviving your “expired” list. The luxury population is so small that many times it is much easier to woo back an ex-customer than to find and engage a new one. In communicating with this list, be sure to place the emphasis on what makes your luxury brand special and different from the rest. Another powerful way to re-pique people’s interest in a brand is to invite them to an event, especially if it features a person of note connected with the brand and a chance for a consultation with them.
Competition for the luxury customer’s share of wallet is fierce and is expected to become more so. Reaching them effectively requires marketers to take a creative, 360-degree approach. Those that know something about this segment and take the time to be precise in connecting with them have a much better chance of capturing their attention, and differentiating themselves from an increasingly long list of luxury brands.
Suzanne Hader is principal of 400twin. She can be reached at [email protected].