Archive for the ‘Creative Strategy’ Category

How Luxury Brands Can Win in 2017

Thursday, February 2nd, 2017

alc_wealth_window_luxury_2017Will 2017 be fabulous for luxury? We don’t know yet, but there are definitely some important trends worth considering. Let me explain…

First, on the bright side, the stock market is at record highs… consumer optimism is up… and tax cuts could be on the horizon. However, the political environment is unpredictable… there are newfound concerns about travel to the United States… and a stronger dollar could hurt the luxury category.

In the past few days, a few of our Wealth Window clients have asked me, “How can we factor these trends into our marketing plans?”

While no one can guarantee what’s going to happen to the economy overall, my years working in luxury have taught me one thing for sure: In good times or bad, certain people continue to buy luxury products and services. Granted, the makeup of these luxury consumers changes – based on stage of life, current economic/financial circumstances, and other factors – yet the ability to identify these consumers has never been more precise.

For example, we are seeing a new cohort of millennials purchasing luxury brands. These consumers don’t fall under the classic definition of wealth, yet their behavior suggests they can be the next generation of loyal, upscale customers in certain categories. For example, among these younger buyers, “experiences” – as opposed to merchandise – is doing particularly well.

Obviously, 2017 is still young. It could be a terrific year for luxury across the board, but I say hedge your bets. As we begin 2017, it makes sense to identify new segments and customized audiences most likely to buy your products as soon as possible. We can help you target highly effectively by combining discretionary spending (by amount and type of purchase) along with hobbies, interests, demographics, wealth attributes, and more.

So how can luxury brands win in 2017? To be precise, be precise.

If you’re interested in honing in on those consumers most likely to buy from you regardless of circumstances, we should talk today.

The Magic of Q1

Tuesday, January 10th, 2017

First, I hope you had a Merry BIG Christmas. I am overjoyed that so many of our Wealth Window clients reported a strong season!

As you begin 2017, I suggest you take advantage of what I call, “The Magic of Q1.”

Our experience shows that Q1 is a terrific time to test: a new strategy, a new audience, and a new channel. In fact, January and February are two of the best performing months for marketing. Additionally, if your new strategies prove successful in Q1, you can benefit all year. Conversely, if they underperform, you can cut your losses quickly.

When it comes to testing, we suggest a “Structured Spending” approach for many luxury brands: 70% of your dollars go to what has proven to work; 20% is invested behind strategies that show real promise; and 10% is allocated to dramatically different approaches that have the potential to deliver vast improvements.

Here are a couple of exciting ideas we’ve seen work for our clients:

 

Thankfully, as we enter 2017 things are looking bright. The market remains strong. Consumer optimism is high. And government policy should be advantageous for luxury brands.

Yet since markets and consumers can be fickle, you won’t want to lose any time testing innovative strategies in Q1. I’m happy to help in any way I can to ensure you experience a magical first quarter.

The Rising Tide of Mass Affluence Among Women

Wednesday, February 4th, 2015

Women are experiencing a rise in female mass affluence and are prime prospects for luxury marketers and financial service providers.

America is seeing a rising tide of affluent women becoming captains of their own ships.

Now that women control half of the private wealth in the country,* it’s time for financial service providers, luxury real estate marketers, non-profits seeking high dollar gifts, and every other purveyor of upscale goods and services to focus on them.

Over 41% of Americans with incomes exceeding $500,000 are women. By 2020, women will account for $22 trillion in spending as wealth continues to shift from men to women. There are numerous reasons for this trend. Here are the top 3 that I can see:

 
Constituting half of the U.S. workforce, women are empowered to take charge, “lean in,” and demand more pay. In fact, two out of five working married affluent women age 40-69 report that they earn the same or more than their husbands. Yet when it comes to investing, they lack confidence. An overwhelming majority say that it is important women have confidence in their ability to invest, but only 8% say they are. Clearly this presents a huge opportunity for financial advisors to specifically reach out to affluent female investors.

There’s a large and growing leadership of elite female role models soaring to new heights in formerly male-dominated business sectors. Here are just a few that quickly come to mind:

 
And that’s just the tip of the iceberg. A society where women can rise to the highest levels of net worth makes it possible for women in general to attain mass affluence. This rising class of self-made professional women is making a huge impact on the economy. It’s a force to be reckoned with and I suggest that a good start is to speak to affluent women as primary decision makers in a voice that will resonate with them.

* Source: The Power of the Purse: How Smart Businesses Are Adapting to the World’s Most Important Consumer – Women

Report from DMA2014: What’s All the Excitement About – Direct Mail?

Monday, November 3rd, 2014

Direct mail targeting affluent consumers continues to be a key driver of sales in the luxury market.

Direct mail continues to be a key driver of sales in the luxury market.

Twenty years of attending the DMA Conference (The Global Event for Data-Driven Marketers) and I’m still learning and bringing actionable new knowledge to my clients. To that end, allow me to impart some words of wisdom fresh from the floor of the show: Direct Mail is all the Rage!

I spoke with a few happy direct mail solutions providers satisfied with the current business climate. Heard that postal service bureaus are humming along. And besides meeting with rising interest in Wealth Window’s mailing addresses, I noticed increased chatter about straight-ahead direct mail overall.

Rising out of the multichannel buzzscape from retargeting to social strategy, stands the towering pillar of success that direct mail represents in direct marketing. It seems that placing your offer, your catalog or your story into the hands of your audience via their coveted mailboxes remains tried and true to this day.

People still like getting their mail and perusing it at the kitchen counter, on their couch and even in their bedrooms. You see it’s the comforting tactile feel of tearing open an envelope or thumbing through pages of a catalog that can evoke emotion. A majority of consumers even “say that receiving mail is a real pleasure.” That could be why standard mail volume is growing at 3% with marketers spending over $45 billion on this channel through the end of 2014.* And back in the early 2000s we thought email would be the death of us. LOL.

Maybe I’m just selectively perceptive, but I keep seeing articles in defense of direct mail like…

 

As Craig Simpson points out, “Direct mail has a long, proven history as a successful advertising medium. Just because there is a new advertising option available, it doesn’t mean that it will work better [than direct mail].”

In fact, nearly two-thirds of all consumers bought something as a result of a direct mail piece in 2013. Perhaps surprising is that young adults are highly responsive to direct mail. How could that be? I say that because they are bombarded by email, spam, texts, digital ads and social media, they just find direct mail to be more personal.

I’ve always known direct mail to be a key driver of sales in the luxury market. Wealth Window has been serving up the postal addresses of high net worth consumers to upscale marketers for over 36 years. Luxury Daily points out that, “Luxury marketers continue to use mail because it works and because it is easier to convey luxury in tactile form. Even Forbes states that, “mail is often the only reliable way to reach reasonably affluent males.”

Direct mail continues to perform for my mailers in every major luxury market including:

 

The digital age has ushered in a lot of big data, marketing metrics and real-time audience intelligence, which is making a huge impact on direct mail marketing as well as digital display, email, social and mobile. I strongly recommend conducting multichannel campaigns and fine-tuning as data streams in. Direct mail has always been data-driven and is designed to benefit from all the useful data it can get from targeting to creative strategy.

Now with information gathered from new media, we have more actionable insights about our customers than ever. But let’s not lose sight of the fact that the most effective direct marketing is very personal, and it does not get more personal than placing your relevant brand message right into your next buyer’s hands.

 

* Source: DM News, “Direct Mail Remains Impactful”

Green is the New Color of Luxury

Tuesday, September 30th, 2014

Affluent, eco-conscious consumers are driving the greening of luxury brands.

Affluent eco-conscious consumers are driving the greening of luxury brands.

Well not literally, but luxury brands are becoming more sustainable, spearheaded by such visionaries as Bernard Arnault, CEO of LVMH (Louis Vuitton & Moët Hennessy). He states that, “Environmental protection is not merely an issue of generosity or philanthropy. It is critical to our future.” LVMH is guided by a global charter that defines environmental protection criteria and goals. Its Environmental Affairs Department works to ensure the best ecological practices at all levels of production.

There is plenty of evidence that sustainability is a rising priority among purveyors of luxury goods…

  1. According to Fashionbi, most luxury companies locate their production houses at premium locations – i.e. “Made in Italy,” “Made in France” – thereby avoiding a larger carbon footprint associated with manufacturing all over the world.
  2. Gucci has attained the SA8000 Social Accountability Standard, which includes reduction of its environmental footprint. The company’s plant has attained ISO 14001 Environmental Certification.
  3. Greenpeace named The Valentino Group #1 in terms of Dedication to the Environment.
  4. The Copenhagen Fashion Summit is the world’s largest event in sustainability in fashion.
  5. Piaget states on its website that the company “has decided to take action to reduce our impact on the environment by using raw materials that have been extracted and processed according to the strictest standards and by implementing strong business ethics.

 

Of course a strong driver of increased environmental responsibility is the demand among luxury buyers that their brands are backed by sustainable companies.

The Luxury Institute finds that younger, more-affluent consumers increasingly seek information about corporate social responsibility. “Young consumers believe that caring about the environment is how you create a meaningful life,” notes Milton Pedraza, the firm’s CEO.

Affluent travelers are taking “eco-luxury” excursions guided by fast-growing eco-tourism companies such as National Geographic Expeditions. The Four Seasons Resort in Maui even provides eco-friendly limousine service featuring the all-electric Tesla sedan.

Luxury consumers are becoming more cautious in their choices and look not only for quality, but also to a product’s materials, how it is made and the company behind it. As more brands embrace sustainability and speak to their green initiatives, customers will become more demanding in their preferences for environmental accountability.

Oftentimes “green” products may carry a higher price tag, but as you can see, there is a market for the greening of luxury. In fact, Wealth Window has identified over 15 million “Green Affluents,” who expect their favorite luxury brands to serve as industry leaders in their sustainability practices.  These affluentials are making a positive impact on the environment by voting with their wallets.

Another Peer-to-Peer Way to Fundraise by Friendraising

Tuesday, August 19th, 2014

Friendraise to fundraise by directly appealing to friends of their nonprofit organization's donors for peer-to-peer support.

Nonprofits can directly appeal to friends of their donors for peer-to-peer support.

Nonprofits all share one thing in common: a group of committed, mission-driven supporters. These are the valuable supporters who help make every charitable cause possible whether it be helping those in need, finding cures to disease, preserving the environment or promoting political candidates. Each core base of donors shares a passion for the causes they believe in and likely share it with their peers — friends, relatives, neighbors, and colleagues.

One surefire way many nonprofits accomplish this is by hosting events whereby participants ask their friends to support them in their participation. Most of us, I suspect, support friends who run 5Ks or take on challenges like the latest ALS Ice Bucket Challenge currently taking the nation by storm. Since July 29, the organization added 70,000 new donors to the cause – most of whom are friends of individuals who already support the ALS mission, which is to enhance the quality of life of those afflicted with Lou Gehrig’s Disease while searching for new treatments and a cure.

There is another way to friendraise that few nonprofits are aware of; a way that fundraisers can also grow their base by directly engaging the peers close to each donor who have already likely been exposed to your mission. By tapping into the peer network of current supporters, an organization can access a viable group of prospects who are friends with their donors. These previously unknowable individuals may already share a positive perception of your mission by way of a credible acquaintance.

This method takes advantage of smart new uses of big data whereby donor bases can be matched to consumer databases to detect relationships with people they know and have close relationships with — parents, aunts, uncles, roommates, business associates, and next door neighbors. The data is there. It’s just a matter of how you communicate with these connections that can make all the difference.

Creatively, messaging can mention that the prospect may know someone who already supports the mission. For example, lead-in copy could go something like this:

Did you know that our mission has already attracted more than 10,000 supporters? Without them we could not have made the lives of thousands of others better. Chances are you know someone who supports us or who could be helped by all that we do. Why don’t you join them in their support and share in the rewarding experience that you are both engaged in the same cause?”

In this way nonprofits can conduct peer-to-peer campaigns by directly appealing to the friends of their current donors. In addition to acquiring new supporters to the cause, friendraising through events can become even more contagious. It’s an audience building strategy that Wealth Window Connections has already helped many organizations accomplish.

 

The Young and Rich Are Booking Travel Online by Land or by Sea

Monday, August 4th, 2014

Target young affluent travelers seeking cruise ship and adventure vacations.

Young, affluent travelers are finding their next adventures online.

Craving experiential and eco-tourism vacations, affluent millennials are handling their luxury vacation details themselves with apps, social media and websites vs. using travel agents. Taking note that over a third of them book their travels online, cruise lines are adapting their business models to appeal to younger consumers.

The fact that 80% of all cruise packages are currently booked through travel agents has cruise lines scrambling to beef up their online presence. The new generation’s growing preference for mobile booking is forcing them to also make online interactions more mobile-friendly. Visuals play a huge role in the online experience and not just as seen on travel company websites, but also across social media platforms.

Millennials are also diving deep into online vacation research, whether by land, air or sea, which is causing cruise operators to adjust their cruising experiences accordingly. Younger travelers tend to take shorter trips with groups of friends in pursuit of adventure. The perception among many is that cruises are boring and too pre-programmed. The changing reality is that luxury cruise lines are already offering packages designed for younger passengers.

Norwegian now offers cross-generational “Freestyle Cruising.” Crystal, a luxury liner, is carving out shorter segments on 12-night cruises to accommodate travelers not quite ready for longer trips. The average age of those hopping onboard for shorter stints is 10 years younger than the other guests. Many cruise lines are offering three-to-five night cruises out of South Florida while many international companies are offering cruises to party destinations like Cannes, Ibiza and Mykonos.

The bottom line for cruise lines is that they need to turn the ship around to meet the needs of a new affluent, time-strapped, thrill-seeking generation. They also need to get the message out that their new cruises are Not Your Father’s Oldsmobile. Cruise operators can counter this perception with a multichannel strategy promoting new amenities geared for younger travelers such as skydiving, zip lines and observation spheres that tower over the new ships.

Direct mail featuring groups of youthful partiers on the ship’s deck having a totally awesome time supported by email and digital display messaging can compel a group of young professionals to set sail. The key is carving out an audience of young travelers with big vacation budgets and friends wishing to join them. A combination package of Wealth Window Young Affluents, Luxury Travelers and Wealth Connections can help with that.

Let me know if I can help book your next audience of affluent young travelers!

Word-of-Mouth Marketing is the Offline Equivalent of Social Media

Wednesday, June 18th, 2014

Word-of-mouth marketing to luxury brand buyers friends and family creates buzz.

Word-of-Mouth marketing creates buzz by penetrating the social circles of luxury brand loyalists.

Luxury marketers do not sell products. They sell brand experience.

Take these three brand experiences for instance:

 

And what’s an experience if not to be shared?

The promise that luxury brands make to their customers is that they will delight in the brand experience. So much so that they will share it with their friends, their family, their neighbors, even their business associates. This in turn creates the bonus of free buzz around the brand.

In fact, positive “buzz” is actually a new metric used to measure brand popularity. “Buzz is the entirety of what consumers are hearing about a brand,” says Ted Marzilli, CEO of YouGov’s BrandIndex. “What they hear through advertising, news, friends and family helps shape their impressions of brands and whether or not they’ll consider interacting with them.”

Consumers develop perceptions and take actions as influenced by personal conversations and impersonal online interactions — the former being the holy grail of gaining credible, positive viral messaging. Luxury brand marketers strive to become part of that live conversation.

What a gold mine it would be if you could penetrate your brand loyalists’ social circles and capitalize on word-of-mouth endorsements. Presumably they’ve already been exposed to your brand’s buzz and are therefore predisposed to hearing promotions for it.

In the world of big data, it is actually now possible to identify those individuals affiliated with your customers. By passing your customer file through our national consumer database, you can attach the personal contact information of friends, family, neighbors and business associates connected to each of your customers. We call them Wealth Connections and they come with some very insightful demographic data such as net worth, income, age, and home ownership. This will allow you to produce a new unique universe of viable prospects, exponentially build scale, and heighten the buzz.

You can strategically message these customer “connections” via email, online digital display advertising and directly to their home mailboxes. Your customers have already softened the sell. All you must do is bring it on home!

Affluent Blacks and Latinos are Prime for Relevant Brand Marketing

Wednesday, May 21st, 2014

Luxury Brand Marketing to Affluent Blacks and Latinos Hispanics

Luxury Brand Marketing to Affluent Blacks and Latinos Must Be Relevant

As the percentage of the Hispanic and African American populations continues to outpace Whites in America, their ranks of six-figure earners are rising with it. Yet luxury brands are slow to recognize their growing numbers and failing to seize the opportunity to earn their business through targeted, relevant marketing.

The nation’s largest minority is rapidly gaining affluence:

 

African Americans constitute a major growth market:

 

While wealthy Blacks and Latinos may seemingly belong to the affluent mainstream, luxury marketers must:

  1. Develop strategies for directly reaching these segments of affluence and…
  2. Engage them in a culturally relevant manner.

 

By our count, there are 578,000 African Americans and 1,083,000 Hispanic Americans of very high income and net worth that luxury brands should be targeting with personalized marketing. When you acknowledge your ethnic audience with messaging and imaging that they can relate to, you can establish an emotional connection that is so essential for achieving high-end brand loyalty.

Wealthy Millennials and Boomers Are Two Completely Different Animals

Monday, March 31st, 2014

marketing to wealthy millennias and boomers

Are you marketing to a lion (Boomer) or a panther (Millennial)?

It used to be that there was old money and new money and the methods of marketing to both was relatively similar. The nouveau riche aspired to be just like the upper class. They wanted to look like them. Act like them. Be them. Everyone of means lusted after the same status symbols of wealth.

Not so today. Affluent Boomers, or today’s wealthy establishment continue to seek and display the trappings of their wealth. Today’s new rich? Not so much. Just take a look at their role models—the hoodie-clad Mark Zuckerbergh vs. famous faces of mature money, say, the buttoned-up Bill Gates.

The conspicuously consumptive Boomer millionaire is vastly different than the more modestly prosperous Millennial. They are two very different animals—like a lion (The Boomer) vs. a panther (The Millennial). The King of the Jungle struts around in full mane to appear larger and put on a display of intimidation. The panther on the other hand is the stealthy Ghost of the Forest.

Are you marketing to a lion or a panther?

If it’s the lion you seek, traditional methods of direct mail continue to work extremely well. Give it a big juicy catalog rich in photographs of luxurious products, 5-star amenities, and other ways to show off their obvious wealth.

But if it’s the panther you’re after, you need to be a little more stealth yourself. This creature is accustomed to quietly consuming personalized content relevant to their interests. You see, Millennials expect the companies they do business with to be smarter about their marketing. Marketers need to recognize the changing tastes of the younger rich and communicate accordingly. This group is more about the brand experience than putting their brands on display.

To be sure, multichannel marketing is a given in our current media jungle. But the allocation of budget in the media mix must be adjusted accordingly. Heavy up on print, supported by email and digital when tracking down rich Boomers. Go a bit easier on print and stronger in the digital and email realm when setting your sights on Millennials. Timing can be tested too. Serve digital and email messaging to Boomers by day and to Millennials by night.

Successful luxury marketers are quickly taking note of these differences in both creative approach and in the media mix. Boomer money craves status and Millennial money seeks experience. This needs to show not only in where you deploy your communications, but also in how you speak to these wildly different audiences of affluence.

Therefore, the age of your high-income luxury audience plays as big of a role in the success of capturing market share as does net worth. You can still sell the steak of your luxury brand to both generations, but it’s all in how it sizzles for each is what will make the difference.

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