Archive for the ‘Real Estate’ Category

Attracting the Affluent Through Smart Offers and Targeting

Wednesday, May 17th, 2017

alc_wealth_window_luxury_credit_card-300x198As we all know, the battle to attract affluent consumers can be intense. Naturally, having great consumer insights is key to winning. Therefore, it’s valuable to understand what strategies credit card companies are using to acquire new customers, since card marketers have a very rich understanding of consumer behavior and spending habits.

So what’s happening these days in the credit card category?

While American Express has long been a dominant player, and continues to innovate, other financial institutions are realizing the value of affluent consumers and have developed prestigious cards with rich rewards to attract them.

In November, Chase made a concerted effort to attract affluent customers using powerful data strategies and highly-lucrative acquisition offers for the launch of their flagship card: The Chase Sapphire Reserve. The card offered an unprecedented 100,000-point sign-up bonus, plus many concierge-level benefits. It worked. Within months, 900,000 people applied for the card, despite an expensive $450 annual fee. (In fact, the acquisition appears to have been too rich: Chase has since reduced the sign-up bonus to 50,000 points.)

Not to be outdone, U.S. Bank recently released their own luxury card. It features a sign-up bonus of 50,000 points as well as many of the same travel-oriented benefits that made the Chase card so successful.

American Express, the longtime luxury leader, also responded to category activity by increasing the benefits of their Platinum Card.

So… what can we learn from credit card marketers?

The bar to attract affluent customers continues to increase. Luxury brands are willing to entice consumers with ever-increasing offers and enhanced services. However, given the increased costs of these services, brands must be really smart about their data targeting and offer strategies.

Hopefully, you are deploying new, smarter data strategies – aligned with consumer wants and expectations – to build your business. As always, we at Wealth Window, are here to help you pinpoint the exact customers, exhibiting the exact behavior you need, to craft messaging that will resonate effectively. My prediction, if you use Wealth Window, success is in the cards for you.

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.

How will Donald and Melania Trump Impact Luxury Brands?

Wednesday, November 16th, 2016

Photo Courtesy of People Magazine

Photo Courtesy of People Magazine

History suggests that America’s first families often have significant influence over the purchasing behavior of Americans and people around the world. This was certainly the case when John and Jackie Kennedy brought their sophisticated and affluent style to the White House, replacing the rather conservative, 50’s era style of the Eisenhower’s. (Tuxedos anyone?) Ronald and Nancy Reagan brought Hollywood glamour to Washington—an obvious departure from the homey style of the Carters. (Oscar de la Renta and Bill Blass certainly benefitted.)

And now, Donald and Melania Trump are bringing their lifestyles of the rich and famous to the White House, and, let’s face it, the Trumps have never been shy about the media. This begs the question: How will their affluent, opulent way of life influence luxury brands and spending on upscale goods and services?

Here are some questions that are on my mind – and probably yours as well:

 

These are just a few of the questions that will be answered over the next few months, and during the Trump presidency. But one thing seems certain, the rich will get richer, and smart marketers should be thinking about how to leverage this unique opportunity.

If you think there’s a trend you can capitalize on, let’s talk. I’d love to hear your thoughts.

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

Follow the Money to Cuba

Friday, January 16th, 2015

Wealthy Americans will capitalize on softening relations with Cuba in travel, real estate and import/export.

Wealthy Americans will capitalize on softening relations with Cuba.

With the loosening of the US embargo on Cuba and the removal of many travel restrictions, you can be sure that wealthy Americans will quickly take advantage of new opportunities. First off, many are clamoring to travel there right away. According to an article published by the Associated Press, “The few US companies facilitating travel to Cuba say inquiries have exploded since December.”

Additionally, with the easing of restrictions to certain sectors of trade and investments, Cuba will be attracting investors who want to get in on the ground floor of what could become a complete lifting of the embargo in the future.

Other Financial Implications of the Softening of Relations Include:

 

The News Has the Art World Buzzing

This formerly isolated nation simply bursting at the seams with creativity is seen as the next hot market in art. In a recent two-week period, a record $2.3 billion of Cuban art was just auctioned. According to Alberto Magnan, a Cuba-born NYC Gallery owner, thawed relations will have a huge impact because Cuba was a limited market in terms of who was even able to see the art. “That number now will become huge,” he said.

Opening the Flow of Luxury Goods

Trade restrictions with Cuba have been eased allowing agricultural equipment, building materials and goods for private-sector Cuban entrepreneurs to be exported from the US. Import restrictions have also loosened, with licensed US travelers authorized to bring Cuban goods (read: cigars) back to America, purchased with their US credit and debit cards. You can bet that wealthy opportunists will capitalize on the friendlier relations between Cuba and the United States.

Real Estate Investment Will Surge

It’s just a matter of time when Cuba opens up completely to American tourists and accommodates their penchant for luxury accommodations. “You’re going to see American hoteliers doing their best to find potential properties in Cuba,” says Steve Loucks, Chief Communications Officer of the Travel Leaders Group. “Four-star resorts don’t go up in a day…but we’re very positive about the potential.”

The good news for marketers is that Cuba is close and now you can have the cigar. You just need to get that message into the hands of wealthy travelers and affluent investors.

Marketers without Borders

Thursday, September 11th, 2014

Directly tap into global wealth by targeting affluent consumers around the world

Global email and mailing lists of affluent consumers, investors, travelers and donors can help grab international, luxury brand market share.

The rise in global affluence has expanded demand for luxury products and services well beyond the United States. Just as brand name retailers have literally opened the doors to new stores sited in strategic international locations, direct marketers can also capture international market share by driving foreign customers to their websites by both email and direct mail.

Through the convenience of online shopping, many etailers are shipping worldwide. Fundraising for worldly causes has spread to donors all around the world. Investors overseas are flocking to U.S. markets. And international travel is skyrocketing among the nouveau riche in many countries outside the U.S.

But thus far, acquiring new customers, donors and investors from afar has largely been a passive process, whereby people from other nations are searching and finding what they are looking for online. In luxury brand marketing, it is essential to establish brand loyalty early on because, well, customers tend to remain loyal. So now is the time for marketers seeking a bigger slice of international market share to take their message directly overseas to international consumers of means.

As Media Post reports, favorable exchange rates, affordable home prices and rising affluence abroad are driving international buyers to American real estate investments. This tells me that there is a large international audience out there with capital to invest and who are most likely frequent fliers.

Therefore, the first two upmarket sectors that come to mind for direct marketing to the world’s wealthy are:

1. Luxury Travel

Global jet setters are searching for:

 

2. Financial Services

International investors are seeking:

 

All luxury marketers can generate brand appeal among the über-wealthy in numerous countries that are home to a growing number of affluent consumers — China, France, Germany, Italy and the United Kingdom to name a few. Utilize  email as well as international postal mail to seize the opportunity to establish brand preference among the world’s elite investors, first class travelers, luxury shoppers and major donors.

Home is Where the Heart (of Young Affluents) Is

Thursday, May 29th, 2014

marketing to young affluents investing in real estate

Young Affluents are investing in real estate.

After witnessing the Wall Street meltdown and their parents’ nest eggs crack open during the recession, Millennials are keeping their money close to home as in…their homes. For Generation Y, buying real estate appears more safe and less volatile than the stock market for good reason: home prices have come back to earth and interest rates remain very low.

There are more young affluents ($100K+ HHI) than in previous generations and this expanding group of real estate investors are buying more expensive first homes and investing in second homes. It helps that interest rates are even lower for jumbo mortgages over $400-$600K depending on the area.

Key findings among young affluents from a recent study include:

 

Gen Y home buyers are behaving very differently than their parents:

 

By some accounts this is the hardest-to-reach, but freest spending generation, which is why marketers should simply reach them directly via mail, email, telephone and online.

Yes, many are finding themselves marginalized in a difficult job market. But there are numerous “Young Affluents” who’ve landed high-paying jobs, profited from stock options and/or benefitted from the passing of wealth from the previous generation to theirs. This is the group driving the luxury real estate and upscale home renovation markets today.

 

Sourcing the Right Crowd for Investment Opportunities

Tuesday, April 22nd, 2014

crowdfunding investors

Crowdfunding is giving accredited investors direct access to entrepreneurs.

There’s a whole new level of crowdfunding and participants are looking for big returns, not just mentions or prizes. Let’s call it “crowd-investing.” It’s quickly taking shape in real estate as many investors are jumping onto new real estate crowdfunding platforms.

Through a provision in the recent JOBS act, entrepreneurs can now advertise private investments to accredited investors who earn at least a $200M annual income and possess more than $1 million in net worth.

Earlier this year Realty Mogul announced a $9 million crowdfunding round whereby  accredited investors pooled their resources and bought shares of investment properties. It’s similar to investing in Real Estate Investment Trusts, but unlike REITs investors know specifically what they are investing in such as office buildings, retail space and residential properties. In addition to investment returns, investors can claim real estate depreciations on taxes.

Forbes has gone as far as suggesting that crowdfunding may reshape the whole real estate investment model. Where entrepreneurs traditionally had to raise capital through banks or professional investors, they can now go directly to people with money to invest. This democratizing of the process allows individuals outside of institutional funds to invest in real estate properties paving the way for entrepreneurs to more easily secure capital.

A similar sea change is taking place in the entertainment world where accredited investors and high net worth individuals have the opportunity to back a movie. The film investment company Junction has been called “Kickstarter for the rich” and rewards investors based on their contribution to a film. Two films currently funded by Junction include some big Hollywood names — A Hologram for the King starring Tom Hanks and Triple Nine starring Chiwetal Ejifor, Kate Winslet and Woody Harrelson.

As in real estate, filmmakers can take their projects directly to people with money to invest thereby accessing capital more quickly than seeking bank loans or the backing of a big studio. The holy grail of this type of investor is the “angel” who’s willing to stake a filmmaker whatever it takes to get the movie produced. In many cases, the investors can play a role in the film making process.

A few recent developments have made online crowd-investing possible.

1)   The SEC lifted a decades-long ban on general solicitation. Prior to this, entrepreneurs could not try to raise money from investors with whom they did not have an existing relationship.

2)   Self-directed online investing has become the norm that entrepreneurial companies can capitalize on by pooling money from individuals who buy shares in the company or specific projects.

3)   Through new web platforms, investors can browse and screen investment opportunities, view details of the investment and sign legal documents online.

The key to success in crowd-investing is acquiring and retaining a list of accredited investors open to the concept of crowdfunding, which is no easy task. Before you solicit funding for investment opportunities via mail or email to a prospect list, make sure you ask two very important questions of the prospect data provider.

a)    Do you have accredited investors?

b)    Do these investors have a history of making crowdfunded investments?

Marketing to accredited crowdfunding investors will make all the difference in your ROI. Finding an angel or two among the group willing to bankroll a project can quickly spell success. These types of prospective investors are very difficult to identify, but when you do, they can send your operating capital through the roof.

 

 

Mega Mansions on the Rise

Monday, March 19th, 2012

As most home buyers look less for the triple story foyers (to save on energy bills), and more for single story houses (where they may live the rest of their lives), there continues to be a segment of the population that’s way over the top in new home construction.

They’re the “Mega-Mansion Owners” and for them, bigger is better. Check out this MarketWatch clip and you get the idea. While most homes being built today fall under 3,000 square feet, mega-mansions are 10X that size. The downturn on breaking ground for these massive home projects has disappeared over the last two years.

Not all Mega-Mansion Owners are NFL starting quarterbacks either. They’re investment bankers, business moguls, entrepreneurs, CEOs, celebrities, and heirs. They need the space to accommodate gyms, theater rooms, game rooms, bowling allies, dance studios, and walk-in closets the size of my living room! Their lush landscaping showcases ponds, boat docks, swimming pools, pool houses, sauna baths, outdoor kitchens and perhaps helicopter pads.

They like innovative green technology like solar panels, geo-thermal systems, and low flow water systems. Many have an electric vehicle in their five car garages. Why? Because they can.

Oh if only you could land a spot on their preferred vendor list. How could you get in front of them? Where are these mega-mansions? How can you reach them?

I’m glad you asked – or that I asked for you.

We’ve already created a segment of them on our Wealth Window file Mansions, Estates & Luxury Homes.

Homes on this file are valued at $1 million or more. Over 100,000 are valued at $2 million and higher. Some are in gated communities. Others are in remote locations where no one else can find them but ALC’s wealth identification team. Wherever they are, we can bring you to more of them than any other source. More than 25 upscale marketers in the real estate space are successfully reaching out to these uber-luxury real estate investors.

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