We market to many demographics. Our service and value proposition for our advertising clients is knowing the media market and understanding through experience the best media channels for reaching specific demographics. A demographic in particular that we’ve been recognized for being successful at reaching is advertising to the affluent.
Luxury marketing to affluent consumers is not as easy as geotargeting an expensive zip code with digital ads or adding a household income qualifier to a media purchase. It’s understanding the psychology of wealthy consumers and knowing how to reach them better and more strategically. So in this blog we’ll share some advertising tips for marketing to the affluent.
If you’re familiar with the books written by Dr. Thomas Stanley you may be familiar with the concept of the “Millionaire Next Door”. In his books he highlights the differences between those who appear to have a high net worth and those actually have a high net worth. Understanding the differences and the emotional ways consumers spend (or save/invest) money is imperative to knowing how to best reach your desired target audience.
Advertisers all have unique desires to reach specific groups of consumers.
Some Luxury marketing advertisers are seeking high income producers who are also hyper consumers. These advertisers often start off by describing their target demographic as simply “affluent” or by giving us a target household income to reach, but when we get through a more thorough marketing needs analysis we realize that they are actually talking about consumers who earn high incomes and have the propensity to spend on status products and brands that are badges of wealth. Let’s call that demographic High Income High Consumption or “HIHC”. HIHCs are an entirely different demographic than the “Millionaire Next Door” profiled in Dr. Stanley’ decades of research and many books. HIHC aren’t always wealthy or affluent in terms of net worth. In fact, there is often a negative correlation between their purchase of luxury items and their overall net worth. Dr. Stanley affectionately calls this demographic “Big Hat, No Cattle”. These consumers are great demographics to target for high end brands, status symbol purchases and luxury products. There is a solid ROI for advertisers seeking this demographic because these consumers are inclined to spend their high income. Think of the YOLO consumer. (you only live once) These consumers tend to be professionals like doctors, lawyers, corporate managers, etc. They invest in wine, upscale neighborhoods, fancy watches, designer shoes, luxury cars, etc.
Contrast the above HIHC YOLO demographic above with the Millionaire Next Door and you have a very different demographic which requires an entirely different advertising strategy This demographic, we’ll call High Net Worth, Lower Consumption or “HNWLC” or as Dr. Stanley would describe them, folks who have a lot of cattle, no big hat needed. This demographic is less concerned about status and glittering displays of wealth than they are about financial security and making value based purchase decisions. This demographic usually contains more business owners, teachers (Yes teachers! Who have become good investors), engineers, some sales professionals, and blue-collar trade workers. This demographic is more concerned about value, financial security and investments than they are in flashier purchases and badges of wealth.
You’d be correct in assuming that most marketers find it much easier to advertise status and luxury to high-income producing, high consuming consumers “HIHC”s than to advertise to the Millionaires Next Door, the “HNWLC” demographic. However, we have become skilled at creating advertising plans that reach each of these two very different demographics. They require altogether different media plans.
It takes more than a luxury marketing media kit showing high income to properly align media purchases with an advertiser’s desired affluent demographic. If either of these demographics are part of your luxury marketing plans for your business, we’d love to meet with you to discuss what we’ve discovered through our years of experience at successfully creating ROI producing media plans in our Seattle advertising agency.