The 2007 book Richistan by Robert Frank details the pre-recession habits of America's vast nouveau riche clientele. Post-recession, do not expect much change in their behavior. They'll still love luxury.
SEPTEMBER 2011 PUBLISHER'S PAGE REPORT
More than 90% of this country’s wealth was made after 1995. To sell to the wealthy, you need to understand the NEW rich. They are self-made, self-reliant, and independent. Getting this group hooked on being driven means trying to appeal to that independence.
For example, independent people want to open their own door. So, perhaps your chauffeurs should start asking the question, “May I get the door for you?” Make it an option. If the wealthy don’t like being seen as “flashy,” they may feel uncomfortable with a big guy in a black suit unloading a trunk. [Let’s face it, our chauffeurs often resemble beefy bouncers or stiff, formal Secret Servicemen these days].
Maybe we need to think about having them dress like the rest of the business world, i.e. khakis and a blue oxford shirt for the East Coast clients, golf or polo shirts along the West Coast.
Wealthy expected to reach for top drawer
Looking ahead, expect the world’s best education to produce the next generation of luxury consumers. In the next five to 10 years, the people occupying the nine million or so wealthiest U.S. households will keep demanding more top-drawer goods and services. A bigger piece of the country’s population — typically the 29 million households with annual incomes of at least $80,000, or the top 25% of wage earners — will consume mostly premium and some super-premium goods and services.
Makers of the priciest things will have to offer something distinctive about the way they are experienced in order to meet people’s rising expectations, advised Ron Tentel, founder of brand consultant Consumer Eyes. In part, that’s because as more people amass more money, the activity of purchasing high-end luxuries is itself becoming “a way to distinguish oneself in light of the proliferation of middle-brow luxuries.”
Customer service sets your brand apart
“Eighty percent of how to differentiate luxury brands will be how you treat your customers,” advises Milton Pedraza, CEO of the Luxury Institute. In addition, companies will need to get customer feedback and do so frequently. With so many affluent consumers online, Pedraza adds, luxury marketers will be facing a “consumer on steroids,” one armed with the speedy proliferation of critiques posted in cyberspace by fellow customers.
As the country’s wealth continues to concentrate in the households of the nation’s 78 million Baby Boomers as well, the affluent half or so of the cohort are expected to use their means to engage in fulfilling activities such as exotic vacations; fractional ownerships of yachts, jets and/or sports cars; educations; fitness and wellness; and volunteerism, including eco-endeavors.
At the same time, the well heeled among the 42 million Gen-Xers are likely to begin acquiring high-end goods and services at an accelerating clip. Gen-Xers in households in the top 25% of the country’s earners have been spending about two times more than Boomers with similar incomes on personal luxuries, according to “The Luxury Report 2010.”
Jim Taylor, president of the Harrison Research Group in Connecticut, says the wealthy slice of pie for OUR INDUSTRY is about $11 billion. We only grab $2 billion of that. In sum, we as a luxury service are not resonating with the affluent market for personal service. We need to fix that by better understanding how to think like a modern-day millionaire.