Wealth of Influence
How do you market exclusivity and "elite-ness" to the super-rich?
At a time when detractors label "traditional" media, particularly newspapers and magazines, as yesterday's media, it seems almost counter intuitive that a number of lifestyle magazines should be launched internationally. Yet that is exactly what is happening.
Some recent launches include T, the new weekly premium style magazine from the International Herald Tribune, and Intelligent Life from the Economist which covers fashion, travel, gadgets and premium lifestyle issues and interests. These will be followed later this year by a new magazine from the Wall Street Journal. Should these prove successes, others will surely not be far behind.
On the surface it seems odd that publishers which have experienced declines in print readerships attributed to growth of the internet, would now venture into the glossy world of upscale lifestyle magazines. Surely they should be focussing more on their websites than further investments in print? Should they not be working on delivering their content faster and in more accessible mobile formats? Are they not aware that their ultra-upscale readers are highly internet literate and short of time, and the last thing that they need is another magazine to read?
Is there some insight behind these launches, that to engage with and market to the super rich requires a partial departure from conventional thinking? F. Scott Fitzgerald famously wrote "Let me tell you about the very rich. They are different from you and me." Does this still hold true?
There is perhaps now a sense that the growing, international audience of the super affluent has reached a new level. These consumers have been underserved for years, lacking exciting modern titles designed specially for them and their lifestyles. With more and more people joining the ranks of the plutocratic, with their very high disposable incomes and desire to spend, maybe variables such as critical mass, consumer mindset and social climate have all combined to bring this market to a new level.
Or is there a more cynical explanation, namely that publishers have seen huge growth in brand advertising across categories such as luxury watches, accessories and fashion in the last few years, and have decided on a new way to grab as much of this as they can? Actually, it all really comes down to one key question - are the super-rich truly different when it comes to creating exclusivity and desirability for luxury brands?
How do you gain insights on the lives of the super-rich?
This is a question that has vexed many a strategist, marketer and researcher.
It is also very difficult to answer because to understand their lives, needs and wants and all the other questions that spin off these, you have get them to talk to you. By their very nature, these people are difficult to get to. And even if you get to sit down with them, the people who talk to them need to be able to relate to them and ask the right questions in the right way. Which brings us all the way back to square one, as few researchers have much experience of talking to these people - because you can't get to them!
Over a number of years, my strategic work in advertising and communications for companies such as Patek Philippe, the highly prestigious watch brand, Pictet a leading Swiss private bank and InterContinental Hotels has helped to clarify how luxury brands build desire and their reputation among these super-rich consumers. Through privileged access I have been able to spend many hours interviewing very high net worth individuals across the world, and understanding their lives, relationship with luxury brands and media habits.
Early on in this process, I frequently found that many interviewees recruited by research recruiters were not the target audience at all, but merely people aspiring to be in that target group - something else entirely - with a different mind set and motivations. Yet gaining access to the "right" people to interview is vital to understanding how to engage with them and build the right credentials for luxury brands. So you must ensure that you really are talking to the genuine article and not the wannabes.
Why are they such a difficult group to understand and research? Well quite simply it is because the truly rich and affluent do not tend to take part in any kind of market research. No amount of incentives will persuade a discerning genuinely super-rich person to spend an evening with strangers discussing his or her habits, hopes or fears. Nor are they willing to fill in any type of questionnaire unless it is on a topic of high interest to them.
Yet research, particularly qualitative research, is a vital tool for understanding the subtle differences in the perceptions of luxury brands and how to shape these perceptions. This applies also to the role that different media play in their lives and how media choices can influence and help to build or destroy the exclusivity and image of luxury brands.
However, before turning to review these insights it is important to examine some basic characteristics about the lives of the super affluent.
I define the super rich as people who at minimum are in the top 5% of the population in their country in terms of their wealth (and are often in the top 1or 2%). Typically these individuals are, or are married to highly successful corporate or professional individuals. And yes, they also tend to fit all the clichés. They are cash rich, time pressured, boast international lifestyles, multiple homes and staff, and can to own the best and the latest in any category they want.
Creating elite-ness and exclusivity
The super rich can afford any luxury branded product they desire. But what adds greatly to the desirability of that brand or product, is not being able to get it. Genuine rarity and unattainability has a particular appeal for this group.
To possess something that your peers covet and cannot get, but that you managed to - be it fine art, rare fine wine, or the latest virtually unattainable watch - brings immeasurable prestige and reward to the owner.
True rarity cannot be faked or artificially created by marketing departments through pretend waiting lists. When the whole world knows that Victoria Beckham can have any Hermès Kelly bag in any colour at any time, the myth of the two year waiting list is instantly destroyed.
Another key element which cannot be faked or bought is that of peer group buzz and approval. In the world of the super rich, if your peers recognise or recommend a particular brand that is the most powerful and critical part of the status and acceptance of that brand. Whether it is them liking your new accessories or thinking that Verbier is the destination, their judgement and approval are paramount, and likely to drive your own purchase decisions.
The role of media and advertising
On the whole the super rich tend to have extremely complex lives, so their media habits are all about editing choice. Yes they may enjoy the content. But when it comes to shaping and driving brand perceptions, editorial and advertising are key tools to guide choice.
So how do the super rich consume magazines? Well they don't read glossy magazines such as Vogue or The FT's How to Spend It because they represent an aspirational life. They read them to help them chose their shopping list across relevant lifestyle categories. They need and want to keep up to date with the latest luxury hotel openings across the world or the best of the most recent premium gadgets. In a world which has seen a proliferation of offers of luxury brands across all categories, it is almost impossible to make the right brand choices without some trusted and easily accessible advice. In short, when you can have most luxury brands you desire and you lead an extremely busy complex life, you need help to guide your choices.
As a result the super rich are likely to take recommendations from journalists they trust or magazines they respect rather than from an unknown blogger or website on the internet. Media brands like the FT and Condé Nast with their bespoke lifestyle magazines are trusted and respected by the super rich because they have a proven track record of demonstrating they know the lives and tastes of these high net worth individuals.
And if these publications are referenced by your peer group, it further reinforces the credibility of these magazines and the status of the brands that are mentioned in the editorial or that advertise in them.
So for many luxury brands a key requirement to build their exclusivity and credibility among the super rich is to have the endorsement from the editorial team of these magazines. For the majority of luxury brands the right PR is still the most important tool to drive desirability and status their brand. If Anna Wintour, editor of US Vogue, says this brand is today's must have, you can be assured that the super rich will trust her judgement ahead of many others.
Joining the elite club
Brands that advertise in these trusted titles can also receive added credibility and status simply because they are considered to be "part of the club". On the whole is it only the major proven luxury brands with strong track records of success who can afford to have a regular and significant presence in the bespoke luxury magazines. So in some ways it becomes a virtuous circle where the luxury brands that advertise and the editorial that supports them help to define and maintain the image of this prestigious club.
High net worth individuals do value the right advertising from luxury brands as it is another useful tool to help them edit and keep informed. However the super rich are not easily persuaded by advertising alone. They are instantly dismissive of brands that they do not consider to be for them. If for any reason a brand has fallen out of favour with them and their peer group (often because the brand has become too populist) no amount of advertising will persuade them to reconsider the opinion.
So what is the role of the internet for this highly internet savvy group?
So far few websites have been able to generate genuine trust from high net worth individuals when it comes to providing general authoritative lifestyle editorial on luxury brands or high interest premium categories (aside from websites owned by luxury brands groups). Whilst many of the super rich may be loyal to certain bespoke lifestyle magazines and publications, they still don't appear to have the same relationship with the online versions of those media brands.
This is primarily due to the very different experience that the internet delivers compared to the glossy, high quality magazines. Reading the online versions of their favourite media brands is certainly fast and efficient and totally of the moment. However the technology currently lacks the emotional resonance and seductive powers that relaxing with a magazine can provide. And whilst the super rich claim that one of the key roles of magazines is to help them edit their luxury brand choices, they still need to be seduced when looking at the latest designer fashion or luxury brands.
Luxury brand owners recognise that their products still look at their best and most exclusive in well produced luxury lifestyle magazines, where they are surrounded by the right peer group of advertisers and editorial.
Where the internet comes into its own for the super rich is when they want to drill down to find out more on their specialist interests such as travel, wine watches or to find out the latest collections from favourite designers.
In certain high interest areas for the super rich such as luxury watches, fine wines or art, there are some very well respected and trusted forums which can provide an extraordinary depth of information and opinions. A good example of a valued website which helps to inform a passion is Robert Parker's wine site where consumers will happily pay a subscription fee to find out his rating of certain wines.
So are the super-rich really different when it comes to creating exclusivity and elite-ness for brands?
Yes and no. Yes because their wealth gives them unparalleled choice and with that choice comes the need to create and constantly refine a "shortlist" of their most favourite, most coveted luxuries. Yes, because the elements that influence and shape their perceptions of what is true exclusivity and "elite-ness" are different to ours who can only dream of that lifestyle. And yes because they are not easily taken in by glossy marketing. However in many other ways they are not, because ultimately aren't most luxury purchases driven by irrational impulses and haven't we all come home with yet another pair of to die for luxury shoes we can't live without?