How to focus business on the ultra-high net worth crowd
By DIAN VUJOVICH
SPECIAL TO THE DAILY NEWS
From Wealth-X, December 2010:
There are nearly 55,000 ultra high net worth individuals in the United States. Of those, according to the new report, more than half keep their primary residence in just five states. The top five states, in ranked order are:
- New York
Affluence is nothing new in Palm Beach and working with high net worth individuals as common as a sunny day. But decide to focus your business on the ultra-high net worth crowd and be prepared to think outside of the box.
The ultra-high net worth individual, one with investable assets north of $30 million, is really different than your run-of-the-mill millionaire. While there are literally about 11 million of those, there are only about 180,000 ultra-high net worth individuals in the world -- and roughly 60,000 live in North America, according to research from Wealth-X.
Catering to their needs requires a new kind of sales paradigm.
Jimmy Choo, for instance, recently launched a new mini-documentary sales campaign to introduce his new fall/winter line of handbags.
"Behind-the-scenes video is becoming an important touch point for luxury brands in today's social-sharing era," said Paul Farkas, founder/CEO of Social.TV in a recent online interview. "Savvy consumers want to feel connected with who runs the brand and why products are introduced into lines."
And National Geographic took a non-traditional route to promote its 24-day private jet Around the World Expeditions trip. It is mailing out a 20-page glossy packet filled with eye-popping photos and itinerary choices.
So just as the world of the ultra-wealthy isn't huge, the need for knowing that client -- or prospective client -- has become a delicate one.
"If you want to work with the ultra-high net worth individual, you've really got to understand your client and their core values, " said David Freidman, executive vice president of strategy at Wealth-X. "It's not really about selling anymore, it's about delivering what they need."
Friedman was the guest speaker at The Luxury Marketing Council meeting earlier this month at The Chesterfield. Wealth-X is an international firm that provides its clients with a wealth of information about the wealthy. But it's not ordinary information that a quick Google search could reveal: It is well-researched data that take his team days to compile.
Friedman said the company was the brainchild of its co-founder, who had been the chief information officer at Forbes Media. And, that Wealth-X was hatched after he learned there was little to no accurate research available on those with ultra-high net worth.
"Everything was model driven or out of date. Or, household profile information that wasn't relevant or could help you to develop trust when meeting with clients," he explained during a phone conversation prior to the meeting.
Today, Wealth-X provides its clients with information that must be verified by three different sources. If three can't be found, Friedman said it is referred to as "alleged."
Speaking to a packed house, he talked about three paradigm shifts that he's seen over the past year-and-a-half.
One is a shift from broad marketing customization.
"The luxury client demands customized service," said Friedman.
The second: Understand that as much as 90 percent of your luxury clients will come to you as a result of referrals.
And third: such "individuals are desperate for trusted relationships and customized experiences that meet their unique idiosyncrasies."
"Friedman's presentation provided a very interesting perspective about how to deal with the extremely affluent," said Steven Harless of Harless & Associates, certified public accountants from West Palm Beach. "He gave us a heads-up approach on addressing their needs that in some respects are like everybody else's, but their requirements are more demanding."
George Mato, director of sales at The Ritz-Carlton Residences on Singer Island, said the program showed him that "knowledge is powerfully affluent."
That said, if there's one lesson anyone seeking a client base of ultra-high net worth individuals might want to remember it's this: "Most of [these] individuals are not on Linkedin or Facebook," said Friedman.
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