Mastering Marketing: Ultra High Net Worth Individuals

UHNW Marketing, an introduction

Ultra-high-net-worth individuals (UHNWIs) form one of the most exclusive global groups. A UHNWI possesses net assets between US$30 million and one billion. Globally, there are 295,450 UHNWIs with a median net worth of $52 million. It's crucial not to confuse UHNWIs with other wealthy segments, such as billionaires, very-high-net-worth individuals, and high-net-worth individuals, as each group exhibits distinct behaviors, interests, and purchasing habits. A comprehensive understanding of each audience is vital when developing strategic marketing campaigns.

To effectively target UHNWIs, it's essential to know who they are, where they're located, and their interests and spending habits. The number of UHNWIs is on the rise, with emerging markets presenting exciting opportunities for luxury brands aiming to engage this exclusive, niche audience.

Remarkably, the proportion of UHNW women is skyrocketing. By 2020, there were 30,135 UHNW women globally, representing 10.2% of the UHNW population, compared to just 6.5% in 2016. This growing segment makes marketing to UHNW women a central aspect of any luxury marketing campaign, particularly when targeting Millennials.

Wealth accumulation takes time, and the average age of the global UHNW population is 64, with over half being between 50 and 70 years old. Only 12% are younger than 50. The average age of a female UHNWI is 62.7 years, while the average age of a male UHNWI is 63.7 years.

UHNW KEY LOCATIONS

The United States holds its position as the world's primary wealth center, while Asia surpasses Europe as the second-largest UHNW region, leaving Europe in third place in 2020. This shift is due to prolonged lockdowns impacting businesses and everyday life. Approximately 74.9% of all UHNWIs reside in the top ten countries: the U.S., China, Japan, Germany, Canada, France, Hong Kong, the U.K., Switzerland, and India. However, 44.3% of UHNWIs base their primary businesses in the U.S. or China, leading many brands to focus their luxury marketing campaigns on these countries.

The U.S. is projected to maintain its position as the world's leading wealth hub for the next five years. Still, Asia and Australia are expected to experience the most rapid growth in UHNWIs, according to Knight Frank's 2021 The Wealth Report, with anticipated increases of up to 38% and 27%, respectively. This growth will be driven by Indonesia (67%), India (63%), New Zealand (52%), and Mainland China (46%). By 2025, Asia-Pacific is predicted to account for almost a quarter of the global UHNWI population, marking a 17% increase compared to a decade prior. Other countries witnessing growth include Japan, Hong Kong, and Switzerland. Companies offering high-value products and premium services must continuously perform due diligence as new and emerging markets arise, ensuring marketing campaigns are accurately targeted.

UHNW WEALTH ORIGINS

Self-made wealth continues to rise, with self-made UHNWIs accounting for 75.5% of the global ultra-wealthy population in 2020, marking a 6% growth since 2016. This trend results from shifts in the global economic landscape, including the significant rise of enterprise opportunities in emerging markets and technological advancements enabling rapid new wealth creation. Consequently, individuals with purely inherited wealth now represent only 7.4% of UHNW individuals – a 4.3% decline from 2016 levels.

UHNW LEADING INDUSTRIES

In 2020, UHNW wealth associated with business and consumer services (+0.8%) and non-profit and social organizations (+0.1%) experienced growth, while wealth linked to banking, finance, hospitality, entertainment, and real estate declined. Two-thirds of the UHNW segment is over 70 years old, but UHNWIs under 50 saw their wealth grow the fastest in 2020. This growth is primarily due to their involvement in consumer services and tech industries, which flourished during the pandemic. Technology accounts for a significant portion of wealth in 2021, with many individuals' fortunes skyrocketing as digitalization became indispensable.

UHNW PREVALENT PERSONALITY TRAITS

Understanding UHNWIs' psychology, including their thoughts, feelings, and behaviors, is crucial for developing luxury brand marketing strategies that resonate with this audience. According to Business Insider, UHNWIs exhibit high levels of mental stability and conscientiousness, demonstrating self-confidence and exceptional tolerance for frustration. However, agreeableness is a weak personality trait for UHNWIs, who often stand by decisions that others may disagree with.

While UHNWIs tend to be rigid in their thinking, their high levels of antagonism contribute significantly to their entrepreneurial success. Due to their extraordinary ambition, ultra-wealthy individuals often gain the trust of business partners and investors more easily than others.

This affluent group is also highly extroverted, allowing them to feel comfortable standing out and pursuing unconventional paths, contributing significantly to their success. UHNWIs are also open to new experiences, often considering how new ideas could work and maintaining strong beliefs about the importance of continuously broadening their knowledge. While UHNWIs share similarities in broader personality traits, combined research from our agency and Wealth-X reveals that UHNW women differ considerably from their male counterparts. This distinction necessitates careful crafting of digital marketing strategies to align with the target audience's personality traits.

Unlike UHNW men, who rarely contemplate or express their emotions, UHNW women are more emotionally aware of all UHNW audiences, preferring brands that use their collective influence for the greater good. UHNW women display a greater capacity for self-transcendence than their more egoistic male counterparts, demonstrating significant concern for others' welfare and resonating with marketing strategies that emphasize social gain rather than personal benefits.

In addition, research indicates UHNW men are significantly less altruistic than UHNW women and the general population. For UHNW women, empathy, philanthropy, and social responsibility are of utmost importance.

Despite their differences, both UHNW men and women set high goals for themselves and work hard to achieve their ambitious aspirations. While the general population feels 40% more content with their level of accomplishment, both UHNW men and women continuously seek to challenge themselves, try new things, and immerse themselves in new experiences.

UHNW TOP INTERESTS

Understanding the key interests of UHNW individuals is crucial for creating a tailored luxury marketing strategy. According to the Wealth X Report 2021 and recent research from our agency, while UHNW individuals with inherited fortunes tend to have a greater interest in philanthropy and art, self-made UHNWIs prefer technology. However, sports, philanthropy, and the outdoors were of significant interest across all three wealth source groups - inherited, inherited/self-made, and self-made.

Similar to UHNW personality traits, UHNW men and women also exhibit considerable differences in their interests. Unlike marketing to UHNW men, where business and sports analogies often work, UHNW women demonstrate a more balanced view of life, combining their family and business roles. Our proprietary research found that UHNW women were about 20% less interested in business, 50% less interested in investing, and 90% less interested in sports than their male counterparts. In contrast, they were four times more likely to be interested in science-related fields, three times more likely to be interested in music, and twice as likely to be interested in movies and TV, family and children, nutrition, and therapy.

NEW SPENDING HABITS OF UHNWIs

UHNWIs' spending habits are changing, and ultra-luxury brands need a strategic digital approach that engages this affluent audience across multiple touchpoints. Purchase lead-time is also crucial, as high-value products may be considered for years by UHNWIs before a purchase is made. UHNWIs spend approximately $300 billion on luxury goods each year, creating a highly lucrative market for those who can successfully engage this audience.

With more UHNWIs shopping for luxury goods online than ever before, brands that don't embrace e-commerce risk being left behind. Luxury brands must ensure their websites offer an enhanced user experience that aligns with the high level of personal customer care and attention that UHWNIs expect in-store. Adopting innovative ways to recreate these experiences digitally will provide a competitive edge to luxury brands willing to embrace the latest digital technologies.

ENGAGE THE ENTOURAGE

The entourage is a vital component of any ultra-luxury marketer's toolkit. UHNWIs employ numerous advisors, including executive and personal assistants, concierges, stylists, personal shoppers, trainers, coaches, and therapists. The entourage is typically approachable since it's their job to know the latest options in their chosen field. A UHNWI's entourage can be targeted on social media platforms, such as LinkedIn, by their job title, seniority, years of experience, location, and other identifying traits.

EFFECTIVE DIGITAL MARKETING SOLUTIONS

Digital marketing strategies must be highly tailored to reach and resonate with UHNWIs. Traditional mass marketing strategies are unlikely to engage this elite audience. Every aspect of a digital marketing strategy should be meticulously planned and executed to align with the values, interests, and behaviors of UHNWIs and drive them to action. Our agency has been marketing to the world's most affluent audiences for over a decade. We provide expert tips on marketing to UHNWIs across core services, including branding, SEO, paid media and advertising, social media and influencer marketing, CRM and marketing automation, PR, and copy creation.

BRANDING

To make a UHNWI fall in love with a brand, it is essential to create an emotional connection by appealing to their tastes and ambitions. A luxury brand must have a clear vision and understand what sets them apart. Conveying the right tone of voice and visual identity is crucial for creating an emotional engagement and building a relationship based on trust and excitement.

Before starting any creative, copywriting, or design work, Kulo establishes the company's positioning through a pre-branding discovery phase. This phase explores and defines the company's core and market position. The research culminates in a pre-branding identity document that outlines the company's vision, manifesto, audience segmentation, and customer archetypes and personas. This document is an essential preliminary tool for any luxury brand starting a branding exercise.

In terms of design and creative, a brand targeting UHNWIs must look the part. Typography should reflect the written tone, and imagery must be professional, unique, and carefully considered. Luxury brands should avoid stock images whenever possible. Content must emphasize the quality, exclusivity, and craftsmanship of a product, with bespoke being the essence of luxury.

Consistently telling a luxury brand's story across all touchpoints is fundamental to creating a strong, trustworthy connection with discerning UHNW customers. This consistency ensures that customers can rely on the quality of the brand's experience and products.

SEO FOR UHNWIs

UHNWIs tend to conduct more specific searches on the internet than broader audiences, focusing on brand, product model, or product launch date. This results in commercial and transactional terms leaning towards long-tail keywords with three to four words. Digital marketing strategies must consider the full customer journey and be flexible to reach both UHNWIs and their entourage of assistants and advisors.

More than 70% of UHNWIs use search engines for research before purchasing online. Word-of-mouth marketing is still a top factor in luxury customers' decision-making but is often combined with a Google search.

SEO specialists must approach UHNWIs with care, as they are often very busy. Using clear, concise, and straightforward language on digital platforms will be more effective than overcomplicated words that don't add value to marketing copy. Bullet points with the most important features are preferred over wordy descriptions.

Selecting interesting, niche topics that cater to the likes and interests of the super-rich sets traditional digital marketing apart from those focusing specifically on UHNWIs. Luxury marketers should regularly analyze and re-analyze audience demographics and statistics to gather information about the target audience before deciding on a marketing strategy. Approaching this audience should be done in a neutral and objective way rather than convincing them how and why to spend their money.

PAID ADVERTISING AND SOCIAL ADVERTISING FOR UHNWIS

The success of paid advertising in 2023 and beyond for digital brands targeting UHNW clients will be driven by intelligent use of data and quality experiences. The implementation of the General Data Protection Regulation, iOS updates, and Google's cookieless future have made reaching UHNWIs increasingly challenging.

In 2021, Google shifted its best practices toward paid search advertising. In the past, granularity and hyper-local targeting were highly sought-after, with the expectation that Google would reward advertisers with high click-through rates and better website engagement, leading to higher conversion rates. However, modern search now reflects the sophistication of data-driven marketing. Bidding algorithms can process and act on numerous real-time signals, making old tactics like granularity and localization obsolete. This change presents an excellent opportunity for luxury brands to maximize the benefits of automation and simplify account management, allowing advertisers to focus more on strategic elements to grow their customer base.

Despite concerns over the removal of Chrome browser cookies and iOS device identifiers, this change presents opportunities for targeting UHNWIs. Wealthy audiences appreciate quality immersive experiences and integrated campaigns. Luxury brands can now build first-party audience segments by establishing trust with their UHNW audience and engaging in mutually beneficial value exchanges, such as exchanging emails for access to more enriching content. This approach will lead to better customer experiences.

Programmatic advertising represents a significant opportunity for premium brands and should be included in any always-on media plan. Research conducted by Kulo has identified specific behavioral traits common among UHNWIs, which can be used to build bespoke behavioral segments, such as "low neurotic" tendencies, in collaboration with data partners. Combining these behavioral insights with high-quality, high-impact creatives can drive greater efficiency and engagement with UHNW audiences.

Lastly, the strategic importance of paid advertising will become increasingly apparent. Luxury advertisers must learn to leverage data and automation more effectively and combine this knowledge with specific vertical and customer-driven insights. For instance, activating paid advertising during high-profile luxury events and capitalizing on the regular seasonal calendar can enhance targeting and engagement.

In summary, luxury advertisers should focus on leveraging data and automation while integrating vertical and customer-driven insights to optimize their paid advertising and social advertising strategies for UHNWIs.

SOCIAL MEDIA AND INFLUENCER MARKETING FOR UHNWI

Social media and influencer marketing play a significant role in reaching and engaging UHNWIs. Luxury brands should maintain a strong presence on platforms popular among UHNWIs, such as Instagram, LinkedIn, and Facebook, and use these platforms to showcase their products, services, and experiences.

Influencer marketing can help luxury brands connect with UHNWIs by leveraging the power of influential personalities who share similar values and interests. Collaborating with the right influencers can provide social proof and credibility, ultimately attracting UHNWIs to the brand.

CRM AND MARKETING AUTOMATION FOR UHNWI

CRM and marketing automation are essential tools for luxury marketers to manage relationships with UHNWIs effectively. A robust CRM system can help brands track and analyze customer data, ensuring personalized and timely communication. Marketing automation can streamline the process of nurturing leads and converting them into customers by delivering relevant content and offers based on their interests and behaviors.

MARKETING COPY STYLE GUIDE FOR UHNWIS

To craft compelling marketing copy for UHNWIs, it's essential to consider their unique behaviors, habits, and preferences. Avoid using mass-market phrases such as "once in a lifetime," "popular," "spectacular," "incredible," and "amazing." Even the term "luxury" should be used sparingly, as UHNWIs view luxury as a given. Opt for words like "refined," "desirable," "exclusive," "rare," "sought-after," "sophisticated," and "advantageous" instead.

Focus your copy on the exclusivity, uniqueness, and desirability of the product or service, emphasizing exceptional craftsmanship, rare materials, and personalization. These attributes are what UHNWIs value most.

Remember that UHNWIs often prioritize discretion and privacy over ostentation, so ensure that your copy reflects this preference. When crafting copy for this audience, emphasize quality over quantity.

Keep in mind that UHNWIs are often interested in investment items. Even though they are wealthy, they've often accumulated their wealth through shrewd business decisions. Your marketing copy should highlight the desirability of the product or service, as well as the investment potential it represents. For service providers, emphasize the time savings or added value of a seamless, detail-oriented experience.

In today's world, sustainability and brand values are increasingly important, particularly for younger UHNWIs such as Gen Z and millennials. Incorporate these elements into your copy to help your audience connect more deeply with the luxury brand. However, avoid greenwashing at all costs.

Lastly, when targeting UHNWIs, adopt a soft sell approach. The consideration phase is typically longer for high-value products or services, and UHNWIs do not want to be pressured into making a purchase. By understanding and addressing their unique preferences, you can create marketing copy that resonates with this discerning audience.

THE UHNWI SALES FUNNEL

Creating an effective sales funnel tailored for UHNWIs helps premium brands guide their affluent audience through a seamless journey, from pre-awareness to awareness, interest, desire, action, and retention. Brands selling premium goods or high-value services to UHNWIs need to ensure a tailored digital presence at each stage of the high-value purchase funnel to keep the customer engaged and moving forward on their purchase journey.

While the traditional sales funnel is widely discussed in general marketing, the luxury marketing sales funnel differs in its approach and structure. The most basic version of the UHNWI sales funnel comprises three main stages: awareness, evaluation, and conversion. An SEO-centric approach to the sales funnel involves optimizing content for each stage, making it easier for users to find a brand and make a purchase.

STAGE 1: AWARENESS

Rather than casting a broad net to capture as many prospects as possible, luxury marketing for UHNWIs focuses on strategically targeting a specific audience with carefully researched content. This stage involves creating preliminary content explicitly designed for the luxury market to attract targeted traffic. Keyword research for this stage should consider users' search habits, focusing on query-based keywords that the target audience uses to find related products and services.

Google's auto-suggest, the 'People also ask' snippet feature, and the Keyword Planner tool can help discover relevant keywords for this stage. Luxury brands should primarily focus on head keywords, which are one to two words long, have high search volume, cover broader topics, and are highly competitive.

STAGE 2: EVALUATION

Customers at this stage are valuable as they are likely ready to purchase the product or service a premium brand offers. Luxury marketers need to ensure their brand ranks well in search engine results pages (SERPs) to reach this audience. High-quality content is crucial for marketing luxury products and services to consumers during the research stage.

Good SEO content goes beyond optimizing for algorithmic rankings; it should follow the EAT format (expert, authoritative, and trustworthy) to provide visitors with the information they need to progress in their buying journey. Thorough product descriptions and blog posts targeting relevant search queries can offer valuable content for users, helping a luxury brand rank well in the SERPs and reach their target audience.

STAGE 3: CONVERSION

The bottom of the funnel is the end goal for the SEO sales funnel. Visitors at this stage are serious about purchasing a product but may need an extra push from marketers to finalize their decision. This stage focuses less on keywords and more on the content that helps customers make their final choice.

If the product has been sufficiently built out, and descriptions and blog posts have been written, the focus shifts to providing relevant information not previously sought by the target audience. The final stage should ensure shoppers have everything they need to convert, which may include testimonials, case studies, or reviews, depending on the products or services a brand offers. Including ratings and reviews can also help build authority and trustworthiness online.

For UHNWIs searching for specific terms like "yacht management," providing all the necessary information in a logical format, in one place, can save them time and facilitate their decision-making process, ultimately leading to a successful conversion.

FINAL THOUGHTS

Reaching and resonating with the distinctive UHNWI audience requires highly tailored marketing strategies that address their interests, desires, values, and purchasing habits. Mass marketing tactics are ineffective for UHNWIs; instead, marketing approaches must be carefully customized.

It's crucial for luxury brands to identify their ideal UHNWI and adjust their strategies accordingly, considering differences such as targeting UHNW women versus UHNW men. This may involve segmenting and addressing distinct personality traits within this niche group.

To successfully engage this elite audience, luxury brands need to truly comprehend their preferences and adapt every aspect of their digital marketing strategy to suit. Crafting effective marketing campaigns for UHNWIs is both an art and a science.

If you require assistance in marketing to UHNWIs, consider partnering with a team of luxury digital marketing experts like Kulo. Their specialists offer comprehensive services, including branding, website design and development, SEO, paid advertising, social media, influencer marketing, PR, content marketing, and CRM, to help you effectively connect with this exclusive audience.

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