High Net-Worth individuals represent less than 1% of the world’s total population, but together account for more than 40% of the world’s total wealth.
While initially, mainly concentrated in western markets and in countries of so-called ‘old money’, now High Net-Worth individuals are spread right across the globe in cities such as Tokyo, Hong Kong, Dubai, London, Sao Paulo and Los Angeles to name just a few. Furthermore the rise of emerging markets over the last few decades has triggered the development of a class of 'nouveau riche' in the Far East and Middle East, as well as in South America.
Brands that have identified High Net-Worth individuals as a growth opportunity often face a similar question: how to enter the crowded and complex world of High Net-Worth individuals?
Our insight into this unique group of individuals highlights some key learnings:
Creating brand appeal and stand-out: Beyond mere labels of exclusivity or price thresholds that may create a perception of a premium brand, High Net-Worth individuals often show an advanced sense of brand assessment and interpretation, based on their own experiences, an advanced education and significant exposure to premium brands on an on-going basis.
The end consumer may not always be the decision maker: Depending on the category we can sometimes find that the final end consumer may not always be the individual making the purchase decision. For example, in the financial services industry, intermediaries such as family offices play a major role in the purchase decision. For premium brands, it is critical to understand deeply the decision-making process of High Net-Worth individuals to ensure that the right effort is being made in the right places.
A sense of exclusivity: Rare vintage wine, limited edition spirits or exclusive advisory services would typically create the sense of exclusivity desired by the majority of High Net-Worth individuals. Premium brands have to embed in their value proposition a set of unique features or propositions that create and convey this sense of exclusivity at all times.
Price matters…if it's worth it: Although wealthy people have access to larger financial resources, they don’t systematically opt for spontaneous purchases. The value for money is an important aspect of their buying decision-making process, even for emotional purchases. That's why the price positioning must always be defined based on the perception of the benefits (whether material or emotional).
Values and beliefs: The majority of High Net-Worth individuals would be placed in the upper part of Maslow’s Hierarchy of Needs pyramid. Typically High Net-Worth individuals would be more inclined to care about the impact of their purchase on society (e.g. fair-trade), or the alignment of brand values with their own beliefs and values. Depending on the category, brands targeting these individuals need to clearly understand their expectations and their belief systems to succeed.
Investment needs: High Net-Worth individuals are often very sophisticated when it comes to their financial needs and investments choices. Financial planning offerings must get the balance right between the technical performance of the financial vehicles, but also on softer emotional drivers, such as trust and security.