The surprising answer and how it affects high-end brands.
Most marketers I know would probably agree with Peter Drucker: the aim of marketing is to know the consumer so well that the product sells itself. Yet, at the high-end of the marketplace, why do so many marketers operate on outdated myths and misperceptions about affluent consumers?
One of the recurring themes at Upward Home is the attempt to dispel myths about affluent consumers, so that marketers can both create and deliver messaging that generates a much higher return on investment.
For instance, the vast majority of Affluents created their own wealth. (Only one out of ten inherited it.) And most Affluents never really set out to be rich. They simply pursued their passions and worked hard. In other words, the wealth that they created was more of a by-product of the passions they pursued; it wasn’t an end unto itself.
So what do you think happens when the owner retires? Hang up the cleats and go to the beach? (Hint: the answer is “no.” That’s another myth.)
The facts are that most Affluents continue to work in some form or fashion when they reach retirement age. But they don’t do it for the money. CNBC columnist and Richistan author Robert Frank recently reported that Millionaires are twice as likely to keep working in retirement than the broader population.
“A third of the people polled with $1 million to $5 million in investible assets are currently working in retirement. That compares with just 15 percent of those retirees with less than $250,000 who are still working,” wrote Frank. “What’s the point of working if you’re rich enough to retire? Because they enjoy it. Nearly all of the affluent retirees surveyed said they keep working because they want to, according to a recent study from Merrill Lynch and Age Wave.”
This insight syncs with some research I saw several years ago (pre-recession) while attending the American Express Luxury Summit, indicating that 61% of respondents were still on the front lines of their business, even after becoming affluent. They simply don’t sell out and fade away.
When Affluents retire, they may take some time off. The Merrill Lynch/Age Wave study suggests that half of retirees take a couple of years as a “career intermission.” But many enter a “re-engagement” period of nine years, on average, in new or different lines of work, often motivated by important nonfinancial reasons.
Marketers of high-end home brands need to understand that these consumers remain active in life, even if they are no longer active in the specific pursuits that created their wealth. Understanding what motivates these “Active Affluents” can dramatically change the way that you promote your brand.
As Robert Frank says: Everyone needs a game to play – even when you’ve already won.