Wealthy, Affluent, Luxury — What’s the Difference?
While we enjoyed the beautiful weather this weekend, we couldn’t wait for Monday to arrive so that we could take a look at the most engaging content from the past week.
First, we’ll take a look at the reasons why we shouldn’t treat the wealthy, affluent and luxury buying groups as interchangeable.
After that, an article from The Financial Brand provides insights on the steps we should be taking to help ease the financial burden on older Americans.
Most Clicked: Wealthy, Affluent and Luxury Buyers are Not Interchangeable
Is there a difference between affluent, wealthy and luxury consumers? According to a MediaPost article by Bob Shullman, there is. While characteristics of these three groups do overlap, they should be considered three different demographics to professional marketers.
So what are some of the characteristics of these three market segments?
As depicted in the diagram below, the affluent group is made up of people whose household income (HHI) is $100,000+, while the wealthy group is comprised of people whose liquid assets total $1 million+.
You’ll notice that there is no financial benchmark set for the luxury buyer group. That is because buyers don’t need to be affluent or wealthy in order to buy luxury products and services. In fact, according to the article, 40% of luxury buyers are neither affluent nor wealthy.
Shullman’s article brings forth some interesting insights about affluent, wealthy and luxury buyers that we believe are worth pointing out.
One insight that we’d like to take a closer look at deals with how we are targeting prospects when marketing luxury continuing care retirement communities (CCRCs). In the diagram we showed earlier in the recap, the largest overlap was between the affluent and luxury buyer groups (22 million people out of 114 million).
This could be an indicator that we should be lowering our financial targeting parameters for prospective residents. Just because they aren’t in the desired wealthy target market, doesn’t mean that they don’t (or won’t) purchase luxury products.
In fact, the diagram shows that the overlap between the wealthy and luxury buyer groups is only 5 million out of the 114 million adults who qualify for one of the three groups.
So while, ideally, we’d target the wealthiest buyer group — the one with the most liquid assets to self-fund its retirement — it’s just not plausible; especially considering that wealthy buyers are actually more likely to be Millennials according to the study.
Lowering financial parameters could result in leads that are more interested in your product/service at an earlier point in the purchase journey. While they may not seem like the right financial fit for a “luxury” community, keep in mind that they may have adult children or other family members that will likely be making contributions to their retirement living costs.
Moving forward, we shouldn’t treat wealthy, affluent and luxury buyers as though they are all one interchangeable demographic.
Click here to read more about the characteristics of wealthy, affluent and luxury buyers.
Most Shared: Americans 50+ Face Unprecedented Financial Stress
The Financial Brand recently gave some news that will be of little surprise to most people: Americans aged 50 and over are facing unprecedented financial stress.
Rising healthcare costs, loans, caregiving needs and loss of benefit plans are just some of the things affecting adults 50+ in America according to Theodora Lau, financial services thought leader and author of the article.
Lau offered some solutions that the banking industry should implement in order to improve the financial lives of the 50+ demographic. We feel that these solutions are applicable to the senior living industry as well.
1. Provide integrated solutions around life events
This is one point we agree with wholeheartedly, as seen in our Social, Silver Surfers research. The 50+ market segment has become increasingly digital, and their purchase journey occurs through multiple channels (as shown in the infographic below).
That is why we always recommend multi-channel marketing strategies for our clients. While the purchase journey may start with a print ad or a display ad on a mobile device, it usually doesn’t end there.
It is in your best interest to have multiple avenues where prospects can learn about how your products and services can benefit them in the long run, especially with regards to their finances.
2. Empower consumers to establish healthy lifelong financial habits
As professionals in the senior living industry, we need to be offering prospects more than just a lifestyle and a place to live. We need to be offering them services that will help them maintain or improve their quality of life.
For example, the decision to move to a CCRC is one that will have a great financial impact. We believe that all communities should be connecting their prospects, as well as their residents, to financial planning professional who will help them ensure that they will have the assets needed to fund their retirement, as well as digital tools that will make it easier for them to track their assets.
Taking these steps are just some of the ways in which we can help relieve some of the financial stress that is currently on the shoulders of older adults.
Click here to read more about the financial challenges Americans ages 50+ are facing.