This is not necessarily a bad thing. Of course, the amount of wealth that has fled the American consumer market during the economic downturn has no positive upside. But as marketers, the process of evaluating and reevaluating customer groups is always a good thing. While there's no need to rehash every detail, among the Ipsos findings is that the $100,000 - $200,000 demographic group has basically disappeared. That is a formidable new fact for marketers.
At a macro level, it means that what were once demographic givens are no longer solid. What do you do with that line on the spreadsheet that reads $100,000 - $200.000? There's no easy answer. And perhaps the world's answer would be to simply recalibrate marketing efforts toward a higher income bracket to account for the shift in how we define affluent. A complete audit of how your company defines affluent and how affluents are defined for each product is now in order.
Segments for affluents are simply wide open. The Ipsos report takes an admirable shot at redefining segments within the "affluent" group. It has come up with mass affluents, class affluents, emerging affluents, etc. Different income levels, age groups, spending patterns and other demographic elements define all of these. While its new definitions are worthwhile, maybe the whole notion of affluent customers by demographic isn't as relevant as it used to be.
More ideas and approaches will follow this report. Bottom line: when an analysis such as this one comes along, companies need to continue to market and test those approaches. Digital marketing affords the most opportunities to test and quickly optimize these learnings. But as we move toward more definitive approaches, we have three ideas for redefining affluence:
- Affluence has become product relevant. An affluent customer for travel is simply one that has enough expendable income to generate incremental revenue for the company. ($300,000) An affluent customer for the auto category is one that has enough expendable income to afford new (replacement) products, and possibly additional products.
- Affluence has a lifecycle. It is a recurring theme in American politics and business. As such, it must be constantly evaluated. The affluents of today are not guaranteed anything tomorrow for themselves or for your company. The business world moves too fast, and the borders of markets fall too frequently to take this for granted.
- Affluents are more important than ever to target properly. The difference between affluents and customers who simply have expendable income is wider than ever. Hit the affluent customer with the relevant message at the critical time, and the payoffs are bigger than ever. Miss the target, and you missed completely.
One thing is for sure. Affluence is a changing concept with changing values. Smart marketers will make sure they at least arrive at their new truths ahead of the next changes.