Let’s first dispel the myth that affluent consumers do not shop for deals. Research affirms the contrary. According to Nielsen Research, affluent households dominate coupon use. In 2009, for the first time, households with incomes above $100,000 were the primary drivers of the record coupon growth seen in that year. The economic downturn has since kept this trend alive. More than one-third of visitors to the Groupon and Living Social deal sites are college educated.
So, if you have a fondness for deals, you’re likely well-heeled!
Traditionally, brands and businesses are drawn to affluent consumers because of their purchasing power and disposables incomes. What’s changing — especially in a socially connected world — are their behavioral trends and dynamics. Two observations stand out:
This calls for new brand engagement strategies.
So, what changes should the brands make?
We offer five recommendations:
1. Fish where the fish are
To engage affluent consumers, brands must find them in social media. They must build and integrate social media strategies into their marketing and outreach programs. Social marketing should not be just another marketing to-do with its own budget, metrics, and outcomes. Rather, it must work across all marketing channels, augment existing budgets, and support current initiatives that drive member acquisition, loyalty, product launches, and other desired outcomes.
2. Recognize and leverage consumer influence
According to Nielsen, more than 90% of consumers say they trust their friends more than any other form of marketing messages. Consumers increasingly make purchase decisions based on the recommendations of their friends. Affluent groups, as seen earlier, are even more likely to engage socially. Marketing programs must be designed, ground up, to use this influence.
3. Think creatively beyond the deal
Economic downturns make shoppers, even affluent ones, value oriented. Shoppers and businesses alike, tend to focus squarely on the deal in such times. But this is where initiative is lost. Businesses should creatively tie their market incentives and promotions to drive reach and influence through the social connections of their affluent customers. For example, instead of giving away coupons, offer them (or higher value ones) when consumers share them with their friends.
4. Make affluent consumers your influencers and advocates
In a social world, consumption leads to market influence and influence can drive advocacy. Customers become influencers; some turn into ardent advocates. Brands must proactively find ways to foster these transitions in open and credible ways. Use strategies that offer compelling content, privileged access, or incentives to promote advocacy through social engagement and sharing. For example, Intuit launched their small business GoPayment product by offering a sweepstake whereby consumers could win an iPad when they shared a credible launch video with their friends.
5. Track and measure
Brand strategies must measure consumer influence and identify the biggest influencers, both within and across marketing campaigns. Consumer behavior is changing rapidly. Critical points on the path-to-purchase — like product awareness, reputation, engagement, trial, and purchase — happen through online social connections. Marketing programs must capture and analyze data to track and measure these points and understand the source of their influence. Identify your advocates.
For what types of businesses does this make sense?
We’ve seen numerous businesses where advocacy from affluent customers can be made to work. Here are a few:
Influence from affluents drives new business. But influence — through recommendations, referrals and advice — cannot be staged; it must remain authentic and credible. Through careful planning, execution, and measurement, brands and businesses can build this into their strategies.