Who are affluent customers, and how can you best reach them? The face of the affluent is changing, according to The Ipsos Affluent Survey USA for 2015. This year, more members of Generation X than baby boomers fell into the category of affluent, defined by the survey is living in a household with a household income of at least $100,000. Affluents make up nearly one-fourth (23 percent) of U.S. households.
Although Generation X consumers (aged 34 to 50) account for 37 percent of the affluent population, compared to the baby boomers’ 33 percent, the median household income for baby boomers is much higher — $913,000, as opposed to Generation X’s $552,000.
While seniors (age 70 and up) make up just 5 percent of affluents, they boast the highest median household income: $1.42 million. Millennials aren’t doing too badly themselves: the generation aged 18 to 33 accounts for 25 percent of the affluent population, and enjoys a median household income of $516,000.
The survey notes that one-fourth of the U.S. population — the affluents — now hold three-fourths of the nation’s net worth, making them more important to marketers than ever before.
So what are affluent consumers spending all that money on? Overall, affluent Americans spend $2.7 trillion per year on consumer goods, with the largest categories (in order):
- Home and garden
- Personal insurance
- Education/electronics (tie)
You don’t have to sell luxury products or brand names to attract affluent consumers, either. Ipsos reports that affluents are open to a wide range of product price points, and are willing to shop at mass-market retailers just as much as at luxury shops. However, focusing on value (rather than solely low price) is what appeals most to these consumers. Nearly eight out of 10 agree with the statement, “Good value for the money is more important than price.” If they feel that a product is a good value, they’re willing to pay a premium price.
How do generational differences affect the way you market to affluent consumers? When it comes to behavior, Generation X consumers in the survey didn’t behave like a cohesive unit. Those under age 40 shared far more similarities with Millennial consumers than with the older members of Generation X. Younger Gen Xers are more likely to buy organic food, stream music online instead of buying it, and use social media. Generation Xers over 40, however, are more like baby boomers in their behavior.
As you might expect, affluent Millennials are far more likely than all other affluent demographics to use social media, especially Instagram and Snapchat. Affluent Millennials spend more than 10 hours a week on social media — almost twice as much as the general affluent population.
So how can you reach out to these consumers? Here are some tips:
- Since they still have lower incomes than the rest of the group, younger affluents are more likely targets for aspirational or lifestyle products. Generation X, many of whom are in the childrearing years, are likely to be interested in personal insurance and education, as well as electronics. Older affluents, especially seniors, are often focused on home, garden and travel.
- Affluent consumers increasingly value experiences over things. That’s great news if you sell adventure vacations, but what if you sell a product? A marketing message that focuses on the experiences the product can create or be part of will help you sell. For example, will your product be an important part of family traditions (like a set of fine china)? Will it inspire adventure (like a kayak)? Will it create lasting memories (like a piano the family can gather around)?
- Social media is important in marketing to most affluent consumers, but especially Generation X and Millenials. Facebook is the place to start: it was the most-used social media network for affluent consumers in all age groups.
- Remember to emphasize value — not status (at one extreme) or low price (at the other). A message of quality, reliability and trust will win over affluent consumers, no matter their age and no matter what product or service you’re selling.
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Maria Valdez Haubrich
Maria Valdez Haubrich is Chief Liaison Officer of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her company’s blog at SmallBizDaily.com.