“They don’t respond to traditional marketing initiatives,” pointed out Jean-Luc Gustave, Asia-Pacific vice-president of business development for luxury at Wealth-X, an intelligence service specialising in the ultra-affluent. “You are not going to send an email to Li Ka Shing. Even if we were to give you a list of all these people, with their email addresses, you will still ask, ‘how can I engage with these people?’”
This question drove the launch of Wealth-X five years ago in Singapore, said Gustave, who was speaking at a breakfast event at the Upper House, organised by OgilvyOne. “Wealth-X is the result of bringing together two categories of people. People from the media, such as Forbes and Fortune, and people from the intelligence services—the kind who track bad guys.”
By using the type of methodology used more often by due diligence services than marketing research, Wealth-X is capable of compiling dossiers on targeted individuals. These dossiers contain information both good and bad, hard facts and softer details around their hobbies, preferences, life-events and “known associates”.
“There are about 220,000 UHNWIs in the world, representing 20 per cent of global luxury spending. These people have families, associates and friends, so globally, we’re talking about 910,000 people who have access to this kind of money, directly or indirectly,” Gustave said.
But why does this depth of information matter? Because selling to these individuals goes back to the old-fashioned methods of strong relationships. “Knowing someone perfectly means not just knowing his money but who he is," Gustave said. "If I was a wealthy person in Hong Kong, with a son who has just graduated from Harvard, your job is to know that. It might be your opportunity to approach me very personally. Perhaps I might be considering buying a house in London, or a car to celebrate his graduation. It is your chance to connect to my reality, and if you don’t know that, you have lost the perfect opportunity.”
Moreover, the wealthy in Asia, particularly in Hong Kong and China, aren’t like the wealthy anywhere else. Hong Kong, for example, has 3,000 UHNWIs, but unlike most markets, one in four of these individuals is a woman.
China too has more ultra-wealthy women than Korea has UHNWIs. Plus, the 11,000 obscenely flush individuals who reside in China are also demographically younger than any other equally privileged population in the world.
While many of these consumers embrace the same brands and accoutrements as their counterparts in the west, their motivations for spending can be quite different. As an example, the way one would sell an uber-luxury yacht (as you do) in the West would be to display it with beautiful tanned women lying on the top deck enjoying cocktails. “You can’t sell it that way here,” said Gustave. “Nor in China, Korea, Taiwan or Japan. A superyacht here is a second home or an office. The windows are closed. People stay inside. They don’t go out, and they don’t tan. To sell here, you insist on family values, on lifestyle, privacy, exclusivity. Essentially, you’re selling a lux property.”
A superyacht without a tanning woman in sight
Furthermore, China’s recent anti-corruption regulations have had a significant impact on the spending styles of these consumers. “While some may still like to show off, it’s not in the way they used to," Gustave said. "It’s also impacted their travelling habits. More are travelling to Europe, to buy stuff and to experience things they can’t experience here anymore.”
So how does a company go about identifying these individuals? And once they do, how should they approach them? The brand should start internally. According to Gustave, 90 per cent of new business comes from existing relationships and direct introductions. “We ask our clients to define their perfect client. Once we have this, we can help them identify them down to the slightest detail. Then our role is to engineer the client relationship.”
The second step is to make sure that your perfect client is indeed perfect. The “VVVVVIP” customer is not merely someone who is in love with the brand but one who has the potential to spend more. “If they are at the maximum of their spending with you, you may be treating them very well, but they don’t have the capacity to go even bigger," Gustave said. "The potential wallet share of clients you may not consider VIPs may be the factor that makes them your VIP clients.”
Once identified, often the best way to sell to these individuals is to not talk about your brand, continued Gustave. One of Wealth-X’s clients, an aviation company, approached Wealth-X to help it identify potential new private jet owners. The team worked to identify 50 out of 500 people who would be attending a conference and who had the funds to buy a private jet. It turned out most of these 50 people also had a strong interest in fashion. So Wealth-X had the private jet firm partner with a luxury fashion brand to host an event, which attracted 40 of the 50 targets. From that event, the jet company held eight follow-up demos and eventually sold five planes.
High fashion and private jets have a closer relationship than you might think. In 2012, Karl Lagerfeld held Chanel's Paris Fashion Week runway show in a private jet. Image Source.
Experiential marketing really is the area of investment showing the most returns for clients that invest significantly in it, said OgilvyOne Asia-Pacific president and CEO Jerry Smith during his session, which took place just after Gustave’s. “The next era of marketing will be won in the customer experience. It’s no longer about lush billboards and lovely TVCs. Those have their place but budgets will shift towards experiential.”
Creating that experience is of course reliant on identifying your customers. “How are you going to delight a repeat customer if they expect you to recognise them and you can’t follow up?” he asked.
This happens all too often in Hong Kong, commented Gustave. “A woman runs into a lux brand shop in TST. She’s desperate. It’s 4 in the afternoon, she has a gala dinner and her scarf does not match her ring. She whirls into the boutique with two assistants running around her and soon, she finds a ring, she buys it and she goes. She has just spent HK$1.5 million in the shop in under 20 minutes, and because shop assistants are often too polite to ask questions, no one knows who she is.”
While compiling copious files on customers won’t work for most brands, it does make a difference for ultra-luxury companies who want to build relationships with UHNWIs that are more than purely transactional, said Gustave. “It’s also about using data wisely so you don’t turn them off. Knowing when to lean forward, and to lean back.”
As for Li Ka Shing, according to Gustave, the reclusive multi-billionaire can be found outside his fortress only when he walks his dog around 4 am—surrounded by 10 very ferocious looking bodyguards. Good luck.