Forbes reports that the next big luxury purchase among rich, single men may be the $12,500 leather belt, which has a 14-karat gold buckle and princess-cut diamonds. Why? Because as Todd Rauchwerger of J.W. Cooper says, “Besides a watch, most men don’t wear a lot of jewelry. They’ll wear a $20,000 or $30,000 watch and a $3000 or $4000 suit and a 25-cent belt buckle. Why not wear a belt buckle that goes with the rest of the wardrobe?”
The Luxury Institute (LI), a research firm in New York, did a study of rich, single men in the U.S. The LI discovered the average net worth of these men to be $2.7 million. They had an average income of $270,000 and held 45% of the aggregate annual income in the U.S. There are 4.5 million men in this category in the U.S., according to LI. They live what LI calls the “360 degree luxury lifestyle,” which means they are rolling in money. They know the difference between value and price. This means they want value and will pay top-dollar for it. In other words, they want luxury goods and services.
Sellers of luxury goods and services wishing to target rich, single men have to be flexible, altering their products and marketing to target this segment.
For example, Thomas Cook Select, a luxury travel company, offers holiday travel packages classed as Premium or Luxury. Many of these packages are targeted at rich, single men. In recent years the average age range for this market has dropped from 45 and over to 25 and over, bringing about an avalanche of growth and opportunity. Many of the packages cater to rich, single men who prefer to vacation in a place where there are no children, because they want a quiet and relaxing experience.
Thomas Cook segments their potential customers into specific groups and designs marketing targeted to each group. The marketing is based on luxury and choice. Choices offered include holiday duration, transport carriers, and alternative destinations. Customer service is emphasized as exquisite and includes free gifts to each traveler on arrival.
Thomas Cook “positions” it offerings by marketing their travel packages as “holidays with a difference.” At the same time, Thomas Cook recognizes that demographic changes are occurring. The company is planning for them. Luxury travel is moving away from “stuffy” and “formal,” and moving more and more toward “exclusive.” Many travelers want to design their own travel packages. To meet these forecasted needs, Thomas Cook is altering its offerings to target older affluent customers, those age 45 to 75, and those in the “new money” market, who are 20 to 40 years of age.
A fascinating example of marketing luxury products targeted at rich, single men is Diageo, which is the world’s leading beverage company. Diageo has many products that span the price spectrum. But Diageo concentrates on its luxury brands, treating them like precious loved ones. Some of Diageo’s luxury offerings include Johnnie Walker Blue, Crown Royal XR, Ciroc Vodka, and Don Julio 1942.
Diageo’s method of marketing bears examination. The company designed its marketing around its reserve brands, which includes 24 high-end luxury items. Diageo uses what they call “marketing disciplines” to keep their brands visible to affluent customers, many of who are rich, single men.
For one, they utilized “influencers,” who are high-profile celebrities. Diageo hooked up with Sean ‘Diddy’ Combs, because they felt he could influence a segment of their market in a powerful way. For two, Diageo has a “Guru Influencer.” The Guru Influencer is whisky expert Charlie MacLean. Wealthy customers who are “in the know” trust MacLean’s expertise, and therefore value his recommendations. For three, Diageo uses “Socialite Influences,” who are high-net-worth individuals who have lots of exclusive parties and know lots of elite people.
To these three methods, Diageo adds their Mentorship Program, which is a program that educates customers and tradesmen with the company’s unique history, its origins and the way it makes its products. Diageo also takes great care in nurturing its “Gatekeepers,” who are the bartenders. Bartenders are the faces of the company, according to Diageo, because they are the ones who sell the brand person-to-person. Diageo provides bartenders with access to special events, junkets, and free gifts.
Finally, Diageo ensures its marketing direction by being aware of changes in the market, responding quickly to new niches that open up. For example, the company is test marketing a premium rum at the present time, because they see a door opening in this area.
The result of Diageo’s marketing? There has been a constant increase in demand for luxury alcoholic beverages. From 2007 to 2009, the ultra-premium segment of the company’s market grew by 14%.
Diageo’s method of marketing is a template that any seller of luxury products would do well to emulate, because Diageo found a way to diversify its offerings without cheapening its brand. By keeping its ear to the ground, Diageo is able to detect changes in the market rather than just reacting to the changes.
Sarah Boumphrey, in her article ‘Beyond Bling,’ which appeared on 4hoteliers.com, offers the following marketing tips for appealing to rich, single men:
-The luxury market is hard to enter without careful planning and effective marketing. Of all new luxury brands, 60% fail. Brand recognition takes time, research, and expertise.
-Be sure marketing is specifically tailored to rich, single men. This means understanding the psychology of the customer.
-Studying the marketing of the uber-premium brands can offer insight in how to appeal to the “status” of the targeted market.
-Do not confuse “masstige” products (prestige for the masses) with luxury products.
-Rich, single men are looking for value and style. Value has nothing to do with price. Style carries the earmark of distinction. This means the luxury seller must maintain the unmatched imprint of its luxury products or services.