Regardless of what they collect, most collectors want to keep their collections safe. They have invested time, energy, money, and love into their collections. This means they need insurance. Any insurance agent or company marketing such a service to this specialized group needs to follow certain precepts. The Insurance Alliance of America (IAA) offers the following helpful information. This information can be utilized by any business catering to affluent collectors. It will aid in designing their own marketing efforts.
According to the IAA word-of-mouth referrals are the key to selling products or services to affluent clients. Garnering referrals means understanding the special needs of rich collectors and networking. Some of the factors insurance companies use to understand wealthy collectors are:
~Home value: affluent collectors usually own houses worth more than $1 million.
~Possessions: many affluent collectors specialize in fine art, jewelry, or other collectibles.
~Policy amount: policies for wealthy collectors usually exceed $10,000 per year.
Marketing to these wealthy collectors means being available. For example, the IAA cites the example of a collector who purchases a rare painting. Naturally, the collector wants immediate insurance coverage to protect it. Therefore, the collector needs to know he can reach the agent at any time. Often, collectors use personal assistants or managers to handle such arrangements. This means clear communication is vital.
Affluent collectors move in rarefied circles, which means networking is an important part of marketing. The IAA offers three methods to network:
Network with others who provide services to wealthy collectors, such as attorneys, accountants, and advisors.
Trade referrals with these other professionals.
Always ask wealthy clients if any of their friends, family or business associates need insurance for their collections.
The American Affluence Research Center (AARC), which is an Atlanta-based consulting firm, reports that there are approximately 150,000 households in the United States with a net worth of at least $20 million. Many of these ultra-rich are collectors. In 2008, they spent an average of $1.75 million per person on fine art and $248,000 on jewelry.
Mercedes Benz markets to collectors of cars by sponsoring fashion shows in New York City, the Master’s golf tournament, and vintage car shows such as the Pebble Beach Concours d’Elegance. These wealthy collectors buy the AMG line of high-performance cars, which is an exclusive brand within a luxury brand. Steve Cannon, who is the vice-president of marketing, says “Some owners buy 10 or 15 cars, and they have garages with multiple vehicles.”
These car collectors are looking for exclusivity. So Mercedes Benz set up a private lounge on their website, so that collectors can share information on limited edition cars.
Another promising method of marketing to wealthy collectors is by means of e-mails. E-mail lets customers move quickly on their interests. Yoyodyne’s (YD) vice-president of marketing states that the difference between ads and e-mails is energy. This means ads are passive in nature, intended for a mass audience. E-mails are personal and directed at one specific individual, who is a collector.
Collectors need information before they can act. If they don’t know an item is available, they cannot buy it. E-mails provide that information, and also provide a way to market customized offers to the buyer. Additionally, e-mails make it possible for marketers to track responses to promotions almost instantaneously. If the response from collectors is poor, the e-mail can be altered. This provides unprecedented flexibility.
For example, online auction site First Auction, started out by targeting affluent male shoppers with discounted offers for computers and other electronic items. After tracking its e-mails, First Auction realized most of its customers were female. So First Auction immediately shifted its focus to affluent women, many of who were interested in collectibles. First Auction also responded by sponsoring sweepstakes events. Winners received valuable memorabilia, walk-on television roles, and mother-daughter spa vacations.
One thing First Auction did was to maintain contact with its affluent women collectors. Via e-mail, they kept up a dialogue, which means they kept it personal. Clients received special offers and access to information that was unavailable to other collectors.
Information is an important part of marketing and selling to collectors. It is an area that is wide-open for innovation. Collectors need to know what’s out there, where it is, and how much it costs. This means newsletters, seminars, and catalogues. For example, one collector of bobble-heads discovered a rare item available in Germany. He paid a premium price for it. The only reason he was able to do so was because a friend of a friend happened to know he was a collector of bobble-heads.
This would seem to indicate an opportunity for collectors’ newsletters. The newsletter would provide information on targeted collectibles. Collectors would subscribe, thus having unique access to available items.
Of course, sellers need information about collectors too. If they want to identify, target, and market to collectors, they have to know who they are and where they are. To that end, there are a number of available resources. One is Equifax’s Niches 2.0. Equifax took their database of 115 million names and divided it into 26 categories based on income. The categories range from Zero Mobility, which is the least prosperous, to the Already Affluent. These niches allow sellers to market more readily to targeted individuals. For sellers requiring even more detailed information, Equifax offers 108 SuperNiches.
For example, the Already Affluent niche reveals the following information:
Average household income is $200,000 or more. Average age is 29. The demographic profile indicates white collar, few kids, high home value, high education, mail responsive. Interests include luxury products in the following areas: electronics, real estate, stocks, fitness, outdoor sports, culture, fashion, travel, and collectibles.
Another source for information about affluent collectors is Zunch Communications, Inc., which is located in Dallas, Texas. Zunch’s database is for collectors who have an average income of $250,000 or more. This database enables sellers to use direct e-mail marketing by sending out Opt-in promotions to the most responsive collectors. Zunch calls this Zdirect.
Affluent collectors have the time, money and desire to pursue their collectibles. They associate with other collectors and share information. They are willing to pay for exclusive and accurate information. If sellers take the time to understand the Collector’s Mindset, targeted marketing becomes much easier, and pays large dividends..