Luxury Car Company Earns $1M from Single Event Through Modeling

WealthEngine’s client is a top global, luxury car maker. The company realized that they had to move away from one-to-many communications to a one-to-one approach. Their research had shown that 59% of luxury consumers agreed that personalization is key to gaining their business. The automaker decided that data was going to drive their personalization efforts

The company exclusively used WealthEngine while creating their RADE program. RADE is its regional driving experience campaign. It started as an invite-only event targeted to High Networth Individuals (HNWIs). A select list of HNWIs was invited to an exclusive event where they could drive top-end models around a race track.

Before the event, there were 300-400 members on the company’s RADE wait-list. 100 people attended the event which saw an unprecedented 5% conversion rate. 5 of the 100 people purchased a top-end model worth $200,000+ after the event.

Encouraged by the success of the event, the automaker was interested in creating more RADE events. They leveraged demographic, lifestyle, and interest data from WealthEngine to build personas. These personas were meant to match the type of buyer who was highly likely to convert at the RADE event. Their personas combined with (Engage)WE helped them accomplish the following:

By finding a persona and building a look-alike model around it, the company was able to refine its target list for RADE invites. Further, they leveraged WE Prospect to find other look-alikes who were highly likely to exhibit the same behavior as past buyers. These efforts guaranteed them not only higher conversions at RADE events but also lowered acquisition costs. Their every first event resulted in $1 M in sales, giving them the confidence to predict future earnings. Data, therefore, gave them the ability to forecast sales with precision.

WealthEngine Customers: Get a Free Modeling Sample of Your Data. Get it now.

Redefining “Luxury Brand” for Your Luxury Marketing Strategy

Why do consumers consider one brand to be a “luxury” brand and another brand not? Exclusivity? Performance? Quality? Innovation? Heritage? For the most part, those all have been defining characteristics of a luxury brand, and they still are. However, there’s been a shakeup underway. The traits that carry the most weight with consumers in today’s luxury market have changed.

“The definition of ‘luxury’ is undergoing a paradigm shift in the consumer market,” said marketing expert Pamela Danziger. Unity Marketing and Luxury Daily recently surveyed over 600 luxury retailers and marketers. They found that the definition of luxury is the “number one disrupter of the luxury business.”

What does this mean for a luxury marketing strategy? If you know how consumers think of luxury and what drives their purchases, it can help you determine the best strategy to attract wealthy clients. You can also reduce the cost of acquisition.

Quality Is Now the Top Characteristic That Defines a Luxury Brand

Ask any Apple buyer how well they like their Mac or iPhone. They’ll undoubtedly tell you they believe Apple products are far superior to any competitor. It doesn’t even matter if competitive products offer better features. Apple may got its start by launching a unique computer product to compete against Microsoft. But Apple’s following has grown far beyond disgruntled PC users. There may be a certain “status” to owning an Apple product. However, the company built its brand on a reputation of quality and performance.

Now consumers are defining luxury differently. Just a few years ago, quality took over as the leading characteristic of luxury. Data from a recent major report confirms that quality, not exclusivity, is now the key definer of luxury for consumers globally. According to Albatross Global Solutions and Numberly’s fourth annual “The Journey of a Luxury Consumer” report, 85% of luxury consumers say quality is the most important characteristic.

“What separates true luxury from the idea of luxury is quality,” says Javier Calvar, chief operating officer at market research firm Albatross Global Solutions.

Younger Consumers Are Playing a Bigger Role in the Luxury Market

A change in the demographics of today’s luxury consumer is behind the shift in what defines luxury. Traditionally, the luxury market has been made up of older consumers, many with inherited wealth. Baby boomers and those older still make up 60% of the total global luxury market. But the other 40% is made up of Generation X and millennials. So younger consumers are representing an increasingly significant portion of the luxury business.

Younger people, with newfound wealth, are not only moving into the luxury market, they’re redefining it.

“When money goes into the hands of people that didn’t have much of it before, the relationship those individuals have with luxury brands is very different from those who have been exposed to luxury brands for a long time,” said Calvar. “A really large percentage of our top-end product customers are between the age of 30 and 50. It’s no longer a retirement plan to buy yourself a yacht to enjoy in your golden years. ”

Millennials in particular are a luxury marketing segment growing in importance and wealth. They see exclusivity as less important. Instead, they prefer to “belong,” and have little interest in something that separates them from their peers.

Connecting with the New Luxury Market Consumer

How can you connect with this new luxury market customer? Identify the specifics of your target customer’s profile. Once you know about their likes, dislikes, and best methods of contact, you can build a more effective luxury marketing strategy.

So it’s more than demographic data, it’s about understanding your customer’s mindset, whether your luxury customer is 35 or 65. Appealing to a baby boomer is different than connecting with a millennial, though both may have interest in the same product. Knowing the buying motivations of each allows you to tailor your message to that niche segment.

“Quality always will be essential to luxury, said Lyle Maltz, a director with Kantar Vermeer, WPP’s global marketing consultancy. “But now emotional value and a strong, personalized relationship with consumers are of great importance in luxury marketing.”

Today’s luxury marketing is “highly personalized marketing. It has a very specific and defined message that resonates with an individual’s affinities, interest, and wealth capacity,” agrees WealthEngine’s Patrick Bischoff, president of the Commercial Markets Group at WealthEngine. You need to build that one-on-one relationship with your customer to make them feel they are being treated as an individual.

Following a Customer-Driven Luxury Marketing Strategy

The new luxury market consumer will define what makes a brand a luxury brand, not the other way around. Today it’s less about marketers and more about consumers. That can make it more challenging for luxury marketing strategy, as the definition of “luxury brand” continues to shift. Still, to truly prosper in the luxury arena, luxury marketers will need to follow the lead of their target luxury consumer.

“The change in how consumers define luxury and the new path to purchase is dramatically redefining the marketing strategy,” said an unnamed marketing industry insider in a Forbes article. “Luxury brands must be very agile and innovative in order to gain the favors of the new luxury consumer.”

Giorgio Armani is a brand known globally for its high-end designer men’s clothing. It began by targeting the ultra high-end professionals who desired a high quality product. Since then, Armani has gradually expanded its brand scope with products aimed at broader customer segments. Armani launched a line of jeans in the U.S. market for fashion seeking, price-sensitive youths in urban metro areas. It’s an example of a luxury brand creating sub-brands to capitalize on and cater to a different customer segment.

As stated in a WARC article, “The traditional luxury model has been challenged further with the rise of digital platforms, social mobility, the emergence of ‘affordable luxury,’ and the particular preferences of millennial shoppers.”

With more younger luxury buyers who grew up in a digital world, you must also change your luxury marketing strategy. Part of building a luxury brand involves communicating with customers in the way they prefer. Years ago, that may have been print ads, direct mail, or TV commercials. Today it’s more likely to include special videos, social media, apps, and other digital means that provide a “total customer experience.”

6 Top Trends in Luxury

The luxury goods sector has long been one that inspired envy, whether it’s the attached glamour or the high margins enjoyed by retailers.

However, reports have indicated that the sector has seen stagnation and a low, single-digit growth rate in 2016 & 17. Under these circumstances, it is important to identify, understand and embrace the trends that define the industry today.

We sat down with Neha Kapasi, our Luxury Sales Director, to discuss her perspective on Luxury Brand Marketing and how WealthEngine can help companies personalize their engagement with wealth and lifestyle data. Listen to the full podcast.

Luxury companies that have foreseen or even set the trend in some instances have benefitted from having a competitive edge and are poised for success. With more brands entering the market at every level of luxury, let’s examine the trends that can help set these purveyors of refinement apart.

1. Becoming Street Smart

When it comes to staying relevant, the luxury industry has it particularly hard. What’s trendy today could become irrelevant tomorrow. Millennials and other young consumers of luxury products and services have shown that they have a preference not only for the indulgent but also for the cool.

The ‘street-edge’ factor is becoming something that is prized among consumers. Fashion giants such as Balenciaga and Balmain have hired creative directors who can create the new cool. Meanwhile, other houses are benefitting from unexpected collaborations such as Louis Vuitton x Supreme and Gucci x Dapper Dan.

2. Communicating with Personalized Precision

BCG has predicted a massive revenue shift towards the top 15% of marketers who embrace personalization. Luxury customers are especially likely to respond to messages that are custom tailored to them. We have talked before about how no two millionaires are the same.

It is no longer enough to look at just wealth indicators for marketing effectiveness. Luxury companies need to have a more holistic view of customers including demographics, lifestyle attributes, and affinities so that their Account Based Marketing is more targeted and therefore more efficient. Luxury consumers, especially those from digitally savvy generations crave an authentic experience. This means that luxury companies need to embrace data and AI to deliver the most personalized, highly customer-centric experience- whether it’s travel, high-fashion, auto, or real estate.

3. Embracing Technology

Speaking of personalization and digitally savvy consumers, luxury companies that are early adopters of technology will emerge as winners. Technology needs to permeate not only communications but also the very delivery of customer experience.

Data and Artificial Intelligence can help identify patterns, create predictive models and customize messaging for Account-Based Marketing. An omnichannel approach enables luxury purveyors to reach consumers where they gather. For instance, Instagram is not just for influencers and aspirational followers. Of the 800 million Instagram users, 80% of them follow brands. 75% of users are reported to take action after seeing a business post.

Augmented and Virtual Reality can provide consumers a richer experience when it comes to product trial, creating shareable media and enjoying a more digitized in-store visit. Amazon and Zippin have set the trend of creating check-out free shopping, eliminating a bottleneck and further integrating online and offline experiences.

4. Weaving purpose into their business

Although this may be more a movement than a trend, purpose, and meaning are extremely important to millennials and younger generations who will soon represent 45% of the luxury market. It is common for luxury conglomerates such as Kering Group or LVMH to have corporate social responsibility units.

Today, however, the emotional and experiential preferences of millennials and gen-Z go beyond perfunctory social impact. It is important for luxury companies to build purpose in the very design of their business. This could be through using sustainable materials, reducing their carbon footprints, supporting or highlighting the work of marginalized communities, ethical sourcing, and treatment of manufacturing partners. Ultimately both clients and employees want to associate with responsible businesses.

5. Making Customers and Employees Feel Included

In keeping with the idea of responsible business, inclusiveness is another big theme in the luxury market. By its nature, luxury is not inclusive. Today, however, seeming out of reach makes brands feel unrelatable.

Fine jewelry companies such as Tiffany & Co and Bvlgari are each doing their part to become more inclusive. While Tiffany has created a modernized and minimalistic space within a new retail store, Bvlgari has created more entry-level pieces to be further within reach. Meanwhile, Gucci has made strides in the area of diversity. Gucci’s rising revenues are a classic example of success bolstered by embracing the current zeitgeist of the luxury industry.

6. Enabling Access as an Alternative to Ownership

Inclusivity is further accomplished by enabling not only ownership but also access to luxury experiences. Experience is the operative term in the luxury industry today, as reports have shown that HNWIs would rather spend big dollars on memories than goods.

This being the case, the sharing economy is also affecting the luxury sector. Luxury holiday homes and private jets have started to benefit from a market that is happy with access for a desired period over long-term ownership. This is bringing about the democratization of luxury consumption, which is predicted to be an ongoing trend.

6 Ways to Maximize Your Holiday Marketing

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As summer comes to a close, the holiday season is fast approaching! What is your brand doing to prepare for the holiday rush? Consumers will be ready to spend. What data are you using to segment your customer base and supercharge your marketing efforts? Do you know the customers or prospects that can afford the products you sell?

Below are some helpful tips from WealthEngine for marketers to execute a flawless holiday season marketing campaign:   

  • Start you holiday marketing early to raise awareness ahead of the holiday season. This way when customers are ready to purchase, your brand is top of mind!
  • Segment your audiences using wealth and lifestyle intelligence to ensure the appropriate message goes to the right consumer.
  • Create multi-channel marketing campaigns (email, snail mail, banner ads, etc.) that have continuous impressions to achieve maximum results.
  • It’s never too late to put together an effective marketing campaign. Using relevant data to inform your decision making will supercharge your efforts. Don’t be afraid to get other departments in your company psyched about the holiday push and let them know how they can help you best.
  • While considering new market trends, always review what worked well last holiday season and plan to replicate your previous successes. How can you optimize what already works using new data?
  • Finally, don’t be afraid to be bold and take chances. The holiday season can be a frantic rush of consumer decisions and the brands that stand out will win the consumer’s attention.

For more information and help preparing for your Holiday season, contact WealthEngine today. 

Conversations with Leaders in Luxury

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WealthEngine’s President and CEO, Mark Logan, recently participated in Conversations with Leaders in Luxury Led by Chris Olshan, CEO of The Luxury Marketing Council. Mark discussed everything from how he got his start in business, to WealthEngine’s presence in the luxury space, and even what he enjoys doing outside of work (did you know he’s an avid hockey player and fan?)

Take a look for yourself to learn more about:

  • SaaS products
  • WealthEngine’s presence in the luxury space and how we help organizations
  • Big data
  • What differentiates WealthEngine from others
  • Our work with nonprofits
  • Trends in luxury
  • And more

Predictive Lead Scoring and Analytics – It’s Easier Than You Think.

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The statement ‘predictive lead scoring and analytics made easy’ seems counterintuitive. How can lead scoring and analytics be easy? If it was easy wouldn’t everyone be doing it?

According to a marketing effectiveness study by The Lenskold and Pedowitz Groups, 68% of successful marketers cite lead scoring as most responsible for improving revenue contribution. Additionally, the Pareto Principle says that about 80% of your sales comes from the top 20% of your customers. These statistics should give you pause.

Think about it. What if you could find new prospects that look like your best customers and discover new opportunities among people you already know? Simply put, wouldn’t you want to find prospects that have the same characteristics as those in the top 20% of your customers? Having these actionable insights can dramatically impact your sales and marketing strategies, resulting in increased revenue. This is empowering and valuable information.

Let’s take it a step further with an example:

A luxury retail organization is developing a strategy for their holiday marketing campaign. Specifically, they are planning to host an instore event and want to ensure they are inviting the right people so that they get the most out of the dollars spent. They also want the event to be enticing so both customers and prospects attend.

The organization analyzed their top customers residing within a 30 mile radius of the store location to develop a customer profile. Surprise! These customers have an affinity for equestrian and tend to drive a Lexus. Just those two data points alone influence their marketing plan. What about partnering on the event with Lexus or an equestrian-focused organization? Additionally, the retailer can now identify prospects who fit this customer profile and have the same interests, increasing the likelihood that they will be interested in attending the event.

Going forward, the organization can now score new prospects and customers to determine how to market to them going forward.

Bonus – this information was identified in minutes and doesn’t require a data scientist. How’s that for actionable?

Insights at your fingertips. Increased efficiency and productivity. Find out more now in our on demand webinar Predictive Lead Scoring & Analytics Made Easy.

What to Do Now to Maximize Holiday Spending This Year

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The current retail landscape presents many challenges that can be difficult to manage including decreased customer growth, little transaction growth, growing competition, shifts in spending, and unfavorable demographics. With a rapidly approaching holiday season and only 114 days until Black Friday it can be daunting trying to develop a successful strategy to overcome these challenges.

It’s no surprise that using data and analytics can dramatically impact your revenue, but analytics can only go so far if your data is vague or incomplete. Having complete, rich customer profiles will provide a stronger foundation for your analytics, and thus a stronger foundation for your marketing and sales strategy.

How can you enrich your customer data? Conduct a wealth screening to gain transformational insight into customers and prospects. A screening appends data to your customer database so you can better segment your database and determine who to prioritize in your marketing and sales efforts. This insight is helpful to not only identify your best customers, but to uncover those individuals who may show potential for additional business. You may be missing out on potential opportunities because you don’t know who has the capacity to spend more.

A wealth screening supplies you with wealth, income, lifestyle, and affinity information on individuals. This includes net worth, income, assets, real estate, stock holding, charitable contributions and other financial related data as well as business and personal contact information. Having this information allows you to prioritize who you focus on to maximize revenue.

A screening also lets you determine what marketing messages should be sent to each customer and prospect segment. In regards to gearing up your campaigns for the holiday shopping season, certain segments of your consumer database will have the ability to spend more than others. These individuals should receive offerings for higher cost items, while those who don’t have the capacity to spend as much should be shown lower cost items or a promo code to use to be able to purchase a more expensive item.  

The insights you can gain from a wealth screening are undeniable. By better understanding your customers and prospects the analytics and data you use to inform your decision-making will be more valuable and more impactful.

Contact us to learn more about how you can use these insights to not only identify your wealthiest customers, but to uncover those with the capacity to spend more.

Maximize Revenue with a Complete Picture of your Customers’ Capacity to Spend

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Luxury brands face tough competition to capture and retain high net worth customers. They are now facing competition from non-luxury brands, who have been gaining traction, and wallet share, among HNW individuals. In 2016, Nike was ranked the most valuable apparel brand in the world, overtaking Louis Vuitton, and Kia, a non-luxury vehicle, came out on top in J.D. Power’s quality car survey.

Luxury brand or not, the competition is fierce to both attract and keep the attention of HNW customers. Their business can make a huge impact on your business. A Bain & Company study found that a 5% increase in customer retention can increase a company’s profitability by 7% and that the average amount spent by a repeat customer was two-thirds more than a new customer.

Because of the current landscape, it is imperative for brands, both luxury and non-luxury, to prioritize and segment their customer base and identify who they should focus their time and budget on in their marketing campaigns. One approach is to use transactional history, however, spend history does not equate to spend ability, so you need to be more granular.

Previous spending is a key component, but it should not be the only data point you’re using. Instead, focus your efforts on identifying the low spend, high net worth customers among your current database. Think about it – a customer may have purchased something for $100 when they actually have the capacity to buy something that’s $1,000. Use this information to personalize your sales and marketing outreach and present higher cost items.

Remember, not all existing customers have the capacity or ability to spend more with you. Identifying those that do are critical to enhancing revenue and driving a higher customer lifetime value.

Contact us for more information on analyzing your customer base and identifying those with the capacity and net worth to spend more.

Take Personalization Beyond Email

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Personalization in email marketing, and the positive ROI that can result, is frequently discussed. It’s been proven that personalized emails result in 6x higher transaction rates. However, personalization should not stop at email marketing. Emails are just one component of the whole customer experience.

Real-time personalization across all channels is key. The speed at which you can customize your  messages and offerings to your customers can dramatically impact your revenue, boosting total sales by 15 to 20 percent.

Imagine instantly knowing key demographic and wealth information of an individual who calls into your customer service department. Within seconds your representative would be able to determine what approach to take with the customer and who to route them to, whether it is rolling out the red carpet, inviting them to a preferred customer program, or pointing them to goods and services that match the individual’s spending capacity.

You could also utilize this consumer information to tailor and enhance a hotel guest’s experience upon check-in. For example – upgrade their room to a suite or sign them up for a guest experience that closely aligns with their interests and wealth bracket. The personalization shouldn’t stop once your guest checks out. You should send emails with specific packages that would appeal to their interests and lifestyle, or ask them to sign up for a rewards program.  

While the majority of marketers agree that personalization has improved their customer experience, only a little more than half believe they are doing it correctly. If you’re not building personalization into your marketing and sales strategies, you are missing out on revenue opportunities.

Take the time now to gather your company’s stakeholders and discuss the need for personalization in the customer experience. By making it a priority, you will better understand your customers, which will result in increased brand loyalty and higher lifetime customer value.

To hear more about personalization join WealthEngine at the Marketing Analytics Conference on Monday, June 5 for a session on The Promise of Personalization – Two Approaches in Conversation.     

CEO Mark Logan on Marketing to Gen X, Y, & Z

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On Wednesday, May 3, our CEO, Mark Logan, joined senior executives and decision makers at the 2nd annual Luxury Roundtable hosted in New York City by Luxury Daily. The goal of the roundtable was to discuss a serious issue facing luxury marketers: how to drive and sustain demand from Generations X, Y and Z whose shopping habits are strikingly different from the silent generation and baby boomers.

Mark joined a panel of experts to discuss “Ecommerce and Mobile: Symbol of the New Path to Purchase.” The focus of their session was how to deploy online and mobile channels to generate new business while retaining existing customers for generations who live on their smartphones. Mark shared how WealthEngine can provide useful insights on customer segmentation and the critical importance of personalization.

WealthEngine has put together a useful resource to help luxury marketers use predictive analytics and modeling. You can download it here.

For more on the roundtable, including slides and other panel summaries, click here.