Niches Within The Affluent Market

Ask most any financial advisor who they target, and it’s likely you’ll hear, “the affluent market.”

However, the reality is that the affluent market breaks down into many different sub-groups. The more that you can position yourself as meeting the needs of a specific group-the greater the likelihood is that people will pay attention to you.

Remember…getting ignored is the biggest challenge you face when trying to initially develop brand new business relationships.

So how does one subdivide the affluent market?

Certainly one way of doing so is by level of affluence.

At the “entry-level” of the affluent market, one has the Mass Affluent. These would be roughly defined as households with a minimum net worth of $250,000. This segment is the youngest and most diverse of the affluent classes.

The next level would be what I call the Truly Affluent.-Households with a minimum net worth of $1 million. This group has a very specific outlook on the world that one needs to understand if you are going to successfully attract them as clients. They don’t want to be lumped in with the “entry-level affluent’ crowd, yet they don’t want to have their needs overshadowed by those whose net worth is significantly above theirs.

The third tier are the Ultra-Affluent: net worth in the $3-$10 million range. This is the wealthiest 10% of US households according to the Federal Reserve. As an interesting fact these 11 million households earn 36% of all US income, and control 70% of the U.S.’s net worth. Again, there is a different marketing strategy that one wants to use to attract this segment.

Which brings us to the final group; the Super Affluent; net worth starting above $10 million, but the majority falling into the $20-$50 million dollar range. Not surprisingly, this is the oldest segment of affluence, with an average age of 57 years.

In addition to segmenting the affluent market by net worth, they can also be subdivided by specialty market groups such as Affluent Baby Boomers, Affluent Gays & Lesbians, Affluent Heirs, Affluent business owners, Affluent Women, Affluent African Americans, ect.

The point is that each subgroup has its own unique challenges & issues, and views affluence from a unique perspective. The key in marketing to any segment of the affluent marketplace is to mirror the way they perceive themselves in your messaging. Thus the more you micro-target specific segments, the greater the likelihood that your message will resonate.

Food for thought

Posted on February 18, 2011 by Gentle Rain

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