Finding the Right Affluent Buyers for Fractional Ownership
By Lawrence Hefler, Principal, Hefler International
Successful fractional ownership projects today are often characterized by authenticity, enrichment, and sustainability more so than just "luxury" - which is clearly an overused term. With price points ranging from $100K to one million dollars, they will most likely be purchased by more of the "super affluent." But it is more than just income and assets. It's also about inner life and their propensity to indulge in a preferred lifestyle that their wealth allows.
Let's call them the right affluent. If generally speaking, the right affluent are potential buyers of fractional products, then you need to know something about their lifestyle and consumer behaviors compared to the mass affluent... If you are personally in this group, you will relate, if you are not personally in this group, you have to believe that you are in it. From these observations, your branding, marketing, and sales approach will become that much more relevant.
In a recent study by Packaged Facts across all affluent groups, there were some findings that tell a lot about how the super affluent are different than the mass affluent. There were particular findings related to demographics, consumer behaviors, and leisure time that give us some insights.
- The super affluent are primarily found along the coasts, in very large cities, and a handful of metro areas dominate the market. They are politically involved and socially engaged.
- They focus on staying young and keeping fit, fashion and specialty stores are drivers, they go out more often, and organic foods entice them. They are inveterate travelers and are tied to the Internet
- They are willing to pay full price to buy what they want when they want it! From a branding perspective, it about offering differentiated, authentic vacation and destination experiences; communicated by relevant and emotional messages and stories. Sales success comes from those places that have a really good story to tell. That good story, so to speak, is inevitably based on guest and internal staff experiences.
Whether a project is in already in existence or just an idea, you want to have experiences and stories for your message. Then you need to share it with your social and business networks and then the networks that will connect to the right affluent groups.
With a powerful story the network grows among friends and associates. Stories quite often they happen naturally...At the same time, you always need to talk to customers and prospects...maintain a dialog and get feedback... this is often the material for stories. Having internal people embrace your brand and the product and be well trained in the essence of fractional ownership lifestyles. It's not a timeshare message. It's not a real estate message. It's not psychological message, and it's certainly not a financial investment message.
The message comes from a different mindset that requires a balance of emotion, education, and relevance. You do need to have the psychological insights into the mindset of a luxury consumer. Only by understanding the super affluent consumer's underlying psychology can you tailor your marketing messages. When consumers look at similar offerings (expressed in features and benefits) within fractional ownership or even destination clubs, they hear things like ski in/ski out, oceanfront, 2100 square feet, million dollar homes, exchange around the world...
Many developers and destinations can say the same thing. One way buyers will differentiate a "brand" is from the people they interact with; the touch points, the management, the sales people, the concierge, the front desk people...etc. That is the message. The other consideration for the message today is the optimization of the marketing channels and the return on very limited marketing dollars. Ask the question, what do the big players do that I can do as well?
It certainly depends on the audience and the buyers concerns. In the near term fractional marketers may find consumer resistance to their marketing efforts. Here are some tips:
1. Align the messaging with buyer concerns and offer more choices.
Marketers that want to ignite their projects will want to make their offering truly irresistible and the rewards more immediate. For example, "Stay for a week as our guest (with us or somewhere nearby)." Chances are you have available inventory to offer. (You know how much it will cost you.) You just may need to make the customers an offer they can't refuse, which might include a higher added value to go to the next step, such as product category upgrades. Even super affluent consumers like to know they are getting a good deal.
2. Lead follow up - Is every lead immediately embraced and nurtured?
Be consistent and relevant in the follow up. Try your own mystery shopping. Get a detailed disposition on every lead. Talk about it as group and learn from each one.
3. Online presence - Affluent buyers are online. Update your Web site messaging- add or enhance streaming video, discover the features of You Tube. Be sure your home page engages a visitor and makes it clear what they will find on the site. Don't make them think. Engage Web 2.0 and social networks. Wealthy consumer participation in online social networks increased to 60 % in 2008 from 27% in 2007. (Interestingly, the over 55 year old wealthy increased fivefold to 49% participation in social networks.)
4. Create a blog with tips, useful info, how-to, press mention
(that's not too self-serving and contrived.) Communicate with destination, affinity, and cultural bloggers. Post comments, link to them, talk to them, engage them. Then when you do promote your product, those bloggers will trust you.
5. Be Green. Be eco tourism friendly.
As the new luxury consumer is adopting a 'less is more' lifestyle, there are signs that affluent people want to make the world a better place and that means giving back through charities and foundations and going green in order to have a smaller 'carbon footprint." There are an estimated 40 million LOHAS (Lifestyle of Health and Sustainability) consumers dedicated to personal and planetary health. Not only do they make environmentally friendly purchases, they also take action - they buy green products, support advocacy programs and are active stewards of the environment.
6. Members and owners.
Stay in touch, creating meaningful referral opportunities. Embrace exclusive local events and experiences where you are there for introductions among members and guests. Have your senior management and principals there telling the story as well.
7. Word of mouth.
The right client just may come from word of mouth - consumers providing information to other consumers. Word of mouth can be encouraged and facilitated. You can work hard to make people happier, you can listen to consumers, you can make it easier for them to tell their friends, and you can make certain that influential individuals know about the differentiated qualities of your project. WOM empowers people to share their experiences. It's harnessing the voice of the customer for the good of the brand. Word of mouth marketing is based on the concepts of customer satisfaction, two-way dialog, and transparent communications. Some of the WOM elements are:
- Educating people about your products
- Identifying people most likely to share their opinions
- Providing tools that make it easier to share information
- Studying how, where, and when opinions are being shared
8. More word of mouth:
- Viral Marketing: Creating entertaining or informative messages that are designed to be passed along in an exponential fashion, often electronically or by email.
- Community Marketing: Forming or supporting niche communities that are likely to share interests about the brand or the destination (discussion forums); providing tools, content, and information to support those communities...
- Influencer Marketing: Identifying key communities and opinion leaders who are likely to talk about products and have the ability to influence the opinions of others. (Bloggers)
- Cause Marketing: Supporting social causes to earn respect and support from people who feel strongly about the cause.
9. It really about encouraging communications and working with social networks.
Giving people something to talk about. Information that can be shared or forwarded. Creating communities and connecting people. Tactically, it's finding people who are likely to respond to your message:
- Identifying people who are able to influence your target customers
- Informing these individuals about what you do and encouraging them to spread the word
- Good-faith efforts to support issues and causes that are important to these individuals
10. Instead of only looking for customers for your product, seek out other products (and services) that you can bring to your audience.
Finding the right affluent customer means you have to have something people want and something that people want to share with others. Something they want to talk about. Give them something real to talk about. Marketing today is about doing things that people want to talk about. Every interaction should be something where everyone will tell someone else. It mostly takes awareness for the right buyers to find fractional ownership.
Lawrence Hefler is Principal of BrandShares International – a marketing and branding consultancy that helps hospitality, leisure real estate, and shared ownership companies find, keep, and grow customers worldwide. His brand heritage includes Hilton Hotels, Walt Disney, BellSouth, American Express, and Sol Meliá. Throughout his career, he has been an early practitioner and leader in the fields of database marketing, Internet, and new media. Mr. Hefler is an internationally recognized speaker, writer and industry advisor. Mr. Hefler can be contacted at 407-644-7840 or email@example.com Extended Bio...
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