The smartest brands know you need more than customers – you need advocates. The perfect arrangement for a business is to have paying customers who are happy to tell others how wonderful you are, entreating them to become customers also. It works best because it is authentic – these customers are, after all, not paid “influencers” – and it also works because most consumers have a natural instinct to trust in things that others trust.
Of course, when it comes to luxury, many consumers can be more wary of trusting the crowd. How much experience have these consumers with luxury generally? What level of comfort or luxury are they used to? Do they even have the same taste? It’s why qualified, expert reviews still matter – even if consumers know the reviewer might have received something for free, their experience in that sector matters more.
It’s the same with personal recommendations. With luxury goods and services, people often seek the advice of an acquaintance who has greater experience with the category, rather than one who merely seems to know a lot but couldn’t be considered a typical customer. In luxury travel, for example, the advice of a seasoned luxury nomad can have equal weight as that of an industry expert or even an agent.
All this produces a temptation to consider luxury as a sort of club, only permitting likeminded ‘members’ who are all experienced customers and who only share their experiences with other ‘members’, but the reality is luxury works on a far more democratic basis.
Of course, luxury does need to appeal to its core clientele of wealthy individuals. For one thing, its price point dictates that. In our collaborative report with ILTM launched last December at Cannes – ‘The Global Luxury Travel Ecosystem’ – we focused on the High Net Worth ($1m+) audience, the top 0.3% of the population, who each spend on average around $30,000 a year on travel. These are the individuals that all luxury travel companies are chasing, and with good reason, given that they contribute well over a quarter of the total global travel spend.
However, with just 22.8m HNWs around the world, they make for a relatively small tribe of advocates. Chanel, Louis Vuitton, Dior and Gucci all have more Instagram followers than this HNW population, which also highlights an important factor in other luxury sectors – that ‘aspirational’ customers can often feel that they are as much a part of a brand as its core clientele. And whilst this core clientele should still be considered as being of vital importance to both the brand’s image and its product targeting, this does not mean that the aspirational luxury consumer should be ignored.
In luxury travel, these aspirational customers can often be under appreciated. They tend not to spend as much as higher end HNW customers, staying in standard rooms and often staying for shorter periods. They can also be much more modest when it comes to pursuing activities and extra services. However, there are four huge advantages to attracting these travellers and making them feel welcome.
The first one is an obvious one but easily overlooked – there are simply far more of these aspirational luxury travellers than there are core HNW travellers. Typically, aspirational travellers are those with above average household income but lower levels of capital. They are often younger too, in contrast to HNW individuals who are typically over 60 years of age. In the USA alone – the wealthiest country in the world – 30.4% of households earn over $100,000; this accounts for 38.9m households (2018, IRS SOI data). The HNW population of the USA by comparison -despite being the largest of all countries – is around one fifth of the size at 8.67m individuals (Wealth-X HNW Handbook).
The first main advantage of this is that there is a greater market from which to acquire customers but also, there is a greater potential for advocacy from this audience who, through personal recommendations and social media channels particularly, inspire others to pursue similar experiences and with the same brands.
The second advantage is that aspirational luxury travellers are often less experienced with luxury travel than core, wealthy consumers. Why is this an advantage? Well, for one thing, it means that many of them are in a virginal discovery mode which often results in them drawing more positives than negatives from their experiences, given that their perspective is different. This doesn’t necessarily mean they are easier to please, but it does mean that certain aspects and rituals of luxury travel that are commonplace for core customers are simply more exciting for those for whom this is rarer or newer.
This also means they are more likely to be enthusiastic about sharing their experiences with others, becoming unpaid evangelists for not only experiences but the brands that provide them. This is connected to the third key advantage of aspirational luxury travellers in that they are – in these situations – highly likely to use social media, particularly visual social media channels like Instagram as well as Facebook, which document their journeys and interaction with luxury experiences.
Again, the greater likelihood of using social media in this scenario is connected to their wish to showcase their luxury travel experiences to those in their online social networks. The desire to share in this way captures a permanent value from the experience in a way that more experienced travellers have less need for. Aspirational travellers can therefore be far greater sirens for these luxury havens in their prolific production of online content.
The final advantage of aspirational travellers is that they are, on average, younger than the wealthy core. There are two elements to this. Firstly, early involvement in luxury experiences tends to produce a longer lasting attachment to it. Aspirational travellers are often pre-family, travelling as couples and friends, and experiencing genuine luxury travel experiences can often begin a tradition which they follow throughout their lives. The second element is that the presence of younger individuals revitalises the experience overall. Not only does it produce an exciting and diverse mix of guests who are at different life stages, with different perspectives on life and travel, it also helps bring a contemporary edge to the image of brands in the luxury travel world, which can at times – with their older core clients – become too traditional.
There are of course limits to the value of the aspirational traveller and in their great hunger for exceptional, bucket-list luxury experiences, they may not necessarily be the most brand-loyal in the short term. However, the vast majority of those who are HNW become so through their own means*, not by inheriting the wealth from the previous generation. And often, these are the individuals that do so with a deep-seated determination to attain wealth that affords the great luxuries in life, a major one of which is travelling well. And so in attracting and looking after aspirational travellers, you aren’t just bringing attention and advocacy, a youthful vitality and the power of sharing experiences by those who appreciate them the most, you’re also looking after your future core clientele.
*Data revealed in the Wealth-X High Net Worth Handbook 2019