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Alpharetta, GA—At the beginning of each year, the media is inundated with trend forecasts and predictions from pundits of all types. Ron Kurtz, president of the American Affluence Research Center, says that while predictions can be helpful, it’s important to keep them in perspective because there are certain fundamental truths about the affluent market that remain fairly constant:

1) Affluent consumers are not prone to substantial changes in their basic behavior and values from year to year or even over an extended period of time. This is evidenced by the research that began in the 1970s by Thomas Stanley, author of The Millionaire Next Door and the more recent Stop Acting Rich and Start Living like a Real Millionaire. Kurtz says AARC's research since 2002 has been consistent with Stanley's. (Editor’s note: Stanley’s theories are based on living not only within, but in fact quite below, one’s means.)

2) A change from one year to the next is not necessarily a trend, especially if it applies to a large increase in a very small percentage of the market. It is more likely a fad that may or may not become a meaningful trend over a period of two or more years. For example, a market segment that triples from 1% to 3% in a year is not a trend, but may be an indicator of an emerging market.

3) Affluent consumers are not necessarily luxury consumers. The definition of "luxury" is in the eye of the beholder—which could beconsidered another important caveat—but only the wealthiest 1% of U.S. households appear to be knowledgeable about the price points and brands of true luxury products. Before the recession, some luxury consumers were among the so-called mass or aspirational affluent, but these consumers have been largely shaken out of the true luxury market.

4) It is important to stay focused on the key marketing priorities of attracting new customers and retaining the loyalty and increasing the purchases of existing customers. Be aware of emerging consumer market segments but a business should avoid chasing those segments if in so doing it will distract and dilute efforts targeting their existing primary consumer markets.

5) Traditional marketing communications channels should not be forsaken, especially if one is targeting affluent and luxury consumers. Conversations among marketing professionals seem to be exclusively focused on the importance of various forms of digital communications. But an unintended consequence of digital media is that the consumer audience has been substantially fractionated. While digital provides the opportunity to personalize communications, it also can make it more difficult to reach large portions of the target market effectively and cost efficiently. Equally important, many among the large numbers of digital fans and followers of luxury brands are aspirational consumers and other "luxury curious" voyeurs who cannot afford the products.

6) The true affluent, typically careful spenders who live within their means, are the more knowledgeable and more sophisticated consumers. Their priorities have always been quality and value when making a purchase decision. In addition, the vast majority of the affluent have always avoided ostentatious or conspicuous consumption. These are not new priorities for the affluent.

7) Last but not least, there is no substitute for using common sense when thinking about how to be consumer sensitive in all aspects of the relationship, interaction, and communication with customers. Just put yourself in the shoes of your customers. This "golden rule" applies to product, pricing, service, post sale relations, communications, and all forms of interaction with the customer.


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