If an organization prioritizes a few basic principles, their ability to identify and retain very important clients (VICs) increases exponentially as will their revenues. The impact of embracing or ignoring these tenets will strengthen some brands and leave others in the unenviable position of playing catch up with the more data savvy and competitive organizations.
Basic principles to retain VICs:
- Not every luxury buyer is the same.
- The premiumization of consumption should not be ignored.
- The continued high spend pattern of the ultra-wealthy defied the volatility of the overall luxury marketplace.
- Identifying which clients are in the “Beyond Money” elite circle is paramount, where luxury spend is considered a necessity, not optional.
Prioritization and segmentation
Not every luxury buyer is the same. Every client and prospect is valuable to a brand but creating a client segmentation strategy to align the company’s investment and resources to put a particular focus on and nurture those with the highest probable lifetime value (LTV) needs to be a specific objective.
In a world where consumer spending is marked by volatility, and ever-changing trends like “viral
buying,” one group stands apart: the ultra-luxury consumer, those who have the greatest
potential LTV. Despite global uncertainties, this elite segment remains resilient, offering
unparalleled opportunities for brands to secure a larger share of their wallet.
High spend opportunities and the premiumization of consumption
A recent study by Boston Consulting Group (BCG) in collaboration with Altagamma shows that
the increased revenues in the luxury segment are coming primarily from the ultra-wealthy
buyers at the top of the wealth pyramid. In 2020-2023 the entry level luxury shoppers frustrated
with COVID and armed with too much time, spent their savings and COVID stimulus funds in
the luxury sector. Now, this group has retreated due to global unrest, regional wars, inflation
worries and uncertain economies.
Ultra-wealthy shoppers, particularly the “Beyond Money” segment—hyper-spenders with annual
luxury expenditures averaging $350,000—represent not just stability, but growth.
Ultra-high net worth (UHNW) individuals (those with a net worth of $30m+) like those in the
Beyond Money segment defy typical spending patterns impacted by global events and
economic trends. These clients remain steadfast, viewing luxury spending as a primary need
rather than a discretionary choice.
According to the BCG-Altagamma 2024 study, the Beyond Money segment has doubled its
market share since 2013, growing at a compound annual rate of 10%, twice that of the overall
luxury market. These consumers exhibit five times less spending volatility compared to other
luxury shoppers, maintaining their consumption habits regardless of economic or geopolitical
upheavals.
For luxury brands, the benefit of engaging with such stable, high-value clients is clear. A UNHW
buyer is worth 230X more than an aspirational consumer to an organization. The challenge,
however, lies in identifying and nurturing them effectively—a task that requires a specific data-first strategy.
Effectively identifying and engaging them requires brands to move beyond legacy data practices
and embrace easy-to-adopt methodologies.
The referral power of billionaires: the ultimate influencers
The UHNW population is now more mobile and better connected than ever before and the
referral power of this segment is unlike any other. Knowing who the billionaires are in your CRM
and who they know is a powerful tool for enhancing revenues. Many luxury sectors are heavily
dependent upon this referral community, and being pragmatic about who is in your database
and leveraging their circle of influence will pay off.
These clients remain steadfast, viewing luxury spending as a primary need rather than a discretionary choice.
How to predict revenue potential
Historical transaction revenue vs future spend capacity data: which uncovers more revenue potential? What if you could identify a potential VIC at the first engagement or inquiry, rather than having to wait for a transaction to quantify their potential?
Some organizations fall into a mindset that transaction data is sufficient for segmentation
purposes. Purchase amounts will certainly identify the 10% top current spenders but will not
offer significant insights into the remaining 90% of the clients. You will not see the wealthiest
who have not yet spent significantly with you.
If you don’t have a specific business plan to identify and delight the wealthiest buyers in your database, you are missing valuable revenue opportunities. Wealth, age, and behavior attributes are insights that immediately enable an organization to spot new revenue opportunities.
The rewards of repeat customer campaigns
Consistently, industry research reminds us that retaining and nurturing existing clients yields
significant returns. Employing a simple but powerful wealth data enhancement strategy will fuel
a segmentation strategy that increases revenue in every scenario.
- Increased Spending by Repeat Customers: Repeat customers spend 67% more than new customers. (SEMRUSH)
- Higher Success Rates: The probability of selling to an existing customer ranges from 60% to 70%, compared to just 5% to 20% for new prospects. (PAYPAL)
- New Client Acquisition Costs are 5 to 25 times higher than keeping or growing an existing client. (HARVARD BUSINESS REVIEW)
For luxury brands, this means that investing in strategies to understand and serve their existing
customer base more effectively is a direct path to increasing sales and revenue.
Know your customer and your VICs: the cornerstone of luxury engagement
Luxury brands thrive when they get to know their clients at a granular level, and deep customer
insight is no longer optional—it’s essential. Transactional data simply scratches the surface of a
client’s behavior and can mistakenly underestimate their buying power.
Altrata empowers luxury brands to gather and leverage data on key factors such as:
- Prioritizing Top Spend Opportunity with Net Worth and Liquidity: Understanding a
client’s financial profile to prioritize top clients and create powerful segmentation
strategies. This enables brands and Maisons to curate product recommendations and
marketing strategies to align sales efforts with their clients’ purchasing power. - KYC: Know your Client’s Spend Preferences: Luxury purchase data and how clients
allocate their spending—whether on yachts, private air travel, fine jewelry, exclusive
experiences, or bespoke fashion—ensure brands deliver precisely what their clients
desire. - Curate Custom Events and Campaigns by understanding hobbies, interests, and
Passions: Knowing a client’s personal interests, such as art collecting, philanthropy, or
yachting, enables brands to craft campaigns and experiences that feel deeply personal
and resonate on a lifestyle level. - Find Purchase Patterns with Luxury Asset Correlation Analytics: Insights into client
portfolios, such as investments in real estate, collectibles, or other luxury assets, provide
context for their purchasing behavior and potential future needs.
These insights not only help identify hidden VICs but also reveal budding high-potential clients,
allowing brands to engage them early and cultivate their loyalty. With a comprehensive
understanding of each client’s profile, brands can move from generic marketing to creating
bespoke, hyper-personalized experiences that clients value and remember.
Embedding intelligence seamlessly into workflows
Deep insights alone aren’t enough; they must be seamlessly integrated into a brand’s existing
workflows to surface insights that increase revenue. Altrata’s solutions are designed to work
within luxury brands’ current systems, making intelligence easy to access, understand, and act
upon.
Embedding wealth data into workflows transforms operations and accelerates
discovery.
- Unified CRM Systems for Cross-Channel Consistency: Integrating customer intelligence into a centralized CRM ensures all team members—from client advisors to customer service teams—have access to the same rich client data. This unification ensures consistent recognition and treatment of clients across physical stores, online platforms, and exclusive events.
- Real-Time Access for Immediate Action: Embedded intelligence means that insights are available at the moment they’re needed- in store, in marketing campaigns and with event planning.
- Enhanced Collaboration Across Teams: Integrated workflows allow marketing, sales, and operations teams to collaborate seamlessly. Marketers can craft personalized campaigns informed by sales data, while sales teams can follow up on high-potential leads identified by predictive analytics.
- Scalable, Adaptable Solutions: By embedding intelligence into existing systems, brands can scale their operations without overhauling their workflows. This ensures luxury brands maintain their exclusivity and client-focused ethos while embracing innovative technology.
Embedding intelligence into workflows also aligns with the fast-paced nature of the luxury industry, enabling brands to adapt quickly to trends, new client behaviors, and market shifts. The result is a business operation that is not only data-driven but also agile and client-centric.
Global reach with local relevance
Altrata can provide market sizing for potential retail expansion. It also is the only granular dataset that profiles the very wealthy around the world. Our data and insights bridge the gap between global trends and regional nuances. We enable brands to adapt their strategies based on geographical insights while maintaining their core identity.
Things to Consider:
- How powerful would it be to accelerate the discovery of new top spenders
- How many billionaires and ultra-high net worth individuals are you engaging? How many are slipping through the cracks?
- Would you benefit from more partnerships and collaborations to put your brand in front of the top buyer audience?
We can help.
The luxury market is evolving, and the brands that succeed and profit will be those that embrace data-driven strategies to build lasting relationships with high-value clients. Altrata’s suite of tools, including Wealth-X, enables luxury brands to integrate comprehensive customer intelligence into their CRM systems, uncover hidden opportunities, and deliver hyper-personalized experiences at scale.
Turn insights into revenue. See how Altrata can help you capture and retain wealthy clients.
Schedule Your Free Demo Today.
Moira Boyle is a Senior Director at Altrata and Head of Global Luxury for WealthEngine, Wealth-X and RelSci, and a graduate of the University of Virginia. With over 20 years of experience in sales and marketing, her specialty is collaborating with clients to curate custom data centric solutions.