Wealth creators around the world are less confident about their ability to make money this year, according to a report released Tuesday by Scorpio Partnership as part of its ongoing Futurewealth Project.
Companies that sell high-end products will have to fine-tune their approaches in order to attract and retain these elite consumers, the 2012 Futurewealth Report: A Client Revolution said.
The Futurewealth Project, which is sponsored by Standard Chartered Private Bank and SEI, is a long-term global initiative launched in 2009 to uncover the attitudes and expectations of elite consumers, according to a statement. It asks them how much they made in the last year and how much they expect to make in the next year.
“So far, we have found wealth confidence for the future consistently outstrips past performance by a considerable margin,” the report said.
This year, respondents’ short-term wealth confidence slipped significantly. In 2010, the gap between wealth confidence and actual performance was 42 points. In 2011, the gap narrowed to 33 points. Confidence fell back several points even in Asia, where increasing numbers of respondents are reporting actual wealth growth.
This year, 3,300 high-net-worth consumers around the world participated in the survey, an increase of 83% over last year. All told, more than 8,000 individuals and wealth creators have now taken part in the project.
In light of the growing conservatism about money, the report considered what high-end companies can do to ensure that they continue to attract and hold on to their most valued customers. It found that clients on average spend more than $17,000 and take 43 days to decide when they do these things:
- Set up a private bank relationship;
- Buy a car;
- Buy high-end technology;
- Purchase jewelry or a watch;
- Buy art or collectibles;
- Make a major charitable donation.
According to the report, even though companies generally deliver a customer experience that is 10% better than clients expect, they should focus more on staff efficiency and smooth order processing in order to deliver a more consistent customer experience.
In addition, companies that segment their client bases should be aware that elite customers’ attitudes differ most by age, behavioral profile and geography, not by level of wealth, gender or whether they are executives or entrepreneurs.
And understanding the nuances between Generations X and Y will enable companies to deepen their connection with existing clients and better manage client retention following the death of the primary wealth holder.
The statement noted that the 3,300 individuals in the new poll had an average wealth of $2.5 million. Thirty-nine percent of the sample group lives in North America, 43% lives in the Asia/Pacific region, 17% in Europe and 1% in other countries. Three-quarters of participants are employees and the rest are business owners.