The Millionaire Next Door

According to different reports, the number of U.S. millionaires ranges from a low of 11.5 million to a high of 16 million.  Credit Suisse found that the number of millionaires grew nearly 8% from 2016 to 2017 and the bank  predicts that number will climb another 16% by 2022.  Another study claims that 7 percent of all Americans live a millionaire's lifestyle.  

With their number increasing, the traditional millionaire demographic is changing, making it more difficult for decorative plumbing and hardware showrooms to market to this key demographic. There are a number of wealthy Millennials who can afford a Lexus or Mercedes, but instead opt for ZIP car when they need an auto because many Millennials have no interest in owning a car or the type of car that they drive does not matter.  The Federal Reserve Board's 2017 Survey of Consumer Finance found that 18% of millionaires are under the age of 45.  With a broad range of ages and interests, it has become increasingly important to craft customized messages targeting consumers based on data.

 

However, big data is no longer the exclusive province of large companies. There are services that compile data based on wealth, age, spending habits, interests, causes, work history, number of children, homeownership and other factors for companies with marketing budgets as small as $5,000.  

 

The good news for decorative plumbing and hardware showrooms is that almost every millionaire owns a home and 46% of those have other real estate assets, according to the Federal Reserve survey.  Mobility also is changing traditional homeowners, with many millionaires moving their primary residence or second or third homes to out-of-the-mainstream venues. There is a strong possibility, in light of recent tax laws changes that cap local and state tax deductions at $10,000, that many millionaires will be looking for alternative properties in more tax friendly locals.  

 

Decorative plumbing and hardware can reach more millionaires by using big data to craft individual messages to targets that are considering improvements to their home and by better understanding how they have accumulated their wealth.  Most millionaires fit the profile in the book, The Millionaire Next Door.  These consumers, according to authors Thomas Stanley and William Danco, have common denominators that they have used to successfully build wealth:

 

1. They live well below their means
2. They purchase carefully, looking for quality and value
3. Financial independence is more important than social status
4. They have limited experience with luxury products and brands
5. They save aggressively
6. The target the right opportunities