2013 may scorpio futurewealth paper 4

7/30/2019 2013 May Scorpio Futurewealth Paper 4

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2013 Scorpio Partnership. All rights reserved | 2

FOREWORD

This final paper in this years Futurewealth series, tackles the complex question of whether a companys

investment in digital communication translates into commercial success when it comes to high-valuecustomers.

Inevitably with a complex question, the answer is not straightforward.

The elite companies tracked in this research have all been recognised for having successful digital marketing

strategies and, almost all of them have increased their standing with their customers in the last year. The

research also highlights that companies which create digital opportunities to connect with their customers

have a greater influence on their purchasing decisions.

So, while we may not be able to establish a direct link, these factors suggest that a digital strategy is more

important when building relationships with the worlds up-and-coming wealthy than many, perhaps, realise.

Indeed, once again, we find that the wealthiest among the Futurewealthy and those in the Asia Pacific

markets are those who are most likely to use digital channels to support their purchasing and investment

strategies.

In fact, this series as a whole has uncovered an important and unequivocal truth: wealthier customers are not

just active online, they are leading the charge on the internet. Any firm and banks in particular simply

cannot afford to ignore this fact.

The time to engage is now.

With that in mind, we would like to thank all those who have taken part in the research and especially the

3,477 of the worlds Futurewealthy, who gave their input and have helped us to understand much more about

their digital habits. We hope these insights will act as an incentive to all those who work with this most

dynamic of customer groups to take some bold steps into the future.

Sebastian Dovey

Managing Partner

Scorpio Partnership

Shayne Nelson

CEO

Standard Chartered Private Bank

Alfred P. West, Jr.

Chairman and Chief Executive Officer

SEI


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IN BRIEF

In this series so far, we have discovered the worlds Futurewealthy are much more digitally-minded than

many might think. You could go so far as to say they are interested, engaged and even inspired by thepossibilities that digital technologies present.

Yet, the big question remains: how can those who serve these demanding customers harness the power of

digital technologies to start, build and deepen their relationships? Or, to put it another way, how will the

future of digital marketing influence this high-powered customer group?

In this paper, we look at leading global companies and consider how their approach to digital channels may

have inspired the Brand Love of their Futurewealthy clients. We look at how good these global firms are at

using digital channels to connect with their Futurewealthy customers. And, we stack up how influential

previous experience and digital information are when it comes to the buying and investment choices of the

Futurewealthy.

As with the previous Futurewealth papers in this series, the findings are based on 3,477 responses from the

worlds up-and-coming wealthy who have an average worth of USD1.9 million.

Bites of the cherry

It is notoriously difficult to work out what inspires a purchasing decision. Yet, logic would suggest that the

more opportunities a company creates to connect with its customers, the more chances it has to inspire their

Brand Love.

For the Futurewealthy, luxury car brands lead the field in this respect. Their use of all channels possible to

connect with and influence this high-value customer group is having an impact on the buying choices of

those customers. We also find they top the charts in terms of the Brand Love they inspire in these

customers.

Perhaps, it is not too much of a stretch to suggest these two facts may be connected.

Digital liaisons

In fact, this year we have focused our Brand Love index on just 16 companies that stand out in their sectorfor having a strong digital identity.All of them have been recognised for their online leadership. And, we find

almost all of them have improved their standing with their Futurewealthy clients in the last year.


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In business, only two things matter:innovation and marketing

In brief

This year our Brand Love index is based on 16 firms that have been recognised for the strength of theirdigital marketing campaigns. It shows that almost all of these elite global brands have improved their

standing in the eyes of the Futurewealthy in the last year. Banking brands stand out for having the largestimprovement at 7.2%.

Yet, it is car companies that continue to be the luxury brand leaders. They also dominate for their digitalinfluence. Indeed, their Futurewealthy customers attribute an average weighting of 6.6 out of 10 to online

information when it comes to influencing their purchasing decisions. This compares to a score of 7.6 for

the influence of their previous experiences with the company.

By contrast, the Futurewealthy clients of banks attribute a weighting of 5.0 to the influence of onlineinformation in their investment decisions, versus 6.8 for their previous experiences with the bank.

And, once again, the wealthiest of the Futurewealthy and those in the Asia Pacific countries attributemore importance to online channels when it comes to their banking partners.

ONLY ONE MARKETING STRATEGY WORKS: FOCUS ON YOUR BEST CUSTOMERS

FIRST, YOUR BEST PROSPECTS SECOND, AND THE REST OF THE WORLD LAST

Last century at what you might call the dawn of the marketing age the way companies measured success

was fairly straightforward. The only unit of marketing achievement that mattered was sales.

How things have changed. Today, the cutting edge of consumerism is not just about shifting stock; it isabout making friends. If your customers love you, the theory goes, then they will come back time and time

again, and they will probably introduce their friends.

It is often called relationship marketing and nowhere is it more apparent than at the luxury end of the market,

because high-value customers can become the very best friends of all. If a company wins their love, then the

relationship can be very fruitful indeed.

However, firms cannot afford to be phoney. High-value customers are highly sophisticated. If a company

wants to win their loyalty, then the friendship has to be genuine.


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Car companies top this superbrand league. However, banks have made the biggest strides forward in the

last year. Yet, they still lag behind other sectors when it comes to making these crucial personal connections.

They would probably argue that it is hard to get people fired up by finance. Yet, as these should be

quintessential relationship businesses, one might expect banks to have more than their fair share of brandwarmth or commitment.

Yet overall, their warmth scores are distinctly chilly at 15 degrees lower than the average across all sectors.

Their commitment scores too are far from balmy, down 14 degrees. And, when it comes to excitement, sadly

things turn decidedly frosty dipping 19 degrees from the elite sector average. To put it mildly, banks have

work to do on their relationship skills.

By contrast, when we look across the leaderboard, superbrands generally are very good at sparking warm

feelings among their Futurewealthy customers. Some also manage to whip up a certain amount of

excitement. But, very few have the relationship recipe right to win the devotion of their customers through

thick and thin [Figure 2].

Figure 2: Brand Love average score per quality including the most and least successful

brands

Index based on responses on three relationship dimensions: To what extent do the brands you use excite

you? To what extent do the brands you use make you feel warm? And, would you stay with the brand, even

if it made a mistake? (Average scores for excitement, warmth and commitment, and the top and bottom

brand in each dimension.)

6964

53

Excitement

average

Warmth

average

Commitment

average

Brand Love index score / 100

Mercedes Benz - 84

American Express - 36

Audi - 83

American Express - 50

Ferrari - 70

HSBC - 36


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Looking in more detail at the index, Singapore Airlines is a good example of a relationship all-rounder, with

solid scores on all three measures. Ferrari and Apple, by contrast, may ignite passion in their purchasers, but

where Ferrari drivers might forgive the odd mistake; Apple owners are less likely to do so [Figure 3].

Among the bank firms, Standard Chartered leads the pack as an exciting and warm brand in its sector. As forthe commitment measure, Futurewealthy respondents indicate they are less willing to pardon banks in

general.

What this shows is that elite brands may have different personalities and different qualities, but the

relationships they inspire can be compared. And, it is fair to say that there are real leaders and followers

when it comes to this particular dating game [Figure 3].

Inspiring this kind of deep brand devotion is particularly important when it comes to high-value customers.

They have a huge range of choices when it comes to spending and investing their money.

#FW2012/2013

68% of the FW around the world with a net worth of over USD4 million own an Apple product, making it

the most popular elite brand in the Brand Love index.


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Figure 3: In pursuit of brand perfection

Brand Love measures the excitement, warmth and commitment

customers feel towards the brands they use. It is an indicator of

the whole relationship they have with that brand.


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THE INTERNET REVOLUTION IS LIKE ALL REVOLUTIONS. BY THE TIME YOU REALISE IT

IS HAPPENING, THE WORLD HAS ALREADY CHANGED

Coming back to the question of how leading firms can use digital technologies to build these kinds ofmeaningful relationships with their high-powered customers, we know the Futurewealthy are digitally-

minded. So, it stands to reason that a firms digital presence will probably influence the brand choices of

these forward-thinking buyers.

Indeed, we find the Futurewealthy have both deep personal and deep virtual relationships with the firms with

which they work. They attribute high-levels of importance to their previous experience with a firm when

making purchasing or investment choices. But, they attribute a similar amount of importance to the

knowledge they can glean about that company through online channels.

Looking first at those successful car brands, their Futurewealthy customers attribute an average weighting of

6.6 out of 10 to the online information about the firm. This compares to a score of 7.6 for the influence of theirprevious experience with the company in their purchasing decisions [Figure 4].

Meanwhile, the Futurewealthy clients of leading banking brands rely more on their previous experience with

the bank when deciding to invest. Online sources of information are more peripheral although each digital

channel has roughly equal weight in the clients mind.

So, Brand Love for banks is currently more likely to be built from one experience to the next. Whereas, for

luxury car providers there is a halo of ever-present influencing factors digital and traditional, direct and

indirect.

This raises the tantalising question: should banks become more like leading car companies? If banks, like carcompanies, created a digital halo of touchpoints, would that create more chances for them to influence their

favourite clients and even deepen their Brand Love?

Given the Brand Love leaderboard sweep of luxury car brands, the simplistic conclusion is: yes, the more

ways a firm connects with customers, the more embedded the relationship becomes.


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Figure 4: Brand influence touchpoints leading car companies and banks

When you last bought a product or service from your provider, how influential were the following factors in

your decision? (Importance on a scale of 1-10 for leading car and banking brands.)

7.6

7.4

6.8

7.2

6.6

6.6

6.1

5.8

6.8

5.5

5.8

5.25.2

4.9

4.5

4.3

Previous experience

Ratings and reviews

Website

News articles

Online marketplace

Search engines

Social networking

Blog posts

Luxury cars Banks


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Reinforcing this conviction, we find this same pattern repeated in the ongoing relationship. Luxury car

providers are more effective at using the digital technologies at their disposal to influence at every point of

contact with their most-valued customers [Figure 5].

By contrast, banks are lagging behind when it comes to these crucial digital information flows.

Figure 5: The quality of digital service leading providers

How good was your provider at using online channels? (Performance on a scale of 1-10.)

Banks may argue that there are factors holding them back from building the digital relationships they desire

with their top clients. Regulation, for example, puts parameters around how financial firms communicate with

their clients. However, by focusing on what cannot be done, these firms are running a serious risk of missing

out on what can.


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GOOD DECISIONS ARE BASED ON KNOWLEDGE, NOT NUMBERS

The digital silence is heard more by some groups of Futurewealthy banking clients than others. Indeed, as we

have found throughout this series, it is the wealthiest of the Futurewealthy who see online channels as a vitalsource of knowledge. When it comes to making decisions about their finances, these high-powered clients

are distilling wisdom from many digital sources [Figure 6].

By contrast, it is the less-wealthy among the Futurewealthy who are more likely to rely more on their

experience with a bank and less on other channels when making their decisions.

This strongly suggests that banks need to gear up most for their wealthiest clients. Because, while personal

experience matters to everyone, for the richest good digital resources matter almost as much.

Figure 6: Brand influence touchpoints leading banks

When you last bought a product or service from your bank, how influential were the following factors in your

decision? (Importance on a scale of 1-10 for leading banking brands by wealth segment.)


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The Asia Pacific markets may be a good reference point. Here, Futurewealthy clients report higher

satisfaction levels with the quality of digital service provided by their banking providers. At virtually every

touchpoint, their banks are creating impact with their use of digital channels by delivering news, views,

information as well as keeping in touch [Figure 7].

Less impressed are the Futurewealthy clients of leading banks in Europe and the Americas, where

satisfaction scores slide. In these regions, banks may be using digital channels pretty well to push

information, but wider knowledge sharing seems to be distinctly lacking. As movers and shakers themselves,

the Futurewealthy in these regions want their banks to flex more digital influencing muscle.

Figure 7: The quality of digital service provided by leading banks

How good was your bank at using online channels? (Performance on a scale of 1-10 for leading banking

brands, by region.)


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IF EVERYTHING SEEMS UNDER CONTROL, YOU ARE JUST NOT MOVING

FAST ENOUGH

So, on balance, it would seem that the companies that have embraced the multi-faceted nature of digitalrelationships have created chances to influence that simply did not exist before. While we cannot say

categorically that digital know-how builds the bottom line for firms; it is a happy coincidence that almost all of

the top 16 companies on our digital leaderboard increased the Brand Love of their Futurewealthy clients in

the last two years.

Car companies have driven fastest and furthest into this new territory. Luxury retail and luxury travel are not

far behind. But, banks are only in the chase.

And yet, in the time it has taken you to read these four short reports 1,643 people around the world have

gone online to search for a wealth manager or private bank.

Whether it is fear or folly holding banks back, their clients are surging ahead. What those Futurewealthy

clients are waiting for is a consistent presence and an authoritative voice providing knowledge and views on

the themes of the day. This conversation has already started for the Futurewealthy; they are just waiting to

hear more than an echo from their wealth advisors.

Indeed, the purpose of all four papers in this series has been to understand more about the digital habits of

the Futurewealthy. Our goal was simply to find the digital footsteps for the firms that serve them to follow. We

hope these digital footprints will lead on the journey from where the Futurewealthy are today; to where the

firms that serve them will be tomorrow.

Through all four chapters of this years Futurewealth report, the refrain has been constant: wealth creatorsare at the forefront of the fast-paced digital revolution and the time to catch-up with them was yesterday.


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A FINAL THANK YOU

And finally, in this our last paper for 2012/2013, we would like to take the opportunity to thank the 3,477

individuals around the world who took time to respond to our online survey in the summer of 2012.

All of those who took part in that research are active wealth creators and the average wealth of this group

was USD1.9 million. Yet equally, they are a diverse group and their varied demographic profiles have

allowed us to compare, contrast, learn and understand [Figure 8].

Collectively, those views have given tremendous insight into the digital habits of those on the fast-track to

fortune. We certainly will look forward to meeting them again in the not-too-distant future.

Figure 8: Demographic profile of Futurewealth participants

Total sample

Broken down by:Level of wealth

Gender and work status

Age and region


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2013 may scorpio futurewealth paper 4

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