Wealth X on what we can learn about high net-worth individuals from billionaire behaviour.
For many organisations, billionaires may seem like an unlikely or unattainable client segment. With just over 2,600 in the world, these individuals in the top tier of wealth are among the most difficult to engage due to the numerous gatekeepers they employ.
Even for those organisations that already have billionaires among their clients or donors, billionaires are far from the archetypal wealthy individuals they seek to engage, save for perhaps a few superyacht and jet manufacturers. This relative lack of representation may lead some organisations to discount billionaires as not worthy of serious consideration for development purposes. Why spend time prospecting or developing engagement strategies for such a small community – especially when contact with billionaires is more highly gated than any other group of potential clients?
Some companies may also regard billionaires as less important to their engagement strategy because of the price structure of their goods and services; if they are easily accessible to HNW, VHNW or even UHNW individuals, billionaires may seem like an unnecessary group to target. However, few groups impact HNW, VHNW and UHNW individuals more than billionaires, making it crucial for these organisations to gain a clear understanding of the billionaire demographic and billionaire net worth.
This billionaire halo effect on lower wealth tiers is considerable. For many of the wealthy, billionaires are the ultimate social influencers even when those billionaires are not going out of their way to broadcast their behaviour. In other words, the wealthy are more likely to be susceptible to following the habits and choices of billionaires across a wide range of fields, which is why understanding billionaire net worth is so important.
In philanthropic giving, billionaires continue to have a clear impact. Giving pledges, types of donations, and the demand for accountability have all trickled down across the wealth tiers. The Giving Pledge created by Bill and Melinda Gates and Warren Buffett is perhaps the most prominent example. It encourages the world’s most wealthy to donate more than half of their wealth to philanthropic causes in an effort to create lasting change.
The billionaire influence also extends to luxury goods, perhaps the most obvious area of impact on the wealthy. The impulse to keep up, as much as one can, with the ‘billionaire Joneses’ has inspired purchases and trends within the luxury goods market.
The travel habits of the ultra-wealthy not only alter the way luxury travel firms engage the wealthy but also continue to influence trends in the lower tiers of wealth. Travel agencies catering to the ultra-wealthy are launching divisions that cater specifically to billionaires on sabbatical, which is a growing trend among the ultra-wealthy. These individuals want bespoke experiences they can share with their families or to learn new skills, such as snow leopard spotting with the kids or learning to hunt and gather like our ancestors, a trend that has trickled down to lower tiers of wealth and helped generate a luxury experience economy.
This is evident in the way many high net-worth individuals use social media to show that they are able to partake in similar experiences to the ultra-wealthy. The relevance for hoteliers who cater to a wide range of clients is that an experience-driven agenda is paramount to capturing the interest of any segment of the HNW market – and the more unusual and exceptional the offering, the better.
It is a firm reality of the world we are in that today’s wealthy individuals are aspirational, looking to billionaires for a template to follow. Thus, understanding this wealth tier has a direct influence on how to engage, retain, and develop existing clients who are UHNW, VHNW or even mass affluent.
Wealth-X is a global ultra high net worth intelligence and data company, founded in 2010. Headquartered in New York and London, the company has five offices on three continents and is owned by Insight Venture Partners. The company’s database includes more than 100,000 global records, each representing an individual whose net worth is believed to be more than US$30 million.
Over the past six years, Wealth-X has produced its annual ‘Billionaire Census’ tracking the global growth of the billionaire population and billionaire net worth, and the trends that impact how they spend, donate and invest their vast fortunes.