Luxury firms are generally better off not using celebrity endorsements in their promotional campaigns, since such moves are more than twice as likely to backfire as they are to produce immediate sales results, and more than ten times as likely to produce no result at all, according to a recent survey of affluent consumers.
In fact, luxury products or services may have a better chance on their own to drive sales than receiving help in the form of star power, according to a survey by the Luxury Institute of more than 1,000 Americans with a median income of $250,000 and a median net worth of $1.5 million.
Only one percent of wealthy consumers say that a celebrity endorsement will spur them to purchase a luxury product or service and a five percent say that endorsements will increase their consideration of such purchases. A total of 13 percent of wealthy consumers say they would definitely not consider a celebrity-endorsed luxury product or service. A vast majority (63 percent) says that the decision to buy luxury products and services is unaffected—either positively or negatively—by a celebrity endorsement.
Raising awareness of luxury products and services is one area in which celebrities can produce positive results for a brand, according to the survey. Eighteen percent of the wealthy overall say that celebrity endorsements help them become aware of luxury offerings, and one-fourth of wealthy consumers between the ages of 21 and 39 years old say the same. But only 11 percent of wealthy Americans 55 and up say that celebrity endorsements raise their awareness of brands and organizations.
With regard to luxury goods purchases, celebrities enjoy their greatest power to promote in the choice of fashion designers, with 30 percent of the wealthy admitting celebrity influence in this area. About 25 percent of the wealthy say their choice of bathroom fixtures or china and glassware was impacted by a celebrity endorsement. Celebrities have higher but still minimal influence on the wealthy when choosing retail chains, electronics, home appliances, and subscriptions to business or consumer publications.
Other findings from the report include:
* Less than 10 percent of the wealthy say that celebrities had any influence at all in their selection of real estate brokers and stockbrokers or insurance companies.
* About 20 percent of wealthy consumers did admit to being influenced to some degree by celebrity endorsers when shopping for wealth management firms, along with cruise lines, private jet service, destination clubs, and major universities.
* 45 percent say that celebrities help influence their choices of philanthropies. One in three also said celebrities can affect their choice of luxury hotels and resorts.
* Two-thirds of wealthy consumers say it helps for the celebrity to be seen using the luxury offering in their everyday life and that their use is believable; 30 percent are influenced if the celebrity uses the product in their work.
* 55 percent of wealthy consumers who say that they would not purchase celebrity-endorsed products say they would not do so because they fail to believe that the celebrity really uses the product.
* 38 percent of those who avoid endorsed products say that they believe celebrity endorsements are for mass-market products.
* More than one-third cannot decide whether the celebrity or the pitched product is more important; and one-third say the celebrities are not like them or their peers.
* Among other reasons for avoidance, 27 percent have seen the celebrity pitch too many other products; 20 percent believe the celebrity’s image changes too quickly; and 15 percent cite promotional fatigue.
* Only 19 percent of the wealthy say that they care about an endorser’s looks and even fewer care whether they have met the person.
* The top two personality traits of effective endorsers demanded by more than half of the wealthy are intelligence and charisma. The two next most important traits are friendliness and truthfulness, followed by being energetic and expressive.
* 55 percent of millionaires consider musicians to be bona fide celebrities. Men are more likely than women are to call past business leaders (38 percent vs. 28 percent) and past sports figures (67 percent vs. 57 percent) celebrities, while women are significantly more likely than men to name present-day musicians (67 percent vs. 54 percent), present actors (85 percent vs. 77 percent), and present TV personalities (85 percent vs. 71 percent) as celebrities.
* Tiger Woods, Oprah Winfrey, and Michael Jordan stand out from the crowd as the best celebrity endorsers capable of influencing buying behavior.
* Wealthy consumers named 390 celebrities in the Luxury Institute survey, but only nine of them received mention by at least one percent of the respondents. Six of them with one percent recognition: Arnold Palmer, Donald Trump, Paul Newman, Bill Clinton, Jessica Simpson, and Jennifer Lopez.
* Only 13 percent of wealthy consumers who already purchase luxury goods or services from a firm with a celebrity endorser whose image becomes tainted say they would no longer consider buying the affected luxury brand. Seventeen percent would continue doing business with the firm, while 42 percent of wealthy consumers say that the damaged-goods celebrity would have no impact on their buying decisions.