Aim Rich, Reach Everybody

“The very rich are different from you and me,” wrote F. Scott Fitzgerald in the early 20th century.

“Yes, they have more money,” responded fellow novelist Ernest Hemingway.

Fast-forward 100 years. According to the Worth–Harrison Taylor study on the Status of Wealth in America, Hemingway was right.

Today’s newly minted millionaires—and even some not–so–newly minted—have more in common with the middle class they came from than with the traditional moneyed class. And they’re not hidden away in the kind of rarefied, closed circles that old-money customers often are. But while they have plenty of money to spend, they don’t automatically shop in the places one would expect.

The study, conducted by the Harrison Group and developed with the editors of Worth magazine, was completed in the winter of 2005. It examined the attitudes, desires, and shopping habits of 500 households with liquid (not including real estate) assets of $5 million and above. The findings project out to the 750,000 richest households in America, with an average annual household consumption of $850,000.

The most critical finding was a significant disconnect between marketers’ (including retailers) perception of this group’s attitudes about money and the attitudes the group actually holds. The other key finding was that while this group accounts for 0.5 percent of American households, marketers and retailers who understand how to serve it also will attract ordinary affluent consumers (household income above $75,000). The reverse, however, does not hold true—a business that targets a demographic of, say, $125,000 annual income will not necessarily attract millionaires.

The study also found disagreement between marketers’ beliefs about what makes a business successful and affluent and wealthy consumers’ beliefs about business success. According to a survey conducted by Brandweek, marketers believe consumers think the three top characteristics to be successful in business are, in order, (1) a trusted brand, (2) product matching the customers’ taste and aesthetics, and (3) inherent product quality.

But according to the Worth–Harrison Taylor study, the wealthy (liquid assets of $5 million+) believe they are (1) inherent product quality, (2) matches my taste and aesthetics, and (3) brand trust. And the affluent ($75,000 household income) believe they are (1) quality, (2) price, and (3) brand. Marketers, incidentally, didn’t believe prices or service played any significant role in the success of a business.

Dr. Jim Taylor, vice chairman of the Harrison Group, explains that a brand refers to both store and product. “Jewelers think David Yurman is an aberration, but I think he’s done something very special in this space. Why are jewelers at odds with what the customer thinks?”

Responding to an oft-heard snide comment among jewelers that David Yurman is a marketer, not a designer, Taylor says it doesn’t matter what the industry thinks. If the customer thinks he’s a designer, then he’s a designer.


The very rich, circa 1980 or later, are largely made up of entrepreneurs (see sidebar, p. 94). Thirty-six percent of respondents to the study grew up solidly middle class, 27 percent described their family status as lower middle class, and 22 percent were from the upper middle class. Nine percent grew up in poverty, and only 6 percent grew up wealthy or affluent. Despite the enormous wealth they command now, their attitudes remain rooted in their middle-class upbringing, says Taylor. Eighty-one percent of all respondents and 92 percent of the newest wealthy described themselves as “still middle class” at heart.

Because they weren’t born with the proverbial silver spoon in their mouths, they apply a middle-class approach to value when they want to buy a silver spoon. They also approach shopping with the same careful, value-driven attitude they applied to building their businesses. Their bankers and investors trained them to practice due diligence, and that’s how they shop. They assess the value of saving money against the time available to shop; they avidly comparison shop; and have no qualms about buying an expensive product from a value-oriented merchant, either physical or virtual. Saving money on an expensive purchase can be a great source of pride: It’s almost as if they’ve earned that money, not merely saved it.

To prove his point, Taylor did some due-diligence shopping of his own, online, for a 5.00 ct. D Flawless diamond. Costco, the warehouse club, featured one for $89,000 on its Web site. Tiffany and De Beers each had one, but neither exposed their price on the Web. When he went to see the stones at the firms’ brick-and-mortar stores, he found the Tiffany stone priced at $175,000 and the De Beers stone priced at $200,000—almost twice and more than twice the price, respectively, of the Costco stone he found online.

That the Internet (usually) allows significant price-sensitivity analysis isn’t lost on the newly rich. The Worth–Harrison Taylor study shows the time per week this group spends online (approximately 13.1 hours) is almost as much as the 16.4 hours it spends with newspapers, periodicals, and TV. For the general affluent population (household income of $75,000+), the figures were: Internet, 15.4 hours per week; TV, 13.7 hours; newspapers and magazines, 5.9 hours.

A wealthy customer will pay more for service and expertise—i.e., the shopping experience—but Taylor says if it’s not a brand with legendary cachet, such as Tiffany or Cartier, it had better be an extraordinary experience to justify the price.

“Does the blue box matter? Yes. Does the red box matter? Yes. Does the little brown box matter? Probably not,” he says. People will pay if the brand has meaning or the stone has collectors’ value, but Taylor warns that name cachet also makes a difference at auction. A stone that’s unique has collectible value of its own, but one that’s expensive but essentially replaceable will fetch more at auction if it has the provenance of a famous jeweler, just as it did at the time of purchase.

Not all the newly rich are dedicated to retaining middle-class values. About one-third are eager to show off their wealth conspicuously; for them, designer labels and other trappings of affluence and status are important, says Doug Harrison, president of the Harrison Group. The remaining two-thirds don’t want to be perceived as having fundamentally changed who they are, but one factor is common to all: a fervent desire to avoid looking stupid.

Most entrepreneurs are curious, with a lifelong desire to continue learning, says Harrison. Many also lost a significant amount of money somewhere along the line, and the memory has stuck with them. The significance of one bad relationship or investment has the value of 50 good ones—they never want to make that mistake again.

What they expect in a salesperson, says Taylor, is “affection, respection, education.” They want to like the person they’re dealing with, have the respect of that person, and they want the product of the relationship to be growth. The niceness of the store is irrelevant. What matters is the staff’s knowledge and their willingness to (tactfully!) vanquish the customer’s ignorance. This is a demanding audience, not afraid to ask questions to determine how much the salesperson knows and find out if he or she is a good source of education.


The future lies in serving the connoisseur, say Harrison and Taylor. Taylor defines connoisseurship as making a deliberate purchase of an object in which one pays a premium for scarcity, and having the knowledge base to understand the value of scarcity.

In their study, as the connoisseur makes the transition from mere affluence to significant wealth, a good shopping experience is defined less by how entertaining it is and more by how educational it is. Education is the single biggest service issue, because these customers are relatively new to wealth and need to learn how to spend money.

“It’s about understanding how a $1.50 canvas and $3 worth of paint becomes a Picasso worth $16 million,” says Taylor. Or understanding the subtle performance differences between the Lexus the individual already owns and the $80,000 Mercedes he or she can suddenly afford. Connoisseurs want to understand how value decisions are made, and many manage their fear of being seen as overindulgent by becoming collectors. Collecting, which implies superior knowledge and discernment, has a cachet that mere shopping doesn’t.

Quality is the No. 1 influencer on decision making, and a connoisseur depends on an in-store relationship with a person he or she can trust. A connoisseur wants to learn about value, quality, price transparency, brands, merchants, warranties, and the fine points that distinguish the ordinary from the extraordinary.

In addition to educating the customer, a salesperson also must discern the reason behind the purchase. A simple question (What’s the reason for the purchase?) can open the floodgates and overcome the customer’s anxieties about the purchase—and provide the opportunity to educate, educate, educate.

Taylor cites three main anxieties typical of an up-and-coming connoisseur: (1) that they’ll make an inappropriate purchase, (2) that they’ll pay a price not justified by the brand (e.g., the Tiffany blue box versus the neighborhood jeweler’s brown box), and (3) that they’ll pay a price not justified by the occasion.

Men typically buy jewelry for an occasion, says Taylor, even if the occasion is all in their head. The occasion doesn’t have to be formal, like a birthday or anniversary. It could be a moment of relational importance, or a real or imagined sin he believes he needs to atone for. In that case, the price should be appropriate to the “sin,” which, Taylor says, is something the woman always knows but the man has to guess. On a more serious note, he says, the “sin” can be anything from apologizing after an argument to forgetting to pick up milk to working many late nights. The Kobe/Vanessa Bryant kind of sin offering is probably more the exception than the rule.

Women have a different motivation for buying jewelry, Taylor says. While they do buy it for other women, it’s a more understated message, and when they purchase it for themselves, it’s to accent fashion.

“Men buy jewelry to say what they can’t say. Women buy jewelry to make a statement about themselves and to accessorize their presentation of themselves,” Taylor explains.


Unfortunately, says Taylor, at every step of the way, jewelers have too many opportunities to make a customer feel stupid—or worse, like a criminal. The typical jewelry retailing model is based more on fear of the customer (deterring crime) than a desire to bond with the customer.

Taylor acknowledges that an open counter model wouldn’t work in a high-crime area, but he doesn’t believe the locked-up model should be universal. “If I owned a jewelry store, I’d make a lot of changes,” he says. On his list:

  • Change the floor experience from one of physical denial of a relationship to one in which the salesperson is on the same side as the customer. Traditional jewelry store counters separate people in a way that’s inconsistent with social intimacy, Taylor says. Two women in conversation will typically position themselves at a 120 degree angle, so their shoulders can touch but nothing else will. The counter keeps them 2 to 3 feet apart. That distance is appropriate for male-to-male selling or for a man selling to a woman, but it would be closer for a woman selling to a man. Also, the barrier of the case subtly implies a predator-prey relationship, with the consumer as predator and the store as prey. It also hides the bottom half of each person—the area where, theoretically, they would be hiding a weapon.

  • Both price transparency and the value equation need to be completely rethought. This is especially true for a retailer’s Web site. “All prices are now transparent on the Web, and I can find them out,” says Taylor. “The Rapaport list is online for anyone to see, so the differential between a retailer’s price and what’s available online has to be made up through the salesperson’s expertise and ability to make the customer feel comfortable that he’s making the right decision. You can’t get that online.”
    Taylor says if a retailer helps the customer “get it right” and also save time, price is no object. “Price elasticity is driven by the behavior of the people in the store, not the quality of the product,” he adds.

  • Change the language of most jewelry advertising. Remove the word “luxury” and let the ad tell a story that appeals to the emotions. Taylor cites a Rolex ad featuring Arnold Palmer, Gary Player, and Jack Nicklaus, each wearing a Rolex watch. The ad doesn’t scream out Rolex’s attributes but presents the three well-known golfers simply enjoying a friendly moment.

  • Focus advertising in fewer places, more often. “I believe it’s better to advertise over and over in the same environment, rather than spreading it around, so that there’s a real repetition of the context,” Taylor says.

  • Don’t disappear into the back room to complete a sales transaction. “They take your card and vanish!” Taylor says. “What are they doing? Checking me for fraud? They start with the attitude that you’re a danger to the business and you have to prove you’re honest before they’ll do business with you.”

  • Make sure salespeople treat jewelry sales as a passion or a career. It’s the jeweler’s responsibility to hire the right people and make sure they stay motivated.

  • Build the shopping experience for the first-time customer, not the repeat customer. Established customers will still come back. (See “The DPS Retail Landscape Study: It’s Rough Terrain for Jewelers,” p. 109.)

  • If you use a celebrity spokesperson, make sure it’s a person of character. Examples include Oprah Winfrey, Sir Paul McCartney, Warren Buffett, and Nicole Kidman. Avoid any celebrity who’s made headlines for the wrong reasons.

  • Don’t give design short shrift. Design matters. Quality and fashionability are must-haves.

Taylor cites Borsheim’s in Omaha, Neb., and O.C. Tanner, in Salt Lake City, as good examples of stores doing it right.


The traditional model of marketing to the wealthy is predicated on making them feel exclusive and different—not always something this group desires.

Harrison and Taylor have identified three stages of wealth, which they call apprentice, journeyman, and master. The apprentice stage is typically the first one to five years after a significant liquidity event, during which the individual must learn to adjust to his or her new circumstances. Apprentices are typically in an accumulative frame of mind—but still price conscious. They’re interested in the way money can enhance the well-being of their immediate family, focused on their business, cautious, and somewhat fearful of being so rich. They also tend to feel alone. For a significant jewelry purchase, this customer might select fine pearls.

A journeyman has been wealthy for approximately six to 14 years and is growing more comfortable with wealth. He or she is concerned with leaving a substantial estate but more conscious of objects and beginning to experiment with significant purchases. Someone in this stage of wealth might select big gems for a jewelry purchase.

The master has been wealthy for 15 years or more, is comfortable with his or her position, is conscious of lasting value, and wants to leave a legacy for future generations. Taylor and Harrison believethis customer is most likely to buy a significant diamond piece.

Harrison and Taylor also have identified five types of wealthy consumers and the percentage of each who are likely to be connoisseurs. The first type, “neighbors,” is best exemplified in the book The Millionaire Next Door: The Surprising Secrets of America’s Wealthy (Stanley and Danko, Longstreet Press, 1996). This group is fairly new to money, the most likely to want to be seen as the same people they were before becoming wealthy, and the least developed in terms of behavior typically associated with wealth. About 8 percent might be considered connoisseurs.

Harrison and Taylor term the next group “wrestlers.” This group is still relatively new to wealth and wrestles with what being rich means. About 29 percent are connoisseurs. Members often have a “spend and regret” pattern, says Taylor. If they regret a large purchase, they’ll scale down the next, or assuage guilt over sacrificing family time to make money by splurging on something extravagant for the family. These consumers, he says, are the ones who will buy a 5.00 ct. diamond one day and eat at Denny’s the next—or buy a costly designer gown and wear it with Diamonique (a brand of CZ) jewelry.

“Directors” have been wealthy for a long time, and 27 percent are connoisseurs. They’re heavily Republican (in the original capitalist sense of the party). This group believes that with money comes responsibility—noblesse oblige—and believe in the right of capital to behave as it will. They consider wealth the result of a lifetime of hard work, and harbor no guilt over the amount of money they’ve made. They believe in leaving money to their children, even if that requires manipulating the system.

“Mavericks” are in it for the game, says Taylor. All could be considered connoisseurs to some degree. They’re not interested in showing off their wealth—or leaving it to their children. If they can make money, their kids can make money. They tend to be serial entrepreneurs.

“Patrons,” of which approximately 12 percent are connoisseurs, represent the oldest segment in terms of wealth. Heavily Democrat, this group has moved beyond business to causes (think Bill Gates and Warren Buffett), because what they want most is to leave their mark on the world.

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