Making the Most of the Affluent Customer Segment

Making the Most of the
Affluent Customer Segment

How Issuers can effectively reach, acquire and
build loyalty from this profitable consumer group

A Discover® Network White Paper
for Issuers

APRIL 2008

BARBARA MCSTOWE, SR. MANAGER
PRODUCT MANAGEMENT
2500 Lake Cook Road
Riverwoods, Illinois
USA
Main: (224) 405-0900

Web Site: DiscoverNetwork.com

© 2008 DFS Services LLC
All Rights Reserved.

Table of Contents 2 INTRODUCTION
3 Reaching your target segments today is about
INTRODUCTION being relevant more than ever. Long over are the
3 days of ‘mass marketing’ in order to cast the
KEY QUESTIONS widest net possible. Messages and offers have to
7 resonate immediately with your target audience,
DEFINING THE AFFLUENT or they soon move on to other things. Consumers
SEGMENT 8 today are sophisticated buyers with a vast
12 amount of information readily available at their
TARGETING AFFLUENT 13 fingertips. From the ubiquity of the Internet to a
CONSUMERS barrage of competitive options competing for their
15 attention every day through a variety of channels,
TOP MYTHS IN MARKETING consumers are inundated with information and
TO AFFLUENT CONSUMERS choices. The contest for their ‘share of wallet’ and
‘lifetime value,’ means Issuers today must look
DRIVING AFFLUENT LOYALTY for new ways to effectively reach, acquire and
build loyalty with the most profitable customer
TOP TAKEAWAYS segments. The affluent market is just that.

AFFLUENT RESOURCES With spending power, significant spheres of
FROM DISCOVER NETWORK influence and loyalty opportunities that bring
considerable revenue and powerful word-of-
Defining the Affluent mouth potential, the affluent segment is an
Market Segment audience worth understanding. But the affluent
segment can also be confusing. With a variety of
According to Yankelovich, Inc., segmentation definitions and a growing list of
the affluent market segment is sub-groups, Issuers are finding it more
defined as having an annual challenging than ever to successfully hone in on
household income of $150,000 the right mix of communication channels,
or more, and differs messaging and offers. Issuers who take the time
significantly in its purchasing to study these segments and build a concerted
power, buying habits and plan to drive business from them can reap
behaviors than the ‘mass significant benefits in the short term and over the
affluent’ segment (those with long haul.
annual household income of
$100k). 2 ©2008 DFS Services, LLC. All rights reserved.

Yankelovich, Inc. All trademarks are property of their respective companies.

KEY QUESTIONS Researchers at Guideline, however, offer another
• Who are the affluent consumers and how big is segment definition perspective by net worth of
liquid financial liquid assets, where the mass
the opportunity? affluent segment is differentiated from individuals
• How can Issuers adjust current marketing with high net worth2:

efforts to better target and penetrate this It’s understandable why there is significant
profitable group? confusion – every researcher and analyst offers
• What new methods and messaging work best in varied definitions and sizing. Whatever definition
marketing to today’s affluent consumer? and segmentation practice you subscribe to, it’s
• What myths should be understood and avoided clear that this affluent market requires you to
in marketing to this segment? have an in-depth understanding of the
• How can Issuers drive interest and loyalty from relationship between income and spending power
affluent consumers? as keys to cornering this profitable segment. For
• What key take-aways should Issuers recognize clarity and simplification purposes, this paper will
in order to build a successful affluent marketing focus primarily on the following definitions for the
strategy? mass affluent and affluent market segments –
• How can Discover Network and its partners which make up the vast majority of consumers in
simplify an Issuer’s marketing efforts in the broader category, and are defined as:
targeting this unique group? • Mass Affluent | average annual household

DEFINING THE AFFLUENT SEGMENT income of $100,000
Who is this unique segment? According to • Affluent | average annual household income
MarketResearch.com, the affluent segment in the
U.S. can be divided into three distinct groups: of $150,000 or more
• Mass Affluent | one-person, adult households

with an average annual income of $75,000 -
$99,999 or multiple adults per household with
a combined income of $100,000 - $149,999.
• Highly Affluent | one or more adults per
household with a combined annual income of
$100,000 - $149,000.
• Super Affluent | one or more adults per
household with a combined annual income of
$250,000 or more.1

1 MarketResearch.com: The Affluent Market in the U.S., (April 2007); 2 Guideline Trend Report: Investment Preferences of the Mass
Affluent: How Companies Are Targeting, Reaching and Acquiring
primary research taken from the fall 2006 Simmons National Consumer Affluent Consumers, (December 2007).
Survey (NCS).
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Successfully understanding these sub-segments Group also helps identify five important sub-
require insight into the unique lenses from which segments (within the mass affluent group) at
they view the world, and how they make decisions various stages of life, which at their core differ
about the various spending choices at their significantly in spending power as well as in
disposal. There is no doubt that both groups bring demographics and culture. When combined with
spending power, influence and loyalty, although key demographic data, this multi-dimensional
Issuers need to institute different messaging, view offers unique insight into their behavior,
communication channels, offers and processes to including how the mass affluent shop and what
effectively reach them. they purchase. Yes, they share a high-spending
capacity, but they use that purchasing power in
The Mass Affluent Consumer very different ways. These five sub-segments
This burgeoning U.S. middle class is the growing represent widely varying preferences in lifestyle
and ever-more influential mass affluent group, and purchasing decisions, even though their
which has proportionately more spending power income and purchasing power are relatively
than any comparably sized segment in the similar.3
economic spectrum. They buy frequently and often
in volume, and can have a considerable influence Living Large & • Drive mini-vans, station wagons
on their peers. Because of the growing complexity Young Boomers
in marketing to affluent consumers – they are often (Subaru, Volvo)
overlooked by the competition, which may be
unaware of the particular nuances in reaching this • Visit theme parks, enjoy outdoor sports
group. According to Echelon Marketing Group, the • Go on vacations that include sailing,
mass affluent segment represents:
running, health spas
• 12.9% of U.S. households (12.6 million
households), • Watch family shows, read Better Homes
& Garden
• 21.5% of U.S. income, and
• 25.9% of U.S. spending, totaling $1.72 • Choose price over quality
• Recycle
trillion annually.3
Senior Spenders • Drive convertibles, luxury (Cadillac,
Although they are less than 13 percent of U.S.
households, their spending power is tremendous. Mercedes) cars
But distinguishing the mass affluent from the mass
market can be challenging. Echelon Marketing • Own a time share, enjoy “at home”

activities

• Take vacations that entail cruises, sight-

seeing

• Watch Miss USA Pageant, read
Smithsonian

• Choose price over quality
• Drink Cognac

Secure Boomers & • Drive luxury cars and SUVs (Lexus,
Seniors
Honda)

• Own a time share, go power boating
• Spend vacation / weekends at home,

purchase all
inclusive packages

• Watch 20/20, Without a Trace, listen to

Oldies

• Are career-oriented, gadget-oriented

The Echelon Marketing Group: 5 Sub-segments of Affluent Consumers

3 Echelon Marketing Group: Targeting the Mass Affluent: the Spending
Giants, (May 2007).

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(Chart cont’d) The following chart reveals the varied income and
spending power of each sub-segment.

Big Spending • Drive compact SUVs, mid-size (BMW, Living Large & Young • 3.9 million households
Generation X Boomers • Age range: 35-49
Up & Comers VW) cars • 32.7% of mass affluent spending
• $562.2 million in annual spending
• Like to entertain, visit theme parks
• Take vacations that include sailing, • 1.88 million households

scuba diving, Caribbean beaches Senior Spenders • Age range: 65+
• 16% of mass affluent spending
• Watch the Simpsons, listen to
• $275.8 million in annual spending
contemporary hits
Secure Boomers & • 3.59 million households
• Are ambitious, materialistic Seniors • Age range: 50-64
• Are brand name conscious • 26.4% of mass affluent spending

• Drive mid-sizes, SUVs (BMW, Ford • $454.4 million in annual spending

Explorer) Big Spending • 1.64 million households
Generation X • Age range: 18-34
• Are leisure-oriented, visit theme parks • 13.5% of mass affluent spending
• $232.2 million in annual spending
Vacations include backpacking, hiking,
national parks

• Watch NASCAR, listen to classic rock
• Are influenced by kids in decisions,

brand name conscious

Up & Comers • 1.58 million households

Myths around this segment abound, but the biggest • Age range: 35-49
myth of all is that creating mass messaging to reach • 11.4% of mass affluent spending
this audience will yield the best results. This group
lives differently and spends differently, and it takes • $195.4 million in annual spending
a concerted plan of attack to influence their
behavior. For example, most of the mass affluent The Echelon Marketing Group: Spending preferences of the Mass Affluent
households may be concentrated in specific
geographic hubs, so marketing to the entire country The Affluent Consumer
would deliver less than optimum results. Collecting The highly affluent consumer (annual household
and analyzing the right data, including multiple income of $150,000 or more) controls nearly half
facets of information about the segment, will of the U.S. aggregate household income1,
produce far better results and ROI. according to MarketResearch.com, and is
estimated at more than 14 million Americans.1
This group is expected to produce an aggregate
household income of $4.6 trillion by 20111, so
their spending power, influence and loyalty are
certainly topics Issuers should be focused on.
According to the Mercator Advisory Group,
affluent consumers spend on average $3,235 per
month on all of their general purpose cards,

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which is 2.9 times more than the amount the Aside from demographics, affluent consumers
average consumer spends.4 This segment also have several other core value and life aspiration
spends five times as much on travel and characteristics that further define the group.1
entertainment (airline, hotel, car rental) as the First, they are generally content with their lives.
average consumer, and is more likely to spend on Although money is not everything, it does appear
family-related activities. As a group, the affluent to impact consumers’ contentment levels.
segment is highly loyal, and they hold a relatively Affluent consumers are also concerned about
optimistic outlook on their household finances.4 their image, are more likely to influence others in
The affluent consumer also has a number of other purchase decisions, and are comfortable taking
key demographic factors that can help Issuers risks. Second, as far as finances are concerned,
understand where and how they live.1 Overall, the affluent consumer has a strong sense of
affluent consumers are: financial security and is confident about
• Highly educated and work for their money. This managing their own finances. They are also more
likely to pay with plastic and pay off the entire
group is far more likely to be college graduates balance each month. On average, they spend
or hold graduate degrees. They are also far nearly one out of every three dollars in the U.S.1,
more likely to be employed full-time or are self- and spend more than twice the average on
employed. apparel. Although they shop more often and
• More often homeowners and have family claim to enjoy it less than the average consumer,
households. About 87 percent of affluent they also tend to reject “sales” and “bargains,”
consumers own their home, versus 65 percent but respond positively to “deal” and other types
of other consumers. Affluent consumers are of incentive offers. Third, their leisure time is
more likely to be married and have children, spent differently than the average consumer: they
and often both parents work to support their tend to be more physically active, are drawn to
family. downloading music, have large plasma and flat-
• Concentrated in the Northeast and Pacific panel TVs, they upgrade their PCs more
Regions and in large cities. Almost 28 percent frequently, and they spend more time shopping
of affluent consumers live it the ten largest and surfing the Internet and consider it an integral
metropolitan areas (compared to 20 percent of part of their lifestyle.
other consumers).

4 Paterson, Ken; Mercator Advisory Group: The Marketing Opportunities ©2008 DFS Services, LLC. All rights reserved.
Among Affluent Rewards Credit Cardholders, (July 2007). All trademarks are property of their respective companies.

6

HOW TO BETTER TARGET AFFLUENT to augment an existing database. This assists
CONSUMERS WITH CURRENT EFFORTS tremendously in building out target profiles
Clearly the mass affluent and affluent segments to improve the clarity and precision of the
require different approaches, and ‘mass market’ segmentation strategy.
messaging and programs are likely to be relatively 2. Analyze existing marketing coverage,
ineffective. Issuers can take a two-pronged messaging and offers to determine where
approach in reaching these segments, both by changes to current efforts should be made.
revamping existing efforts for a more immediate Current efforts may be blanketing a region or
impact, and by launching new programs that the entire country with the same message
leverage current segmentation and targeting tactics and offers, and ballooning marketing spend
for maximum reach and ROI. levels on channels and activities that are

There are several key approaches to enhancing and unlikely to yield the most ROI. Once the

augmenting current marketing efforts to develop a segmentation strategy, messaging and offers

precise and successful segmentation strategy: are in place, adjust the communication

1. Know your customers, know your markets. vehicles and geographic coverage to ensure

Comprehensive data must be collected and the right message and offer gets to the most

analyzed on existing customers and targets likely prospect in the right way, and at the

already held in the marketing database. right time (i.e. seasonal incentives).

“Know Your Customer” has 3. Study up on what

multiple implications here. Not The Internet is dramatically communication channels

only must Issuers ensure they changing media have the most impact with

are complying with industry consumption habits; mass affluent and affluent

regulations, they must also affluent consumers are consumers to maximize
increasingly ‘tuning out’ TV marketing spend in the right
understand who current
and more often turning to places. While traditional
customers and who new
the Internet for online print media still has its place
targets are through a multi-
versions of their favorite in the world, the Internet is

dimensional lens. A newspapers and magazines, dramatically changing media

comprehensive data-set on a streaming video and consumption habits among

consumer should include Internet radio.1 the mass affluent and

demographic and economic affluent bases. Mass affluent consumers still

data, as well as behavioral and lifestyle generally turn to television for information

information. Issuers that have a lack of deep and entertainment; however, the affluent

internal data should consider purchasing data segment is increasingly “tuning out” on

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television and traditional print, and more strategies 1-4 above to this effort). Mass

heavily relying on the Internet for online affluent and affluent consumers are highly

versions of newspapers and magazines, motivated to feel youthful and stay fit, so

streaming video and Internet radio.1 Although taking advantage of marketing opportunities

affluent consumers overall tend to express around their leisure activities and lifestyle

negative feedback about advertising in general, preferences with existing partners or retailers

they do at least expect it to be entertaining; a can create immediate opportunities for

helpful tip when planning ad programs, and business growth. Promotions around sports,

obviously the root of successful campaigns physical fitness or gym memberships can

launched in recent years by Issuers such as help fuel new customers from the 17 million

Capital One (“What’s in your wallet”), and affluent Americans who engage in regular

Citibank (identity theft series). physical activity, and more than 8 million

4. Prepare to track and analyze new data based who do so at a sports gym or club.1 Fashion

on adjusted marketing efforts, and reset goals is another lifestyle category in which more

and target metrics as than 24 million affluent

necessary for continual Affluent consumers today are adults spend money to
improvement and optimal fare more concerned about purchase the latest trends

program performance. Before managing their time and accessories each

changes to existing efforts are efficiently, having a sense of season. With more than $90
launched, be sure to set goals social responsibility, and billion1 spent annually on
and metrics by which the focusing on the welfare of the fashion category,
changes can be measured. their families than they are affluent Americans
Making multiple changes at contribute a large portion of
the same time can lead to about their status or owning the spend, and represent
items simply to be different. 2

confusion about which change another significant

had what impact. Creating multi-dimensional opportunity for business growth.

yet independent campaigns around each NEW METHODS AND MESSAGING TO
segment can help more quickly determine what PENETRATE THIS PROFITABLE
changes and new aspects are adding value, SEGMENT
and which are falling short of the new goals.
5 . Take advantage of ‘low hanging fruit’ The past fifteen years have seen several change

agents dramatically impact the mindsets,

opportunities for messaging and promotions

focused around key lifestyle, behavior and

buying preferences (and be sure to also apply

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behaviors and buying patterns of the affluent An inherently competitive nature is often a key
consumer. While tried and true methods for character trait that drives affluent consumers to
planning a marketing strategy still apply (collect strive for success. Years ago, competition and the
data, build segmentation strategy, craft messages desire to “always be on top and win at all costs”
and offers, launch, track, analyze and adjust), it is was an important emotional factor that drove
imperative that Issuers understand the nuanced behaviors and purchase decisions. Today,
changes in attitudes currently reflected by this however, affluent consumers are far less
group. New mindsets have emerged based on interested in being competitive than they are in
economic shifts, the political climate, market having a deeper and more value-driven set of
fluctuations and the expansion of the affluent base principles that guide the decision process on
itself (more people are affluent today than ever what brands to associate themselves with.2 The
before, and expectations for quality, service and “take as much as you can get” attitude has
exclusivity continue to increase). The latest shifted to a more meaningful sense of
approaches in reaching this profitable segment conservatism, responsibility to themselves and
require an in-depth understanding of new attitudes their families, and concern for the environment.
and outlooks. Issuers that understand this attitude shift can tap
into the emotional aspects of principle-driven
Although exclusivity is still an important attribute to buying decisions.
this sector, according to Yankelovich, it’s far less
important and overt today than it was ten to fifteen A decade or more ago, affluent consumers were
years ago.2 Affluent consumers report a also more likely to make purchase decisions
diminishing desire to obsess over buying and based on being “trendy.” Today, however, this
owning items or services just for the sake of being segment is more concentrated on connections
different. Today, they are far more concerned with with like-minded peers and trusted influencers
efficiently managing their time and leveraging than on following trends.2 Although that doesn’t
products and services that help them to do so. outweigh their desire to still wear the latest
Issuers that can tap into this sense of time fashions and drive the newest luxury car models,
management and offer time-savings and efficiency- it does mean referrals and connecting with other
related services and value add products or affluent consumers, and being more conscious of
partnerships will successfully reach a large portion others, has more impact on behaviors and
of the affluent segment.

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spending patterns than ever-changing social have a detrimental impact on customer loyalty,
trends. and on an Issuer’s ability to successfully acquire
new customers. So knowing what not to say and
While affluent consumers tend to focus heavily on do, is just as important as knowing what to say
their work and leveraging time-saving and do. Here are the top myths not to get caught
opportunities, they have also come to recognize by, according to the Luxury Institute:5
that their financial stability and wealth status 1. The wealthy made their money easily, and
affords them greater occasions to put the ‘thrill and
enjoyment’ back into everyday life. 2 As a result, they spend their money easily. Not true.
Issuers that can tap into this segment’s desires to Most wealthy individuals have worked
take new, but calculated, risks can create tirelessly and given great sacrifice to make
significant brand awareness and loyalty. their money. Issuers that can recognize and
acknowledge their achievements, deliver
So the new mindset of affluent consumers offers compelling emotional benefits and position
unique insight into shifting attitudes, preferences offers as a complete experience with an
and buying behaviors. Luxury goods and services appropriate reward will have the best
are far more apt to justify quality rather than state opportunity for success.
their identity. Affluent consumers prefer to live a 2. The wealthy are conspicuous consumption
certain lifestyle that doesn’t force them to sacrifice machines living in another reality. Not true.
their time or deeper purpose. They also know that Wealthy individuals who live ostentatious,
while ‘winning’ means continued success, it does opulent lifestyles are often portrayed as
not define or dictate every decision they make. They stereotypical wealthy consumers, but are the
have to work to create more meaningful and minority. In reality, most wealthy consumers
interesting life experiences, rather than expecting it are value creators, who seek quality and
to come automatically as a result of their financial value, including authentic prestige, in luxury
success. goods and services. Effectively marketing to
them requires acknowledging their basic
TOP MYTHS IN MARKETING TO human values and their well-rounded and
AFFLUENT CONSUMERS balanced nature.
Myths about any segment can negatively impact 3. The wealthy can't really define luxury. Not
strategy and therefore results. The affluent true. Luxury consumers can more likely
segments are no different. More importantly, distinguish attributes of a luxury brand,
getting the message wrong time and time again can discern differences between brands – and

5 The Luxury Institute: The top ten myths about luxury consumers,
(August 2007).

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likely better than any luxury marketer. Their through trusted luxury sites will help drive
definitions are laser accurate, so Issuers should brand awareness and connections to trusted
ensure that the brand offers something truly brands.
unique and can be perceived as exclusive. 7. The wealthy don't use ratings and reviews to
4. Luxury goods are a far larger industry than make purchasing decisions. Not true. The
luxury services. Not necessarily true. Luxury Luxury Institute found that over 80 percent of
goods such as couture fashion, watches and wealthy consumers use ratings and reviews
jewelry get all the attention, yet, are dwarfed by sites to facilitate purchasing decisions.
the size of luxury services such as wealth Although the ‘super affluent’ often rely on
management, travel and leisure, security, etc. trusted experts, a large majority of affluent
Innovative services are expected to grow faster consumers have middle class values and lead
and more profitably than luxury goods in the regular lives that include seeking information
future. from ratings and reviews sites and
5. The wealthy don't participate in consumer publications. Issuers again should maintain a
satisfaction surveys. Not true. Wealthy clear brand image and avoid conflicting or
consumers provide feedback and respond to biased messages that turn off savvy
surveys, sometimes more that the general consumers.
population. Most wealthy consumers are highly 8. Luxury marketers should be targeting only the
educated business people. They recognize the wealthiest clients. Not true. Luxury brands
value of feedback and will provide their’s that seek to serve only the US$100 million+
candidly to brands they trust. No metric is more net-worth consumer are usually small and
highly correlated with financial success than often have fairly low profit margins. The truly
customer satisfaction. Issuers should solicit under-served wealthy, in luxury goods, and,
and measure their customers' feedback and especially in luxury services, are households
continuously seek to improve customer with a net worth from US$1 million to US$50
satisfaction to remain competitive. million. Their lives are busy, and often
6. The wealthy don't use the internet as much as complex, and require many types of trusted
other consumers. Not true. A recent survey by advice.
the Luxury Institute found that the vast majority 9. Wealthy clients do not give referrals. Not true.
of wealthy consumers are regularly online. As Research with wealthy and ultra-wealthy
they work long hours, and are more time- consumers indicates that the vast majority are
starved, they turn to the Internet for researching willing to refer trusted brands to friends and
goods and services, and to transact. family. Issuers that can create an effective
Opportunities to market and promote online

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referral program can build a successful growth affluent consumers, and ensure it invokes the

path. right message and connotation with the various

10. Wealthy consumers are not very loyal since they sub-segments of the affluent base. Once defined,

can go anywhere. Not true. The majority of effectively communicating that value means

wealthy consumers are among the most loyal targeting the right communication channels at the

customers. But their loyalty must be earned right time, such as the leveraging the Internet,

with great service. Ratings show that most online magazines and trusted partner brands.

luxury goods and services firms have yet to

internalize what brands such as Ritz-Carlton, Second, Issuers should focus on building

Nordstrom, Neiman Marcus, and Bessemer opportunities for a unique and whole customer

Trust inherently know: that the entire customer experience, and finding differentiating service

experience, from A to Z, must be at a level that opportunities that truly set them apart from the

makes customers happy to do business with competition. While quality and value always

the brand. Issuers than can stand apart with remain a priority, the expected revenue potential

unique value and exclusivity, while delivering a from innovative services will outweigh luxury

whole brand experience, are poised for goods growth in the coming years.6 Issuers that

tremendous loyalty building growth. can derive exclusive services designed

DRIVING AFFLUENT LOYALTY specifically around affluent lifestyles (i.e. nanny
With the data in hand, an in-depth strategy on
services, concierge services, and medical

acquiring new customers, and a solid services) can create significant loyalty depth and

understanding of common reap considerable rewards over

marketing myths that can derail Building loyalty among the short run and long term. A

even the most well planned effort, affluent consumers is as decade or more ago, affluent

the next hurdle in targeting the multi-dimensional as their mindsets focused on materialism
affluent consumer is building lifestyles and personal and status, but today, effectively
loyalty. Loyalty among affluent preferences. reaching them requires

consumers is as multi-dimensional as their understanding their new

lifestyles and personal preferences. That said – priorities of managing and maximizing busy

there are a number of operating rules that can help schedules, and finding more purpose in their

programs drive loyalty and lifetime share of wallet. every day lives. Tapping into such unmet needs,

unfulfilled wants and emotional insights with the

First, Issuers must create a unique and consistent,
yet clear and exclusive brand image in the minds of

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right message and offer mix, helps create interest improve the lifetime value of customers by

and lasting loyalty. following some key takeaways as they plan for a

concerted marketing effort against this segment:

Third, Issuers much keep careful watch to track and 4 Set key performance metrics goals and be

measure customer satisfaction, and make it diligent about collecting, analyzing and

paramount to program success. The continual leveraging data to become experts in

monitoring of this key performance indicator is understanding customers, and to track and

crucial to help affluent marketers stay in lock-step adjust programs for ongoing improvements.

with changing customer preferences and attitudes What programs worked ten, five or even one

toward brand traits that are being used to build year ago may not be as effective – or work at

loyalty. How can Issuers build strong loyalty if they all – today. Resting on “tried and true”

don’t have a timely pulse on what affluent methods is a misnomer. Any affluent marketer

consumers are currently being loyal to? planning to just “do what we’ve always

done,” is likely to see diminishing returns on

Finally, loyalty among affluent consumers runs deep their investments. There are no methods that

– deeper than the mass market segment. Issuers continue to work as effectively over time.

seeking to build lifetime value and increase their Consumers learn, change and adjust their

share of wallet should create high-value incentives preferences based on the economic climate,

into easy-to-manage loyalty and referral programs. the geo-political environment, their personal

With large spheres of influence and significant financial state, life stage changes and many

word-of-mouth power, the affluent other factors. Being able to

segment – once penetrated – can Delivering on the brand stay nimble and adjust
grow organically over time without image requires that every programs to reflect and stay
incremental increases in focus and customer-facing corner of in lock-step with changing
spend levels, due to the power and the company is consistently consumer behaviors and
viral nature of referral-based engaged – from sales and spending patterns is only
programs. marketing, to cardholder accomplished if the data and

services and technical

TOP TAKEAWAYS support. analysis is readily at hand,
The affluent consumer is clearly and Issuers take the time to
gain an in-depth understanding of their
one worth understanding. Issuers that can adjust customers and prospect targets. Then Issuers
can demonstrate where the program lands
current efforts and also create new strategies to against planned metrics and strategic

penetrate the segment can reap significant rewards.

Issuers can generate considerable profit growth and

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objectives, and be ready to adapt quickly and 4 The one-size-fits-all approach does not apply;

make adjustments as needed. be sure to customize the message as

4 Differentiate the credit card offering and the specifically as possible to the individual

brand to create a unique and memorable brand affluent sub-segments and create specialized

image and lifestyle connection in the mind of communication channels and timing plans for

affluent targets. The most effective Issuers each program. Offers must be relevant, timely

spend time analyzing the market, competitive and personalized – giving consumers the

brands and buyer behaviors to impression that the marketer

understand what brand Issuers should consider truly understands how they

position and reputation they building affluent-focused think and live. That approach

want to own in the affluent ‘cross functional’ teams – makes the ‘selling and
consumer’s mind, and what able to understand marketing’ aspect of the
offers will be most attractive to communication simply
the segment. The brand everything from messaging disappear in the minds of the
attributes must be clear, nuances to what audience. They focus more
consistent and uniquely set on how they can take
organizational muscle is
required in order to win.

apart from anything else advantage of the deal or

available in the market in order to make an incentive, how they can work it into existing

impact. Carrying the brand image and message plans, or leverage it to make the most of an

to every customer-facing aspect of the already busy schedule. Marketing that doesn’t

organization is critical – from sales and sound like selling is far more effective than

marketing, to cardholder services and technical hard selling with time-pressured deals or fear-

support. Consumers in general are wiser than based approaches. Focus messaging and

ever – given the advent of the Internet – but offers around lifestyle choices, time savings

affluent consumers are wiser and also more and efficiencies, ‘giving back’ to the

educated. That means any inconsistencies in community and world, and on affluent

the perceived brand image are quickly consumer wants and values. Issuers should

identified and often cause them to disengage also choose well-trafficked and trusted

from the brand altogether. Worse yet, communication channels to deliver the

consumers who do not trust a brand will pass message – such as via the Internet (online

on negative word-of-mouth feedback more often newspapers and online magazines) and

and to a wider audience than those with a through trusted partner brands.

positive experience. 4 Employ a services innovation strategy in order

to discover new ways to meet unmet and

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unfulfilled needs closely associated with buying should partner with their payments network

preferences and lifestyles of the affluent as well as best-in-class providers that can

segment. Issuers that ultimately win over the simplify the job and help increase the

long term understand that unique and high- chances for considerable success. The next

touch service offerings can set them vastly section of this paper outlines several trusted

apart from the competition, and help build partners of Discover Network to consider

lasting loyalty based on strong emotional ties to when building such relationships to help

the brand. Developing a unique way for guide and drive profitable results.

consumers to access cardholder statements 4 Prepare the organization internally (people,

and account updates, instituting email-based processes and technology) to evolve often

fraud and account alerts, and integrating and evolve quickly when ongoing program

partner services into one packaged, easy to reviews reveal that program updates and

manage, simple to deploy offer are just a few of enhancements are necessary in order to

the latest trends in services innovation. Issuers continue meeting set performance objectives.

on the cutting edge of finding new ways to Yes, it’s always difficult to do all the planning,

deliver a valuable and memorable service development and organizational work just to

experience will build lifetime value and loyal get the program off the ground in the first

customers for years to come. place, let alone change it frequently. That said

4 Leverage specialty vendors to help with the – it is imperative to recognize when change is

“heavy lifting” around data acquisition, data necessary, and Issuers that are able to build

analysis and management, Success in marketing to an organization that can stay
program development and affluent consumers takes nimble and flexible – without
management in order to diligent planning, deep going off track – have greater
simplify the effort and increase demographic and behavioral advantage here. Expert
the chances for ultimate, long- resources that can collect
term success. The good news is data, brand and offer and interpret data and deliver
although it can be a complex differentiation, and an sound analyses and change
effort, Issuers do not have to go recommendations are an
it alone. There are experienced organization-wide absolute requirement for
specialty vendors that serve to understanding of how to success in this market
support other providers measure and adjust when (whether they are in-house or

the market calls for it.

marketing to the affluent consumer base. From outsourced to an expert provider). Processes

data acquisition and analysis to program must also be tailored to adjust easily when

definition and loyalty-building services, Issuers program requirements change. Technology

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All trademarks are property of their respective companies.

should help facilitate data collection and leverage the Premium Card to:
analysis, and simplify the launch, management
and tracking of a variety of programs through 4 Increase incremental revenue – the product
multiple communication channels and in carries higher revenue due to the segment of
various stages of deployment. Most consumers for which the card is designed;
importantly, the Issuer should consider these consumers have significant purchasing
developing an affluent consumer-focused power with higher than average tickets and
‘cross-functional team’ that consists of greater purchasing frequency.
members from each major functional area
within the organization. This team becomes the 4 Improve cardholder retention – the additional
internal segment subject matter experts needed cardholder segmentation provides another
to help guide requirements and lobby for product the Issuer can use to retain its
necessary changes while helping to drive and existing cardholder base.
manage all the layers as needed. In reality, this
team serves as the “affluent specialists” – who 4 Increase spend in customer base – the
thoroughly understand the nuances necessary Premium Card is targeted to high-spend, high
to successfully reach this segment, and what volume consumers. To encourage usage, the
organizational muscle is needed behind it in Premium Card carries additional
order to win. enhancements, benefits, and discounts that
support higher spend and use by the
AFFLUENT RESOURCES FROM cardholder.
DISCOVER NETWORK AND ITS
PARTNERS The Discover Network Premium Card also offers a
Discover Network believes strongly in the power of
segmentation and in the power of expert business suite of features and benefits that Issuers can
partners. The affluent base offers significant
opportunity for Issuers, so in order to help leverage, including a variety of support services
capitalize on the affluent market opportunity,
Discover Network launched its Premium Card such as Concierge Service. Concierge services
product in 2007. Designed to appeal to high-spend,
high-volume consumers who demand a credit card include:
rich in rewards and additional benefits, the
Discover Network Premium Card offers superior • Restaurant • Music/Theatre
customer service and unique value. Issuers can recommendations recommendations

• Restaurant reservations • Music/Theatre
reservations/tickets
• Hotel recommendations
• Hotel reservations • Sporting Event tickets
• Car rental reservations • Airline reservations
• Car service/limousine • Airline flight status
• Cruise reservations
reservations
• Visa/Passport information • Custom travel packages
• Golf course tee time • Gift purchasing

reservation • Vacation packages
• Spa/Health club

reservations

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All trademarks are property of their respective companies.

Discover Network also offers high-end training and For more information on Yankelovich, Inc. visit
marketing materials that help develop www.yankelovich.com, or send email to
differentiated programs and targeted marketing [email protected].
messages. In addition to a robust rewards program,
additional card benefits from Discover Network also Mercator Advisory Group is the leading independent
help ensure the program is competitive and unique: research and advisory services firm exclusively focused
• Travel Benefits on the payments industry. Mercator's subscription
research practices include credit, debit, prepaid, and
– Auto rental loss and damage insurance international advisory services, as well as recently-
– Travel delay insurance launched retail and corporate banking practices.
– Travel accident insurance Mercator's subscription and consulting clients include
– Roadside dispatch leading card issuers, acquirers, processors, networks,
– Emergency card replacement and payment technology providers.

• Shopping Benefits For more information on The Mercator Advisory Group
– No preset spending limit visit www.mercatoradvisorygroup.com, or send email
– Purchase protection to [email protected].
– Extended product warranty
LesConcierges Inc. Founded in 1987, LesConcierges is
• Personal Services the world leader in assistance-based loyalty solutions.
– Concierge service LesConcierges is renowned for delivering customized
– 24/7 Live customer service programs that reinforce company business goals while
– Year-end statement summary responding personally and flexibly to individual
customers’ needs. Our multiple, seamless modes of
• Security Features delivery—on-site and virtual —make our services easy
– Identity theft protection to use and highly relevant, producing a demonstrated
– Zero liability return on investment for sponsoring clients.

For more information on Discover Network Premium Card LesConcierges serves over 25 corporations and 5
or other support services, visit DiscoverNetwork.com or million customers worldwide, including 6 of Fortune’s
contact your Discover Network Relationship Manager. 100 Best Companies to Work For. We staff more than
35 locations worldwide, including service centers in
DATA AND ANALYTICS PROVIDERS San Francisco and London and we offer a
comprehensive breadth of services and resources
Yankelovich, Inc. Since deep demographical and through affiliations with more than 30,000 vendors
behavioral data is paramount to success in marketing to worldwide. Our technological and operational
affluent consumers, Discover Network has partnered with infrastructure allows us to serve small and large
Yankelovich, Inc. – a leader in generational marketing companies alike, scaling to virtually unlimited
since 1958. Their extensive data set includes not only membership levels when required.
current demographic data, but also data on consumer
attitudes, beliefs, behaviors and aspirations. The firm For more information on LesConcierges, visit
can help Issuers better understand which consumers to www.lesconcierges.com, or send email to
target, and how to make their products and services [email protected].
most relevant to them. Yankelovich employs seasoned
marketing experts that offer data analyses on who buys ABOUT DISCOVER NETWORK
what from whom, and why. Such data mining insight Discover Network, a business unit of Discover Financial
helps Issuers better target affluent consumers with Services, is a comprehensive and secure payments
magnified precision and segmentation expertise. network. Discover Network markets and supports a full
range of credit, debit, and prepaid cards, including the
Discover Card. Discover Network also provides
customer-centric tools and programs designed to help
issuers, acquirers, and merchants drive loyalty,

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All trademarks are property of their respective companies.

increase transaction volume, and run their business knowledge, Discover Network sets itself apart by
more effectively, with streamlined efficiencies. delivering meaningful and differentiated solutions.
Connecting to millions of merchants throughout the U.S., Discover Network’s straightforward and collaborative
Canada, Mexico, Central America and the Caribbean, approach combined with its brand-driven economics
Discover Network Cards are increasingly becoming a provide a fresh new brand choice for issuers, acquirers
leading payments choice for purchases made around the and merchants that want to reach more customers
world. more profitably.

Leveraging its legacy of fraud prevention, customer
service, and innovative partner marketing practices, as
well as its hands-on merchant, issuing, and acquiring

DFS Services LLC

2500 Lake Cook Road
Riverwoods, Illinois

USA
Main: (224) 405-0900
Web Site: DiscoverNetwork.com

NOTICE

While Discover Network endeavors to provide accurate and detailed information, DFS Services, LLC presents this white paper without any express or implied warranties
of any level and it is provided "as is". It is the reader’s responsibility to evaluate the accuracy, completeness and usefulness of any opinions, advice or other
information provided in this white paper.

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All trademarks are property of their respective companies.