Selling to the super-rich

BH: I think that the rehabilitation of the Gorongosa National Park in Mozambique is one perfect example of a unique project. The development is set on a Safari which saves endangered species. The super-rich can feel environmentally responsible when they are spending their money. It is very compelling.

AR: What are the most effective marketing strategies for targeting the super-rich? They must be a difficult group to reach?

BH: The super-rich are not necessarily that difficult to reach, but you do need to go beyond traditional methods of marketing. I favor public relations and the judicious use of resort attractors at high-profile events. Recently the response from display advertising has been disappointing. The best resorts are sold by word of mouth and experience marketing. Social networks are very powerful.

AR: By resort attractor you mean a famous personality?

BH: Certainly, Royal Ascot is famous because Her Majesty The Queen graciously attends each year. Getting the right people involved from the beginning is key.

AR: So the best use of marketing budget is to invest in creating a unique experience, getting the right people involved and using PR to your advantage?

BH: I would also recommend using client referral schemes. Satisfied customers are your best ambassadors and sales force. I always offered my own clients incentives if they made referrals. They delivered a more powerful message than I or any other marketing or advertising campaign did. It was very hard work and I ended up writing to all these referrals individually. They trusted me implicitly and many have continued to keep in touch and have invested in a number of different propositions I have offered them.

AR: What role do IFAs play?

BH: There is a small number of IFAs specializing in this area; for example, Savills Private Finance. They can form an important part of your sales strategy. The key is to get them involved early and use their brand to add value.

AR: How is the luxury end of the market holding up in the economic downturn?

BH: At the moment the super-rich are not buying in any significant volumes and the price of many outstanding properties is crashing towards 10 percent of the original asking price. This is a very volatile market and vulnerable to these extreme price differentials. The super-rich have the choice to lock up or sell for peanuts if they lose interest. I witnessed this before some 20 years ago. Only prime sites in the best resorts deliver enduring value.

AR: Has there been a shift into buying resale property?

BH: (For) completed property -- certainly; the rich like many other people have lost faith that off-plan resorts will ever be completed. The top end of the market has also suffered because of too much high-density development. There are still examples of developments that get it right. I've always admired La Zagaleta even though it was a competitor during my time at Sotogrande.

AR: Finally, what advice would you give to an agent or developer looking to break into this market today?

BH: Learn humility. Remember that whoever you are, you are a servant. Always deliver on what you promise and if you look after your character your reputation will look after itself.

AR: It's been pleasure talking to you. Thanks very much for your time.

BH: You're very welcome.

Copyright © 2009 Global Edge Marketing Ltd.

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