John Houseman, the Academy Award-winning actor who had a late career as a corporate pitchman, famously said for Smith Barney investments, "We make our money the old-fashioned way. We earn it."
Marketing researchers label one group of Americans who took that slogan to heart as the "New Mass Affluent," and marketers covet their spending.
The New Mass Affluent category is big — 19 percent of all U.S. households. Its members have incomes double the national median and have more than $100,000 in income-producing assets. See why marketers chase them?
While those in the New Mass Affluent category are abundant and are in the same general age range, they are far from homogeneous. Marketers must work to understand them.
Backgrounds are modestThese baby boomers (born 1946-64) grew up in households led by members of the Greatest Generation, graduated from college and earned their money. They didn't inherit it.
They live in "second cities" such as Nashville more than in the large metropolitan areas such as Chicago, New York or Los Angeles that traditionally have been home to the wealthiest Americans.
Even if they grew up modestly, the New Mass Affluent market does have a love for luxury and status-symbol products. According to Mediamark Research & Intelligence, the group indexes high for vacation home ownership, foreign travel and owning the latest technology.
The group also is more likely to belong to country clubs, donate to the local National Public Radio affiliate and own big-screen television sets.
Despite those consumption proclivities, they also shop at discount stores such as Costco, wear costume jewelry, drink domestic beer and clip coupons for groceries and household products. How's that for a paradox?
The oldest members of the New Mass Affluent market are entering their 60s. They are moving from a life of asset accumulation, through the empty-nest period and on to planning for retirement. The Bank Administration Institute estimates that more than $16 trillion in assets will pass through boomers' pension and 401(k) plans.
Report profiles boomersThe Nielsen Co., which deals in market and media research, recently released its "Affluence in America" report and found that these affluent boomers "are sophisticated consumers who often tune out traditional marketing strategies. Perhaps most challenging of all, many simply don't think of themselves as rich," said Jane Crossan and Mike Mancini, vice presidents at Nielsen.
Nielsen's Claritas geo-demographic profiling system divides the New Mass Affluent market into these eight distinct segments:
• The Wealth Market: They closely resemble the traditional view of "old money." These couples are over 65 and have more than $500,000 in income-producing assets.
• Business Class: These couples are in their 50s; have an average household income of almost $123,000 and are likely to carry gold or platinum credit cards.
• Power Couples: These mature couples are empty nesters with average household incomes of almost $119,000.
• Family Fortunes: These are middle-age families with children in the household. They lead the New Mass Affluent category with household incomes above $200,000.
• Retiree Chic: These upscale older couples already are using their income-producing assets to supplement their lifestyle.
• Big Spenders: This is another middle-age group with kids, but they are spending rather than accumulating assets.
• Jumbo Mortgages: These baby boomer families live in affluent suburban subdivisions, but they have the lowest average household income at $87,937.
• Prosperous Parents: These are middle-age families that are focused on raising their children, paying off mortgages and investing in college savings plans and retirement accounts.
Understanding the New Mass Affluent market and tailoring marketing messages accordingly works to a business owner's advantage. Perhaps that way, you can follow John Houseman's lead and "earn" their business.
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