DATA DRIVEN ENGAGEMENT WITH THE RIGHT PROSPECTS, CLIENTS OR DONORS IS KEY TO MEETING THE CHALLENGE OF COVID-19
by Maya Imberg, Senior Director – Thought Leadership & Analytics
The ongoing coronavirus pandemic is being accompanied by huge human toll – and an increasingly large economic downturn as large swathes of the global economy become unviable. Indeed, the pandemic impacts upon every single individual in some way big or small, and the wealthy are no different.
HEALTH AND ECONOMIC CONCERNS
Apart from health concerns for themselves and their families, the vast majority of wealthy individuals own and/or operate a business, or at least hold a significant stake in a publicly owned business. While a few sectors are seeing demand skyrocket, many wealthy in the current economic downturn are looking to cope with large-scale shocks to their businesses. Governments and central banks of developed nations possess deep enough pockets to keep businesses and citizens afloat temporarily, but those in emerging and developing countries will likely struggle to provide the same kind of safety net.
Like everyone, the personal wealth of very high net worth* (VHNW) and ultra high net worth** (UHNW) individuals has been considerably impacted. How the economic fallout from COVID-19 specifically affects this wealth depends on the allocation of a wealthy individual’s assets. The majority of such individuals have large exposure to both private and public businesses (holdings).
Most will have seen their wealth reduce, with many businesses struggling and stock markets across the world having nosedived. And for those holding liquid assets (such as cash) in their local currency, many have seen this asset weaken substantially against the US dollar – a small silver lining for the wealthy in the US or those with reserves in US dollars. Yet the fate of these individuals’ personal wealth will depend much on how governments and health authorities deal with the path of the pandemic, and also what the economic recovery looks like once we are through the worst.
INFORMED ENGAGEMENT WITH THE WEALTHY IS KEY
So, what can organizations that target or cater to the wealthy do during these challenging times? We take a look at how COVID-19 is impacting the not-for-profit, education, financial services and luxury sectors, and some best practices to successfully engage wealthy prospects, clients and donors.
FOR NGOS, MAJOR DONORS STAY THE COURSE IN A CRISIS
Amid the uncertainty, fundraising among not-for-profits is being impacted significantly, with many existing donors choosing to wait out the economic downturn until making further commitments. “And yet, those major donors who are truly committed to the cause will often continue to commit financially,” says Manuel Bianchi, Managing Director and Global Head of Sales at Wealth-X. “Moreover, new prospects may be more open to helping outside of their usual philanthropic efforts, given the heightened level of need at present.”
What you can do:
- Personal engagement and individual communication with your major donors is always of utmost importance. Remind them of your organization’s mission, highlight your most recent efforts and how they are important. Ensure you know what they care about and reflect this back in terms of what you update them on.
- Many wealthy individuals may be seeking ways to help during this crisis. Research the known associates of your existing major donors to understand who may have an existing interest in your cause and create a tailored strategy to engage them.
Learn more about the global wealthy population here.
EDUCATIONAL INSTITUTIONS SHOULD HIGHLIGHT THEIR COMMUNITY SUPPORT AND LOOK TO THE FUTURE
While the wealthy may want to postpone or wait to make major donations to educational institutions until the pandemic is over, there are likely to be many who are newly more open to supporting institutions that are able to help with the pandemic.
What you can do:
- In reaching out to existing donors and new prospects, take the opportunity to showcase your institution’s importance and academic talent at a time when expertise is in great demand. Be it science, legal or business specialists, showcase what your faculty/staff are providing in the way of expertise in this crisis.
- As a (nearly) global lockdown continues, many will be looking toward brighter times. Highlight the work the institution is doing to keep students learning remotely and the faculty employed, as well as planning for the semester ahead and a triumphant return to campus life.
FINANCIAL SERVICES PROVIDERS CAN STRENGTHEN RELATIONSHIPS IN A DIFFICULT TIME
Stock markets have fallen hard since the pandemic began, impacting upon the wealthy’s investments. For financial institutions, it is likely that the performance of their clients’ portfolios may pose an issue, with some wealthy individuals questioning the advisors they have in place.
What you can do:
- Actively discuss your clients’ worries with them – this may be an emotional time for them as they see their personal investments fall significantly in value and their business(es) struggling. While they may want to sell shares in order to limit losses, advocate faith in financial markets and take them through previous examples of major downturns.
- Despite appearances, this can also be an opportunity to cement your relationship with your clients as you provide support when it is invariably needed.
LUXURY BRANDS SHOULD ENGAGE THEIR MOST LOYAL CUSTOMERS
Sales of small and large ticket items are suffering amid the uncertainty and the closure of physical outlets. In this environment it is those who already know and connect with your services or products that are more likely to make a purchase.
What you can do:
- Invest in identifying who your loyal customers are, and ensure you actively connect with them in a personalized way. Bianchi says, “It’s crucial to view this time as an opportunity to assess your brand and understand what to do in the short term versus what to do once this is over. Work hard to strengthen your relationships with top clients and take the time to understand more about them beyond their luxury purchasing habits.”
- Similar to educational institutions, as days in isolation wear on, wealthy individuals will look to the future for inspiration – they may be planning a vacation, seeking to invest in real estate, or upgrading their major assets like yachts or private planes. If your organization is providing incentives for customers to make purchases during these trying times, understanding a wealthy individual’s known assets, interests and passions can provide a road map for viable sales.
Learn more about best practices for engaging the ultra wealthy here.
The next weeks and months will be challenging for all from a personal and professional perspective, but this state of emergency won’t last forever. When the pandemic nears its end, the economy begins to strengthen and the wealthy have more certainty, those organizations that have made the commitment now to enhanced engagement will see a long-term payoff.
Wealth-X will continue to examine these issues over the next few months. In the coming weeks we will publish our next report, A Decade of Wealth, in commemoration of our tenth anniversary, in which we’ll explore developments in wealth over the last decade as well as look ahead to the time when we’ve emerged from the current downturn.