How CEOs Can Win in a Two-Speed Economy: Thriving When Half of Consumer Spending Comes from the Top 10%
Most CEOs have a playbook for maintaining growth when their customers are either spending more or spending less.
But what about when both are happening at the same time?
According to a recent Moody’s Analytics estimate, the top 10% of U.S. households now account for nearly half of all consumer spending. In the second quarter of 2025, consumers in that top 10% were responsible for 49.2% of total spending, the highest percentage since 1989.
Affluent consumers, buoyed by the markets and high property values, are spending freely. Middle-income and lower-income households, still struggling with inflation and high interest, are tightening their belts.
It’s likely your company has never seen a consumer divide this stark. And with still more economic uncertainty on the horizon, it’s also likely that this trend is going to accelerate into the new year.
So, how will you design, price, and deliver your products and services to keep Making BIG Happen in the two-speed economy?
What Does a Two-Speed Economy Look Like in Action?
We’re past flashing yellow lights. The two-speed economy is happening right now.
A recent article in The New York Times described long lines at Chicago food pantries and bustling luxury hotels, jewelers, and restaurants a few blocks away on the Magnificent Mile.
While value-focused airlines struggle, Delta and United have accounted for most of the industry’s profits since 2022 by selling premium seats and loyalty perks to more corporate and luxury travelers. Rather than treating air travel as a commodity they need to sell more of, top airlines have transformed their service into a luxury experience that customers are willing to pay more for.
Meanwhile, Spirit Airlines and its volume-heavy budget travel model is facing its second bankruptcy in a year.
On the fast food front, McDonald’s tried to get ahead of the two-speed economy by bringing back value meals and other budget menu options while maintaining its mass-market appeal. The mix didn’t work: on a recent earnings call, CEO Christopher J. Kempczinski noted that visits by low-income consumers are down by double digits compared to the previous year. Kempczinski explicitly raised red flags about a “bifurcated consumer base.”
Why Should CEOs Care About the Two-Speed Economy?
The BIGGEST mistake a CEO can make right now is to dismiss these numbers as a byproduct of longstanding inequality, or a blip that the markets and the Fed will sort out.
In a two-speed economy, your growth, your margins, and your company’s resilience are now almost entirely dependent on your customer mix. The broad-based consumer spending that powered the economy for decades is fading. If you’ve built a company to serve everyone, then your foundation is rapidly shrinking as you’re getting squeezed at both ends.
At the top, premium brands are winning wallet share from high-earning, resilient consumers by offering differentiated, high-margin experiences.
At the bottom, discount players are fighting for a dwindling supply of discretionary dollars from folks who are worried about next month’s rent.
And companies that cater to the middle are losing their traditional advantages: tweaking prices and discounting in bulk, brand loyalty, broadening SKUs. Trying to sell more to your existing customers while attracting prospects with the next BIG thing just isn’t going to work when affluent consumers are flying past you in the left lane and everyone else is slowing to a crawl on the right.
How Can CEOs Adapt Their Go-to-Market Strategy to a Split Market?
In a two-speed economy, a company that keeps trying to be all things to all customers is going to find itself sputtering alone in the middle lane. CEOs have to revise their go-to-market strategy with a precise focus on four areas:
1. Who Are Your Most Profitable Customers?
- Start by identifying who really drives your profit by setting aside raw revenue figures.
- “Mass premium” is not a market segment. If your best customers are in the top decile, build a strategy that repositions your brand, your products and services, and your pricing in the luxury market. Don’t apologize for higher prices, demonstrate the higher value you’re providing.
- Never race to the bottom. If your target is cost-sensitive buyers, be your customers’ lifeline during these stressful times. That sense of security is a feeling of luxury they can afford.
2. How Should You Redesign Your Product Mix?
- Reimagine what you’re selling, and to whom.
- Replace one-size-fits-all with Good, Better, and Best. For many companies, positioning yourself as the best and selling the best is the most lucrative strategy.
- Reorient every stage of your sales funnel to treat the premium product as the primary profit engine. This is about more than “upselling,” it’s a total reimagining of what you’re selling, to whom, and what price point.
3. How Can You Price for Value and Experience?
- Affluent consumers will pay for access, personalization, and status. Don’t charge them for more of the same.
- Create “first class” equivalents around new products, exclusive access, and dedicated customer support.
- Build a luxury ecosystem. Delta and United shifted frequent-flier programs to reward customers based on spending rather than distance flown. They also invested in exclusive airport lounges and global partnerships that extended their customer experience beyond the airport.
- Leverage AI to learn everything you can about what your most valuable customers want and anticipate what they may want next. The longer you have their attention, the more they’ll buy from you.
4. How Should You Communicate with Two Distinct Customer Groups?
Your marketing must speak differently to the top 10% and to value-conscious buyers. If you try to market to them at the same time, your message will ring hollow with one group and strike the other as tone-deaf.
- For the top 10%: Emphasize legacy, meaning, impact, status, and values. Communicate that you can help them keep living their best lives and being their best selves.
- For everyone else: Emphasize stability, practicality, and value. Communicate that you understand, you’re on their side, and you’re ready to help.
- Remember: It takes a lifetime to build trust and an instant to lose it. Peloton lost almost a billion dollars of market value in one day due to an ad that rubbed holiday shoppers the wrong way.
Choose Your Lane and Lead Through the Divide
Your company has to change. And the CEO has to lead that change decisively.
Your “average customer” no longer exists. Staying in the mushy middle is a path to margin erosion, brand confusion, and failure.
So, are you going to move upmarket and reengineer your business around affluent consumers who will spend through downturns?
Or are you going to economize, automate, and deliver essential value to customers who need stability above all else?
And when the playing field shifts again, will you be ready to make another pivot? After all, wealthy consumers can only prop up the economy for so long.
CEOs have to accept that external volatility will be the new normal for the foreseeable future. The challenge is to stay indispensable — not just to today’s top spenders, but to tomorrow’s changing consumer base — so that you can maintain stability inside your company’s walls. Having that solid foundation will allow you to keep pace, change lanes, maintain growth, and keep Making BIG Happen.
If you don’t have a coach and want one to help you prepare your business during this quickly evolving landscape, fill out the form below to take us up on a complimentary 1:1 coaching call.
Connect With a Coach:
About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, the firm has coached more than 1,500+ CEOs and entrepreneurs across 100+ industries and 60 countries. Its coaches—former CEOs, presidents, and executives—have led businesses ranging from startups to over $10 billion, driving double-digit sales and profit growth, many culminating in eight, nine, or ten-figure exits.
Companies that have worked with CEO Coaching International for two years or more have achieved an average revenue CAGR of 25.9%, nearly 3X the U.S. average, and an average EBITDA CAGR of 39.2%, more than 4X the national benchmark.
Discover how coaching can transform your leadership journey at ceocoachinginternational.com.
Learn more about executive coaching | Meet our world-class coaches
