Who are they and what do they want?
You may have heard the phrase “the rich get richer and the poor get poorer.” It is certainly true that the vast majority of wealth in the United States is concentrated in the hands of relatively few people. But did you know that most wealthy people are business owners?
I have always believed in targeting the higher end of the market. It is much easier to compete where there are fewer competitors than where the market is crowded with Walmarts, Sears, and the JC Penny’s of the world.
During an economic slowdown the competition at the bottom of the market becomes fierce. Consumer confidence forces a decline in spending that has everyone competing for financial scraps. At the upper end of the market, a decline in consumer confidence is less evident. The wealthy spend far less covering their overhead as a percentage of their income than the lower rungs of the market. Let’s face it – the wealthy have far more discretionary income.
I believe you can transform your business by targeting wealthy and affluent clients. The demographics of society are changing as we head towards a convergence of baby boomers retiring, more and more affluent Americans inheriting their parents’ fortunes, and dual income couples without children coming of age in occupations where they have plenty of cash to spend.
Who are the Wealthy?
It’s useful to illustrate the difference between affluent clients and wealthy or high net worth clients. If you’ve ever read The Millionaire Next Door, you know that many truly wealthy people do NOT overly flaunt their success. They remain married to their first spouse, live in older, well-established neighborhoods, and rarely buy a brand new car. They didn’t become wealthy by accident.
This type of client makes purchases based on whether it’s a good value.
Affluent clients on the other hand DO flaunt their success. They live in high priced houses in upscale neighborhoods, drive luxury cars, and dine at the best restaurants. They may have little if any real savings. While they may be high income earners, they tend to spend as much or more than they make. This doesn’t mean that the affluent are not a good target market. They are indeed beneficial to target as they are spenders.
This type of client makes purchases based on whether it will make them look good.
How much do the wealthy earn?
For simplicity sake, the wealthy can be defined as follows.
Working masses earning from $75,000 to $150,000 per year
Comfortably wealthy earning from $151,000 to $250,000
Serenely wealthy earning from $250,000 to $400,000
Ultra wealthy earning over $401,000
How many wealthy and affluent clients are there?
In terms of numbers, there are 17 million households in the United States with a net worth of one million dollars or more.
The year 1957 had the largest number of births: 4.3 million babies were born. This group turned 60 in 2014 and has significant income to spend. They are also poised to inherit a great deal of money over the next twenty to thirty years.
What are the main concerns of the wealthy?
Do you consider yourself an expert at what you do? How can improve your expertise?
Are you charging enough for your product or service to be taken seriously?
Are you willing to invest in yourself and your business in order to attract the wealthy?
Are you willing to do the work necessary to increase revenue in your business?
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