Targeting the affluent
I noticed lately that a lot of businesses have taken “Button down the Hatches” approach while hoping at the same time this recession blows over as quickly as possible. Many make the mistake of cutting back on their marketing, when what they should be doing is changing their target market.
Think about it for just a moment: What is the one consumer segment that is never affected during a slow economy? What segment of the population is still buying Hummers and high performance sports cars while others are waiting in line for fuel efficient hybrids? If you guessed the upper middle class, you’d be wrong. I’m not just talking about people who make over $100,000 a year. I’m talking about people who make $500,000 or more a year. This is the Ultra-Affluent.
Interestingly enough, I recently read an article recently about how yacht sales haven’t slowed down a bit during the current recession. There’s a company in my town that sells million dollar luxury motor homes and believe me their business is not hurting at all right now.
The ultra-affluent tend to be CEO’s, business owners, surgeons of various kinds, corporate lawyers and so on. Economic slow downs do not cause them to tighten the purse strings, nor does it affect their desire to have specialty services done for them. In fact, most of these people have a greater desire to have these services done because they consider their own time extremely valuable.
Thomas Stanley, in his book, The Millionaire Mind, points out that millionaires consider time to be one of their most valuable assets. They don’t squander it on tasks that they would gladly pay a professional to do.
As a detailer, you should be going up on your prices and targeting this market. Don’t cut your prices with your current customers to keep them coming back. This what most service professionals do to cater to their clients, and it’s one of the worst things they can do because what they’ve done is create more work for the same profit. Your strategy in reality should be the total opposite - Go up on your price and target to the ultra-affluent.
If you’re not aiming for this market, then you are allowing your competition to gain an enormous advantage on you. You see, the ultra-affluent crowd will pay twice, even three times what you would normally be able to charge for someone in the middle class segment. In other words, you can make more profit with half the clients.
It’s a proven fact that companies who sell on price eventually go out of business. For a case study on this I would strongly recommend Lawrence Steinmetz book How to Sell at Margins Higher than Your Competitors.