The list of social-status acronyms grows longer each year. I’m sure you’ve heard of YUPPIES (young urban professionals) and probably DINKs (double income, no kids), SINKs (single income, no kids) and SITCOMs (single income, two children, and oppressive mortgage). This week, I discovered the acronyms WOOFs (well-off older folks) and HENRYs (high earners, not rich yet).
I’m continually impressed by the amount of money these cohorts spend. Daily, my inbox fills with reports of six-and-seven-figure auction results. Fabulous amounts of money are spent on collectibles, yet antique shops seldom see any of it. Oh, we may score a five-figure sale once in a while, but they are few and far between. The big auction houses and art dealers get the lion’s share of high-ticket sales while Mom-and-Pop stores struggle to pay the rent.
Where are all these “rich people”?
I used to think that they were only in places like The Hamptons, or Hollywood, or Miami; there certainly weren’t any in my town. I was wrong. No matter where you do business, affluent (rich) consumers are right around the corner, and they would love to do business with you.
Kate Mason, in a recent article for Target Marketing Magazine said:
“They’re extraordinarily wealthy, highly educated, and have a penchant for purchasing high-priced items. Who are they? They’re American antique collectors … and possibly a direct marketer’s most desired target demographic group.”
Rich = Dream Demographic
Quoting from Patricia Hoffman in Art & Antiques Magazine, Mason continues:
“They’re a dream demographic…These people are passionate about their hobby, and their purchasing percentages continue to rise…On average, our readers spent $5,990 on antiques in the past year.”
We’re not talking about a paltry few people here; Art & Antiques Magazine has 180,000 active subscribers who enjoy a median annual income of $164,000. There are many, many more affluent collectors; thousands of them are in your state. Where are the WOOFs, HENRYs, HNWs (high-net worth individuals) and UHNW (ultra-high-net-worth individuals) in your neck of the woods? And how do you market to them?
Notable is Hoffman’s phrase “their purchasing percentages continue to rise.” A recent Federal Reserve Bulletin (September 2014, Vol 100, #4) offers statistics that show that virtually everyone in the top 10% of U.S. households is a millionaire – about 11.53 million households – and that the fastest income growth occurs in the top third of this segment. In her whitepaper “Five Key Luxury Market Trends for Market Research”, Pam Danzinger sums it up thus:
“So more correctly, we should say that the ‘Richest are getting richer, while the merely rich (i.e. next 7%) are holding.’”
How do we capture sales from affluent and rich buyers?
As Deep Throat said to Bob Woodward during the Watergate investigation, we “follow the money.” What that means is that we don’t approach very affluent buyers directly (unless they walk into our store). A direct approach of any sort – in person, by snail mail, email, or whatever – will get you shut down in a heartbeat.
Moneyed people rely on assistants to run interference for them, and it’s difficult to break through that barrier. The way to reach rich customers is through their existing relationships; that is, through people they already know, trust, and do business with. A personal referral is required.
In his 1993 book “Networking with the Affluent” Dr. Thomas J. Stanley says: “The affluent respondents whom I have interviewed report that interpersonal endorsements were most influential in their (purchase) decisions.” Dr. Stanley refers to the endorsers as patronage opinion leaders, and that “cultivating the endorsement of these opinion leaders is a very productive way to address the affluent market.”
Connections, Connections, Connections
Affluent consumers are like everyone else in your community: They need goods and services to function. Who is their doctor? Dentist? CPA? Barber? Interior decorator? Lawn service? Who owns the local luxury car dealership? Where do the affluent go to church? What magazines do they read? Which civic organizations or country clubs do they belong to? Where do they put forth charitable effort and support? If you want to make contact with affluent buyers, get to know the people who already know them. If you want to sell to affluent buyers, you can either proactively network or wait for an affluent buyer to walk into your store.
In “Networking with the Affluent,” Dr. Stanley offers eight detailed strategies on how to network with opinion leaders. The most powerful of these you likely already know: send them some business, or do business with them yourself. Joe Girard – listed in the “Guinness Book of World Records” as “The World’s Greatest Salesperson” – gets his hair cut by a different barber every other week. He claims barbers are a steady source of customer referrals. When you enhance their revenue they will be more inclined to refer you (provided they know you, like you, and trust you). Don’t think that there are any millionaires in your neighborhood? That’s understandable; not all affluent consumers flaunt their wealth. If that’s the case in your town, you may find Dr. Stanley’s second book, “The Millionaire Next Door” to be helpful.
Understand the Potential Market and Then Act
Of course, the above discussion assumes two important prerequisites: that you sell quality merchandise and that you’re a reputable business person. As with other aspects of life, a good reputation can take years to develop yet be destroyed in a second.
Selling regularly to affluent customers can be very profitable if you proceed cautiously. If you are successful in your marketing efforts then you, too, might become a WOOF or a HENRY, or some other acronym.
Previously published in Antique Trader Magazine