Selling to high net worth individuals – what do they buy?

February 16, 2012 By Leave a Comment
What's in the box?

What do they buy?

If you intend to sell to the affluent, the well-heeled or to the rich,  then one of the first things you’ll need to do is to work out just what your target market buys.

Finding the answer isn’t easy.

High net worth individuals are a very diverse group with lots of different tastes, needs interests, passions and concerns.

So, if this is your chosen market segment, where should you begin?

Forget the luxury lifestyle

I remember sitting on the edge of a discussion once, where several consultants were talking about how to sell to high net worth individuals.  They had decided to pool their resources to create an offer for this group and the conversation was all about the consultants’ perceptions of high net worth individuals’ spending habits.

The man who sold luxury cars told the group about the type of cars wealthy people drive.  The interior designer talked at length about marble work surfaces in kitchens.  The lady who owns a very exclusive shoe shop talked about expensive shoes and who buys them.

All the consultants taking part in the discussion were agreed on two things.

  1. People who have resources, assets and a sizable income all spend money on expensive, upmarket goods and services.
  2. Every one who can afford to spend money on luxury will spend money on luxury

They were wrong.

A luxury lifestyle doesn’t necessarily mean that someone is independently wealthy.  Some people who live well do so on credit. Some people who live a luxury lifestyle want to create a particular impression but struggle to finance their aspirations. Likewise, a many people with significant resources behind them choose to live modestly.

Therefore, if you’re looking to target high net worth individuals, forget lifestyle as an indicator of high net worth.  It doesn’t necessarily point you to the people you want to sell to.

What do high net worth individuals buy?

Let’s go back to the group of consultants wanting to sell to high net worth individuals for a moment to find the answer.

As well as making mistakes about how high net worth individuals spend, these consultants had also assumed that high net worth individuals form an homogeneous group.  They had assumed that all members of this group will think, act and spend in the same way.

That’s not the case.

Every one buys value.  It’s just that different people define value in different ways.

For some people value for money is really important.  Just don’t assume that value for money is only important to people who have to be careful with their spending.

For some people value is about utility.  How useful will this purchase be?  Will this purchase meet my needs, whether it’s a car, a house, a private jet or a washing machine?

Value can also be about durability.  Will this purchase last?

Value can be about aesthetics, too.  Is this purchase beautiful?

Value can be about exclusivity. If I buy this, will see another one like it?

Don’t assume that any of these views of value are necessarily linked to wealth.  They’re not.  The craftsman can create an exclusive item for himself as well as for his customers.  The wealthy person can choose not to wear a designer label as well as choosing to wear one.

The differences between those who are affluent and those who are not are more subtle.

Having access to resource enables people to buy, should they wish to do so.  However, it does just that.  Resource enables.  It doesn’t dictate.

That’s what the group of consultants should have remembered.  Having more money gives people more choices about what they can spend their money on.  It doesn’t necessarily dictate how people will spend their money.

Value matters

People spend money on what they will value.  What looks to you or to me like a waste of money might be worthwhile expenditure to someone else.  What is an essential feature of a car, a telephone or a piece of equipment to one person is frippery to another.

Bear these points in mind, if you’re planning to sell to high net worth individuals.

Work out what the sub-set of the market you’re interested in values.  Then offer value. You’ll make more sales if you do.

See also:

Selling to high net worth individuals – who are they?

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Filed Under: Growing Your Business, Sales Skills, Selling to high net worth individuals Tagged With: ,

Selling To High Net Worth Individuals – Who are they?

February 1, 2012 By 3 Comments
All gold?

Who's got lots?

High net worth is a term that is used a lot.

You’ll find it mentioned in the reports and statements of many financial firms.

HM Revenue and Customs has a high net worth unit.

Most of the banks have units who look after the interests of this group.

Quite a few businesses say that they would like to sell to high net worth individuals.  Many of them struggle to do so.  This series of articles is all about selling to that group.

If your business wants to sell to high net worth individuals the sensible place to start is to think about who these people are.

What is a high net worth individual?

There are different views, but you won’t go too far wrong if you think of a high net worth individual as someone who owns at least the equivalent of one million US dollars in financial assets.

Ultra high net worth individuals, on the other hand, need at least thirty million US dollars or equivalent to qualify.  In this instance, a family can be counted as well as individuals.

Some banks and financial institutions sub-divide further into such categories as “very high net worth individuals” and so on.

Who has this sort of resource?

If you’re looking to sell your products and services into the top end of this market, you’re looking at a very exclusive group of people.  Check out the high end of the market and you’ll come across the people with yachts, private jets, expensive cars for each day of the week and so on.

Thinking about high net worth individuals more generally, you can easily start to gather some useful information that will help you to understand a little more about them.

Almost half of them have directorships.

More than 60% of them fly regularly.

Typically they will be worth just over £1 million.

By the way, according to some statistics, 1.1 % of the UK population are millionaires.  Other sources say there are over 280,000 of them living in the UK.

Okay, 80% of high net worth individuals are male, which helps you with your customer profiling, but that doesn’t mean you would recognise a high net worth individual if you met him – or her -  in the street.

They’re not that different from a lot of other people.

What sort of people are high net worth individuals?

Quite a lot of people could fall into this category.

  • Think about the person who has run a business for 30 years.  At retirement he or she could well realise this amount of money when selling the business.
  • Some people inherit wealth.  When the parental home is sold, it can realise significant amounts of money these days.  Inheriting such a home and liquidating the asset can turn someone into a high net worth individual overnight.
  • Some people, especially those in finance, earn big salaries and become wealthy at quite a young age.
  • Yes, some people win the lottery or the football pools and become rich overnight. . . . And there are celebrities etc.

What’s important to remember is that high net worth individuals are a diverse group. 

They don’t all have the same experiences.

They don’t all have the same expectations.

They don’t all have the same interests, needs and wants.

They don’t all live their lives in the same way.

They don’t all want to buy the same sorts of products and services.

Selling to high net worth individuals

It’s not enough in your business to state that you want to sell to high net worth individuals.  When you make this statement you haven’t gone far enough with your analysis.  You’ve identified s a market segment, but it’s not a niche.  (It’s still too big.)

You need to slice your market segment further.

The first step is to do some customer profiling.

  1. Are you potential customers likely to be male or female?
  2. Are they likely to be young or old?
  3. Did they become affluent quickly or did they become affluent slowly?
  4. Are they interested in ……………. type of investment?
  5. Are they interested in …………………. type of activity?

You can then start to think about finding real people who fit your criteria. 

Have you got to that stage? 

If you have, that means your search for the right high net worth individuals has begun.

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Filed Under: Growing Your Business, Selling to high net worth individuals Tagged With: ,

How to take control of your business once and for all

January 30, 2012 By Leave a Comment
Who's plotting your course?

Is anyone plotting your course?

It’s easy to be busy.  It’s easy to work from early until late.  It’s satisfying to keep ticking off the items on the “to do” list.

Stop for a moment and think about your approach to how you run your business.

  • Just how satisfying is it to work like this?
  • When you work like this, do you feel as if you’re in control?
  • Do you believe you’re making progress towards your goals?

If you’re not convinced that you’re achieving what you want to achieve with your business, despite all that hard work, try the following. [Read more...]

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Filed Under: Business Skills, Productivity, Sales Skills, Starting Your Business, Starting Your Coaching Business, Starting Your Consulting Business Tagged With: , ,

How to use your blog as a sales tool for your consultancy or coaching practice

January 27, 2012 By 1 Comment
Connections

Connect with your market via your blog

Some consultants, coaches and other expert professionals roll their eyes when I ask them if they blog.

When they answer they are likely to say that:

  • Blogging is a bit down-market for them.
  • Blogging is for youngsters.
  • Blogging is for the “me” generation.

They also often say:

  • Blogging is not for professional people.

They then go on to add that they don’t have time for blogging and social media and the like.

Serious businesses blog well and blog often

It isn’t difficult to bring forward evidence to contradict these assertions. There are lots of business blogs out in the world and many of them are very popular.

I’m a serious businessperson and I blog.  Well, actually, I’m a serious businessperson and I write articles and authority content.

The articles are blogs, of course, but I call them something different.

It’s relatively easy to convince professional people that they need authority content on their websites. They know that authority content positions them as experts in their niche.  They write authority content but don’t realise they are blogging.

Acquiring expert status is important and it helps to make sales.  Therefore, an authority blog is a great sales tool.

Blogging solves customers’ problems

I solve problems for customers via this site.

Lots of my business’s customers struggle to establish the value they deliver to their marketplace.  In fact, many of my customers are good at what they do, but don’t know how they add value in their marketplace. Thus, they don’t know how to promote themselves and their businesses effectively.

Almost eighteen months ago I wrote a series of articles (posts) about establishing the unique selling proposition in businesses selling complex products or services.  Whenever I start work with a new customer I always encourage him or her to read the complete series.

This approach adds value to the person’s learning process. 

I’m also solving a customer’s problem via this website.

Blogging helps you to get quoted, get shared, get tagged and retweeted

It’s not what you say about yourself that matters.  It’s what the movers and shakers in your marketplace say about you that’s important.

I make a point of writing interesting Facebook updates.  I tweet interesting material.  I write articles that get shared.  (Sometimes this is via social media.  Sometimes individuals e-mail links or include links in their newsletters.)

My blog posts are quoted, linked to, tweeted, liked and so on.

As a result, when I go to a business networking event I meet people who say:

“I follow you on Twitter.”

“I have liked your Facebook Page.”

“I liked your article on ……..”

It’s a great endorsement and, of course, other people in the room hear the endorsement.  That means I’m already starting to build a relationship with people even before we have shaken hands.

They’re starting to move along the Know-Like-Trust continuum that leads to business.  They’re doing that because of my blog.

Blogging helps you to make sales

My website (or blog) is a business asset.  It’s worth the time I spend on it.

It helps me to make sales, and that means that my business is more likely to profit, survive and grow.

What do you think?

Do you consider your blog to be a business asset?  Let me know in the comments section or on Facebook at:

Social Media Success Community

If you like this post please tweet about it using the hashtags:

#startup

#smallbiz

#entrepreneur.

You might also like to read:

Your great value proposition

One simple thing consultants can do to grow their business faster

Are you selling a complex product or service?

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Filed Under: Sales Skills, Solo Success In Business, Starting Your Business, Starting Your Coaching Business, Starting Your Consulting Business Tagged With: , , , ,

One simple thing consultants can do to grow their businesses faster

January 24, 2012 By 1 Comment
Sign up

Get them to sign up!

Most consultants are looking to grow their businesses.

Most consultants who have been in business for a while say it’s harder now to get business than it once was.

When consultants start to work with me they often say their problems have nothing to do with them and the way they manage their practices.  They say:

“It’s the economy.”

“It’s the cutbacks.”

“It’s the level of competition.”

Well, I’m not sure I agree.

When I start working with a consultant, one of the questions I ask in our first meeting is:

“How many sales meetings did you have last month?”

I often get blank looks.  Then I get lots of information about the one-to-one meetings and the discussions following on from networking meetings and the lunches and breakfast meetings the consultant has attended.

I take notes. It’s fascinating to listen and to work out how much time and money consultants spend on these activities.

In the end it turns out that quite a few consultants don’t have any sales meetings at all.

They have meetings where they talk about what they do.  They have meetings where they present proposals.  They have meetings where they discuss options and possibilities.  They have exploratory meetings.

They don’t actually have meetings where they say:

“This is what I am offering and this is the price.  Now, when can I start work on your project?”

That’s the main reason why they’re not making sales.  They just never get around to asking for the business.

How to make sales

If you’re going to do business you need to make sales.

We’re now into week four in the Business Start-Up month, which is why I’m writing about sales.  In week four in The Solo Success Start-Up Guide I concentrate on sales and doing one very important thing to get sales.

What is it?

It’s asking for the business.

If you don’t make sales, your business is doomed. Yet, when you delve into the way lots of consultants work, they never actually ask for the business.  That’s their biggest problem.

Do you ask for business?

Think carefully.

  • Have you asked for a piece of business in the last month?
  • Have you asked a customer for a start date for a project?
  • Have you asked in plain and simple terms that the customer makes a commitment to work with you?
  • Have you asked when you can submit your first invoice?

If you haven’t, then you’re missing out on business.

Often customers are just waiting for you to ask them for their business.  They want you to ask. If you don’t, they won’t offer to put the first meeting in the diary.  They won’t ask you about the best time to run that workshop.  They’ll let you walk away from the meeting empty handed.

You can improve your business if you make a point of asking for the business every time you make a proposal of any sort.

What have you got to lose?

They can only say no.

Over to you . . .

Be honest.  Do you ask your customers for their business?

If you don’t, what gets in the way?  Let me know in the comments.

If you like this post please “like” it on Facebook and tweet about it using the hashtags:

#startup

#smallbiz

#entrepreneur.

You might also like to read:

The real secret of consultancy success

How well are you closing the sale?

The most common mistake new businesses make and how to avoid it.

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Filed Under: Sales Skills, Solo Success In Business, Starting Your Coaching Business, Starting Your Consulting Business Tagged With: , , ,
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