Marketing To The Affluent

Hey there everybody. Welcome to the Magnetic Marketing Podcast. Today's episode is going to end with something that I actually want to bring up front, and that is that the value of your business is related to the value of your customer. Often we wonder, is there a way to be able to reach a higher quality customer? What does that even look like? How do you even begin that kind of an outreach? Well, today we get to listen to Dan Kennedy and Bill Glazer as they talk about exactly that, how to market to the affluent. And particularly for today, in times of economic concern, this topic should be forefront at your mind. Let's listen to Dan Kennedy and Bill Glazer on marketing to the affluent.

I don't think there's anybody that has had a bigger impact in the field of direct response than Dan Kennedy. The legend of Dan Kennedy should be ignored at your own peril. They're not really lessons, they're kind of laws Laws that you live by. Dan opened my eyes to what small business marketing looks like. Dan teaches strategic direct response that is timeless. His ripple effect touches people who don't even know his name.

The world as we know it was changed because Dan Kennedy became obsessed with marketing.

Welcome to the Magnetic Marketing Podcast with your host, Dan Kennedy.

Hello, this is Bill Glazer, president of Glazer Kennedy Insider Circle. I want to welcome you to a very special teleseminar with Dan Kennedy and a discussion related to his newest book, "The No BS Guide to Marketing to the Affluent." Dan, if it is okay with you, let's get going.

I'm ready. A lot of people probably are thinking, "Why a book entirely about marketing specifically to the affluent?" Well, for the same reason that now, I guess 2 years ago, we started a second special newsletter about that topic. It is possibly the greatest opportunity for business owners and sales professionals and those in private practice certainly that I've seen in my lifetime. There's a convergence of demographic trends, and demographics are destiny. There is a convergence of demographic trends right now that is really controlling the movement of money in a very new and exciting way. First of all, all of the liberal politicians and media bemoaning of the disappearance of the traditional American middle class middle class is actually accurate. And in these rare instances where they are accurate, it's nice to give them points for being so. It's accurate. What usually goes unsaid, though, is the way it is dividing. It's not truly disappearing, of course. The middle class is not all suddenly dying in some toxic cloud. They're going somewhere. And one-third of them is slipping down.. But two-thirds of them are moving up to a different class, a new class that we might call middle-class millionaires. And that presents us with a great new opportunity. Another way, another sort of classification for them is called the mass affluent. And then there are also affluent and Ultra-affluent people, for example, you might read about on the Forbes 400. Then you have the boomers who are peaking, and at the peak of discretionary income and wealth, also beginning to receive— very leading edge of it— the largest wealth transfer in the history of the United States has us boomers parents depart the planet and the new psychographic trend of both boomers and seniors of a willingness to spend on themselves in a much greater way than any prior generation on everything from luxury goods, travel, anti-aging, investment, etc. So this book is really all is all about these important and timely emerging opportunities. It's really 3 books in 1. Book 1 is about who these people are, who has all the money, who is all the money moving to literally as we speak. Book 2 is what are they buying. Book 3 then gets us to the how-to.— how to find them, how to communicate with them, how to connect with them, how to recraft your business for them, etc. I think this is the most timely marketing book that I have ever written because to prosper in generally less prosperous or unprosperous times. The very best thing you can do is move to where the money is, where the least and last affected consumers are, where individuals or B2B buyers tend to make their buying decisions not about price. And so it's very important for people to have a new understanding of how much money there is out there moving. And of the who, what, where, and why. That's what the book is all about.

On a personal note, as you know, Dan, but I'm not sure everybody on this call knows, my former life was being a menswear retailer. Although we were very successful stores and although we marketed, we had a lot of affluent customers that we sold to. Since you began writing the Marketing to the Affluent newsletter 2 years ago, which was already after I was out of the retail business, the one regret I have is that I didn't pay more attention exclusively to this category of business because you're right. I mean, it's clearly the category of where the money's at and where people are much more willing to actually spend. So let's jump into my question number 2 that I've assembled for you here, Dan, which is Throughout the book you talk about transcending boundaries by marketing to the affluent.

What do you mean by that? First of all, usually in the context of personal development, personal growth, personal behaviors, I've written about and talked about something from Maxwell Maltz and psychocybernetics that all of us tend to live and function inside two boxes, one drawn with a dotted line representing our self-imposed limits and one with a solid line representing real limits. And the self-imposed box is usually a lot closer to us, a lot smaller, a lot tighter than the real limits box. Needs to be. The same principle applies to business. Most people are fencing themselves into a much smaller place than reality requires. So marketing to the affluent is a way to break through those limits, to change the box in which you operate. For example,. This book deals with price boundaries and how we can break free of price boundaries. Most people have more in their minds than in reality, but perhaps in the reality of the customers they currently deal with, a set of boundaries about what they can charge, what people will pay, how much profit margin they can put into each product or service and so forth. And so forth. The strategies in this book can break you free of price boundaries. Second, there are geographic boundaries. The affluent consumer is less bound by geography than is the non-affluent consumer. Therefore, the merchant to the affluent, the provider of services, the provider of expertise to the affluent is less bound by geography. Than is the provider to less affluent. And it's sort of interesting that we now have this explosive breakthrough world of technology that has removed geographic boundaries and makes it no more difficult to conduct business with somebody in China than with somebody a block away. And yet a lot of people still actually operate their businesses, design their marketing, and think as if all of those technological breakthroughs really didn't exist. They are still doing business as if we were in the 1960s. So this book is about breaking geographic boundaries. Another type of boundary is what I call customer emotional boundaries. An example of that is, here is a fact, the more affluent the less they are bound by anxiety or guilt as well as practical considerations when spending. Now, most affluent people value investing and spending wisely, and they don't want to feel or be looked upon as if they were wasteful or foolish. That's why there's a lot of Cadillac Escalade hybrids being sold, which is a is an oxymoron with 4 doors, right? But these buyers, the more affluent they are, the less restricted or controlled they are by negative emotions about spending. So we get a lot of the internal resistance to buying out of the way purely by changing who we are selling to and going to the more affluent customer.

Well, how hard is it to then reinvent the business or maybe your practice or your sales career to specifically attract and satisfy more upscale clientele?

It's harder for most people to do because of their own self-imposed box than it is by any real limitations. One really cool thing is that the closer you get to the top, the less competition there is because so many business owners, salespeople, marketers have essentially self-esteem and self-confidence issues and so they tend not to even try to attract and sell to the top quadrant of their market. And so there's a lot more competition in the lower economic stratus than there is in the top economic stratus. The affluent customer or client is admittedly more demanding, but they are infinitely more valuable. So that's a pretty good equation. If we assign math to it and said that they are 30% more difficult to attract, appeal to, sell to, and satisfy, but they are 300% more valuable, that 30% is a pretty easy price tag to accept. In Chapter 30 of the book, I really have the practical answer to this reinvention specific to the marketing side of the equation. The chapter is titled "Affluent Customer Entrapment." A lot of what's in it will look pretty familiar to most Glaser Kennedy members. It covers every base, but it's really built on a pretty simple 3-part system. There's a diagram at of the system. There's even a day-by-day example of the use of the system. And so this really deals with the marketing side of the equation. Chapter 31 goes into real depth about finding the appropriate mass affluent, affluent, even ultra-affluent customers or clients for your business. Um, contrary to what a lot of people seem to think, uh, they're not all hiding out with Dick Cheney in secret undisclosed locations. Uh, they're really pretty findable. They're in reachable places, activities, groups. Uh, privacy in America is pretty much dead, so, uh, the world of mailing lists really can get us directly to them. There are two things about that very quickly. One is that more wealth has been created in America through lists than through anything. So if you want to talk about not just how to make money but how to get rich, this is really a pretty important conversation that occurs in the book. Again, there is a lot less competition doing this sort of sophisticated sophisticated target marketing so there's competitive advantage. Now here's the most important stat, sort of overriding umbrella stat to all this that should motivate people to want to get it. Right now, 22% of US households have 55% of all earned income. That puts more than half of the spending power in 1 out of 5 households. And so you have a choice of trying to do business with the 1 in the 5 or doing business with the 4 in the 5. And it's kind of a Homer Simpson duh to choose the 1 in the 5. And this really is still about fundamental Kennedy marketing triangle, marketing message media. And so this is about deciding on and really coming to understand the realities, the psychology of this particular market, the population residing in residing in the 1 in 5, then crafting a message very well-matched to that market, and then choosing and using the best media to reach them. By the way, the webinars you refer to in the free gift include some in-depth discussion about the triangle. I have one— a story in the book. I have others, but this is a favorite story of mine. Some years ago, I got to know a very wealthy psychic. And by the way, I've always been amused by the fact that most psychics seem to have their offices in very ratty, poor-looking places. With big signs out front, you know, doing readings for $5, $10, or $15. And it would seem to me you would immediately question their psychic ability. But this guy, one of the biggest and most expensive houses on Camelback Mountain, and so he had a real marketing process that involved doing readings. A stage act in small venues for affluent audiences, causing out of that X number of people to come to him for private readings, and out of that Y number of those people to retain him and be private clients and rely on him for some form of business, financial, or investments, psychic predictions, and getting paid not just by fees but based upon success. And so the story he told me was about being retained by the very wealthy widow of an oil man who owned oil fields in Texas, and his job was to go out into the oil fields oil fields and use his psychic powers to pick the next 10 places that they would drill for oil. And he got a percentage of all of the oil that came from the successful wells. And he said, really, you don't need to be too good of a psychic to walk around an oil field, pick 10 places, and be right You can get really, really rich doing it. The same thing really is true for marketing and sales professionals and business owners. If you put yourself in the oil field, you don't really need a lot of genius to do well. But most business owners are really trying to do well with what they know. Without ever putting themselves in the oil field. So this whole reinvention of the business is marketing. It's about putting yourself in the oil field. To quickly plug the book that immediately preceded this, RBS Ruthless Management of People and Profits, it really links because it is about how to make sure that the reinvention of your business works on the fulfillment side, the satisfaction of the client side. Because these affluent customers, as I said, are more demanding, but they are infinitely more valuable.

So you talk about the fact that they're more demanding. So exactly how different are the rich or affluent customers from other customers?

Well, generalizations are, of course, always dangerous. So in the book I separate them into a lot of different subgroups, a lot of different target groups based on age, gender, status, philosophy, buying behavior, and I cross that against 11 different product and service categories. So as an aside, the problem we always wrestle with of the, but my business is different. This book covers every business, so your business can't be different enough not to be able to apply this in one way or another. But to give you a specific example, the middle-class millionaire or if people have read Thomas Stanley's books about the millionaire next door, they are different from from the status seeker affluent buyer who is different from the young mass affluent buyer. And so, generalizations aside, I put them into subgroups. But to generalize a little, there are different what I call E-factors, emotional factors that govern purchasing. That are unique to the affluent. There are 7 specifically that I talk about in Chapter 10. One, as an example, is status. And then what's important to understand is that status means different things to different types of affluent customers, but it is extremely important to all of them. For some, visible status is Status is very important. The CEO of Lamborghini says no man drives a Lamborghini to get to work. And we could now have a long conversation about why different men do drive Lamborghinis, but they're certainly not driving them as a substitute for the subway. And so there's visible status, there's private status. To some people it is about access. To some it is about ultimate convenience. To some it is about luxury. To some it is about exclusivity. To some it is about their aspirations. But the biggest mistake that people make is in selling products and services and so while ordinary buy products and services and therefore buy based on sort of classic basic sales marketing and copywriting formulas like features and benefits. Affluent customers and clients buy more based upon these other E-factors and far less about practical considerations. And so they are different in their psychology. In why they buy and in their buying behavior. They are also, as I said, very different in their value to the business owner. And again, the major 7 E-Factors are one of the things that I cover in some depth in Chapter 10.

So I know that you've done a lot of research to the marketing to the affluent and the reason why I know that is because every month in your specific newsletter it's just laden with a tremendous amount of research that you've done. So historically speaking, when people think in terms of marketing they they naturally divide it and probably inappropriately so, but they naturally divide it into two categories. One is B2C, marketing to consumers. The other one is B2B, marketing business to business. My question to you is, does your marketing to the affluent research strategies and advice extend to B2B as well as to consumers?

In a word, yes. First of all, there's great crossover because a significant percentage of all three main populations—mass affluent, affluent, and ultra-affluent—and actually the percentage goes up in each of those three groups, are entrepreneurs. They became affluent through their own businesses and so selling beads B, if you will, to successful and prosperous business owners in their business setting utilizes all the same psychology and all the same strategies as selling to them as consumers for personal use in a personal setting. So there's great crossover. We do have a great guest chapter in the book from an Inc. 500 company owner, Glaser Kennedy member, Chris Hearn, about selling commercial financing predominantly for building ownership to build wealth and have more pride and status and so forth. A very different approach to selling that service to business owners than just about anybody else in his industry pursues. It's extremely instructive in many ways including, as you just said, really illustrating the inappropriateness of dividing selling to consumers and selling to business owners as if we were on two different planets selling to two different creatures, which really is not the case. And so there's enormous crossover. And the B2B business owner or marketer or sales professional who may be on the call should really understand they they actually get double benefit from all of these strategies because they in many cases have an opportunity to reach the entrepreneur from two different directions.

Well, you know, at our— this past April we conducted at Glaser Kennedy our annual super conference which was attended by over 1,300 of our members. We gave everybody the opportunity to stay for an additional bonus day where you delivered a full-day seminar which was called Price, Profit and Power. First of all, I would like to ask you, when you hear that without sort of hearing about what that means, I would like you to spend a moment and tell everybody why you chose the name. Price, profit, and power. Then they will see, or maybe you can connect the dots for them, why there is obvious linkage to this, to marketing to the affluent. Then I would like you to spend— so this is like a multi-step question— but then I would like you to spend just a moment or two and talk about, which is probably the most important connection here, is the connection to power specifically.

Well, the title was chosen hopefully to cause a lot of people to want to stay for the seminar. And it really in shorthand reveals one of the major misunderstood, not fully exploited opportunities in most business businesses, which has to do with price and price strategies and price presentation strategies and so forth, really are the key to profit. And profit then is the key to power in a business. The price opportunities, of course, are greatest with buyers for whom price matters least. So there's the link. To the affluent marketplace. That's not to say that price opportunities don't exist in every business, even in Walmart, because they do. And virtually everything discussed at that seminar could be applied whether you were marketing to the affluent or not, or deliberately doing so or only accidentally doing so, whether it was your primary focus or just part of your clientele, but the opportunities are greatest when you combine my price strategies with buyers for whom price matters least. And from a timely standpoint, again, it couldn't be more important than it is now when some categories of the market, geographic, product, service, and some categories of consumers are clamping down on their wallets. So it couldn't be more important. The second thing about it is that it can get you to your economic goals faster because you take bigger steps. If each transaction is larger, if the profit in each average transaction is greater, if the value of each customer obtained is greater, you get to each million dollars quicker in fewer steps. You can also invest more in getting and keeping ideal customers when your price and profit is optimized and that gives you great competitive advantage. The real power equation here is the power to withstand challenging economic times or economic troubles affecting the masses and to prosper greatly in good times. And the last thing that I would say about all of this is that it really gets us to the issue of income versus wealth. You know, and I often say that most business people err greatly in getting up every morning and thinking entirely about income all day long and not thinking about equity, the development of value in their business. And so most people fail to consider this in their acquisition of customers. Their entire attitude about it and their approach to business is one customer is as good as another. I'm happy to get any customers I can get. You will often have them verbalize things like, I'll take whatever I can get. But the value of the individual customers adds up to the value of the business and so If you want a more valuable business, then you will pay a lot of attention to the value of each customer that you are making a point of acquiring. And when you put it all together, the power answer is that this approach that is all sort of based on successfully marketing to the affluent gives you a stronger more valuable, more secure, more sustainable business.

Thank you for listening to the Magnetic Marketing Podcast with Dan Kennedy. If you love hearing in on these lost Dan Kennedy talks and speeches and calls, then please let someone else know about this podcast. That's how you can help it to grow, and the more it grows, the more free Dan Kennedy we can bring to you. Also, Dan would love to give you the most incredible free gift ever. Ever, designed to help you make maximum money in minimum time. This free gift comes with almost $20,000 in pure money-making information for free, just for saying maybe. You can get this gift from Dan right now at NoBSLetter.com. Not only do you get the $20,000 gift, you also get a subscription to 2 marketing newsletters that will be hand-delivered by the mailman to your mailbox each and every month, one from Dan Kennedy and one from me, Russell Brunson. To get this gift in your subscription, go to NoBSLetter.com right now.