He probably wears a $50 watch.
You won't see him on a yacht. But you would find him
in his office commonly until 7:00 p.m. (even on Saturdays).
He is more interested in his local rotary club than
the polo matches. She uses her bank more for making
investments than for borrowing. She would have been
Robin Leach's last choice for a spot on "Lifestyles
of the Rich and Famous." She is more interested
in her family and coupon clipping than in champagne
and caviar dreams. Sound pretty average, right? How
affluent would you expect these people to be? If you
guessed current members of a lower middle class bowling
league, you're dead wrong. These people are part of
America's new elite rank of millionaires.
How Many Are There?
According to the IRS, there are 7
million households with a net worth of $1,000,000 or
more. Acording to Forbes magazine, there are now more
than 300 Billionaires in America. But some have taken
a beating in this volatile market. Even Bill Gates has
lost half of his net worth since the beginning of 2000,
decreasing from $80 Billion to just over $40 Billion
today. He’s worth Billions but still can’t
afford a good haircut.
Mr. or Ms. millionaire's average age is 44. The average
billionaire is only 46. And this doesn’t even
include stock option puppies. The Affluent come from
a middle class or blue collar background and likely
graduated from a state university. In fact, millionaires
rarely lead pampered lives of luxury. Of course there
are the flashy jet-setting elite who flaunt their well-heeled
posh attire and assets with aplomb. But they account
for only about five percent of millionaires nationwide.
But who are these people the working class looks to
with so much envy? Chances are you know one and didn't
even recognize her. She probably lives in the south
where the greatest numbers reside. But the highest concentration
is in the Northeast, although more make their home in
California than any other state.
Where did they get their money? Certainly not from the
lottery. According to Dr. Tom Stanley, professor of
marketing at Georgia State University, only about 20
percent are born into money. Most millionaires come
from seemingly humble beginnings. A few make it big
by developing a revolutionary product or a breakthrough
technique. But more are simply workaholics who start
by owning a small business. They often possess an uncanny
knack for hiring and retaining quality people. By the
time they reach their late forties or early fifties,
they put their name up on the office door.
Where Do We Find Them?
The new breed of millionaire often
are not hidden away in the lap of pampered luxury. One
percent of the households in America are in the high
seven figure income category. Less than five percent
have annual incomes of $75,000 or more. If you have
prospected for millionaires in the past, you probably
searched for social class and the trappings of wealth.
Yet only half of these families own and occupy homes
of $300,000 or more.
Many people are more interested in appearing to be wealthy
than developing the discipline necessary to achieve
millionaire status. In fact, many salespeople are trained
to hunt big game in the medical facilities. But often
the lifestyles of physicians are defined by the expectations
of society. Since they are in a prestige working position,
they find themselves better credit customers than candidates
for expensive real estate. They frequently live beyond
their means.
In college, I worked in a hospital as a cardio-pulmonary
technician. As a young med student, I was privy to a
lot of the doctors' personal and private conversations.
It seemed that most drove Mercedes and owned gorgeous
homes. But truly, all complained of cash flow problems
and seemed worried that the financial cards would one
day tumble. Recently a business broker friend mentioned
that among the medical practices she handled, few physicians
made more than $150,000. In fact, in the 1990's, insurance
companies were squeezing physician claims to such an
extent that only with the most business savvy will make
more than $200,000 per year.
Often the lifestyle of the pseudo-affluent focuses on
projecting a facade that consumes nearly all of their
disposable income. Since many of the "would be"
affluent live in $600,000 homes and drive expensive
German cars, feigning the appearance of wealth becomes
very costly. Credit card debt and capitalizing homeowner
equity seem to be the only way of maintaining the image:
albeit for a while.
If not doctors, then where does one snare the real goliaths
of the well-heeled? Discovering where they work and
live may surprise you. Ten of the most affluent are:
commercial printing, dry cleaning (multiple store units),
jewelry retailing, legal services (attorneys who own
multiple specialty firms who focus not only on bankruptcy
but also on corporate and real estate disciplines),
specialty tool and die manufacturing boutique, real
estate development, refuse services/collection and disposal,
real estate brokerage and property management, industrial
plastics manufacturing and commercial machines and equipment
wholesaling. These don't seem to be glamorous high affluence
categories, yet they may be your best bet for trapping
prospects who won't say they can't afford it.
How Do You Sell To Them?
How do you hunt for big game? Forget
your hard sell "29 different techniques to a close"
routine. According to Jonathan Robbin, chairman of the
Charitas Corporation, millionaires should be sold to
with great deference. The Charitas Corporation which
specializes in developing demographic studies for marketers,
determined that the elite income earners first ask lots
of questions. They also are not as self-consumed as
the characters on "Dynasty" and "Dallas"
might lead you to believe. They are very concerned with
family although most are males with non-working wives.
They care also about friends, politics, and work. Their
spouses are often kept in the dark about the family's
income. Millionaires who were interviewed said they
didn't want competition both at the office and at home.
The best way to sell to the highly
affluent is to do a good job of networking. These earners
don't respond to cold calls. They also are unlikely
to answer surveys and telephone machine solicitation.
But, they are very likely to take kindly to solid referrals.
Once you get to a millionaire and make a sale, the referrals
should follow. But, you must also follow up. Recent
research by Registered Representative magazine has suggested
that the October 1987 stock market crash was devastating
in the long-term to the securities industry not solely
because clients lost money. The greatest harm was reaped
because brokers had neglected to keep in contact with
the people who paid their commissions after the tragedy.
Another technique is to focus on industry
organizations. The dry cleaning industry for example
has numerous association meetings. Every one needs speakers,
and one of the hottest topics in America is how to invest
and what the future will hold. Offering to write monthly
on financial issues for commercial printing industry
magazines may make your cold calls into warm calls when
you mention how connected you are.
Also, stay sensitive to the rising
affluence of women. In 2000, there were more than 200,000
women with a net worth of one million dollars or more.
Women's business groups are a great place to position
yourself as an expert. Again, this is achieved by speaking,
writing, or acting as an expert resource.
Another technique to use in prospecting
for millionaires is to acquire an association directory
of an affluence-rich industry. A cold call to a member
of the state metal electroplating society may meet with
less resistance than you think!
There is gold in them thar hills. But
the secret is knowing where to look. If you prospect
the same places as other salespeople, you're sure to
work hard and make a mediocre income. But if you know
where the big game are, other salespeople will approach
you and ask how you possess so much genius and how can
they also gain it. Your future success lies in your
skill, not luck. Hunt the big quarry. Let your competitors
knock each other out trying to bag the more common breeds.
