Growing The Value of Emerging Business    

Create A Network Of Wealthy Customers

The New York-based Luxury Institute tells us there are 11 million households in the U.S. with an average net worth of $US 3.1 million and an average annual income of $US 256,000 - “For most luxury goods and services firms, these are the 20% or less of the clients who deliver 80% of the profits.” Whether the 80/20 rule applies to your business or not, if you can identify your wealthy customers you can target them directly with high-value offerings. And even if you don’t have 20% of customers that you’d consider ‘wealthy’ you can create a network of customers that will help you grow your business and greatly benefit your bottom line.

Define your trading area

Start with an accurate definition of your trading area – where your customers are. The geographic area you identify as your trading area will be the boundaries for choosing members of your network. For some businesses it will be a neighborhood, and for others it will be an entire city or state. This is an important step in the process because the demographics of your trading area will be used to identify the pockets of wealth that lie therein.

Find your pockets of wealth

Every area, from the size of a suburban neighborhood to a city or state, will have parts that are wealthy and some that are not so wealthy. Demographic data can be used to locate the wealthy, that is, high income segments in your overall trading area. This information can be sourced from local libraries and government departments, and is generally segregated by zip codes, electoral boundaries, place names or some other identifier you can use in your research.

Cross reference your customer database

How many of these ‘wealthy’ individuals are already in your customer database? This is the first thing to check. You may already have the contact details for a significant number of regular customers who fit into this category. Because you haven’t thought about segmenting them according to their wealth you may never have thought about creating high-value offers that target them directly.

Create lists of wealthy prospects

Now you want to obtain mailing lists and other contact details of people who live in those areas you’ve identified as wealthy. If it’s simply people living in a particular part of town you could do it by renting a mailing list from a list broker for those neighborhoods or for particular zip code areas. If it’s all wealthy people in a city or state you’d be best to speak with a commercial mailing list provider who could create the list that you need and arrange to have your marketing materials sent out on your behalf.

What can your offering be?

This will naturally depend on the business you’re in. A wine retailer might want to make these wealthy prospects an offer of a dozen bottles of fine red wines. A furniture store might offer them a home decorating service. A car dealer could offer them a test drive in a luxury vehicle. Your offering to them should be the best products and brands your industry has to offer because you know they can afford it.

How do you communicate your offer?

Because your data will probably be geographic in nature this is a natural for direct mail that can target specific addresses. When you have your offer ready, create a direct mail piece that presents it attractively with appropriate up-market illustrations. Link this offer to your Internet site where it can be repeated for those who want to place their order online.

Focus your content on what your wealthy customer will get. Show an understanding of their lifestyle and tastes.  For most of your prospects this will be your one opportunity to make a good impression, so demonstrate that you know what they want and have taken the trouble to make it available to them.

Source: Ran One

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