Perhaps the biggest attitudinal difference defining top-income earners from everyone else is this: When it comes to making major purchase dicisions, even in regard to hiring a personal tutor, attorney, financial advisor, accountatnt or personal shopper, value trumps price! The affluent demand prompt, courteous and efficient (read: time-saving) services that provide experiences that are at best pleasant, at worst, offer minimal inconvenience. As a service provider or salesperson, this means demonstrating that you really care – not just saying so, The following is a dramatic, but by no means unique, example.
Imagine investing $4 million with a financial advisor. Five years later, your nest egg has grown to nearly $6 million dollars! Your financial advisor has helped you earn a conservative 8% a year. That’s what happened to Judy, and you might expect that she was pleased with her financial advisor. Not so. For the last three years she felt as though she was simply an afterthought, with her annual performance review the last two years conducted over the telephone.
It wasn’t always like this. The first couple of years her financial advisor was in regular contact, and “even took me to lunch a couple of times.” But somehow she got the impression that she was being taken for granted. She began calculating the annual fee her financial advisor was earning relative to the service, or lack thereof, she was receiving, and dissatisfaction became the theme every time she thought about her portfolio and her financial advisor.
Then she was introduced to Jack, a financial planner, by a colleague over lunch. Although Judy’s portfolio was performing exactly as her financial advisor prescribed, she was dissatisfied. Why? Because within the world of the affluent, albeit performance being an important criteria, it is a “hygiene factor” – they expect a product (or portfolio) to perform as promised. But they also expect high – level service. And even though they come from middle class backgrounds and are exceptionally hard workers, when they purchase a product or a service, they want to be wowed – during the pre-purchase, purchase, and post-purchase phases.
In Judy’s case, her financial advisor was getting paid a fee of 1% a year. That’s over $50,000 a year! No wonder why she was feeling neglected. Another interesting fact about the affluent is the old cliché, “Price is only an consideration in the absence of value.” The affluent will pay more, but they are big sticklers for value.
As Jack recounted this story, he described how Judy initially played hard-ball with him. She felt violated, taken advantage of, and was determined not to let it happen again. Over the course of three separate meetings, Judy inquired about the number of clients Jack worked with, the level of service he provided, whether or not he would have time for her, how often he planned to meet with her, and finally, the details of his fee structure. Not once did she discuss the performance of her portfolio. In fact, Jack’s advice was to leave everything in-place for now and develop a comprehensive financial plan that could serve as a road map for her.
Was this a bizarre anomaly? Perhaps. But selling to the affluent is full of anomalies. What the affluent have in common is that they earn more, have more cash to spend, and will pay you more in commissions and fees to get what they want. For those of you who understand how the affluent think, they are your treasure chest.
From “The Affluent Handbook” by Matt Oechsli 2008
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