Marketing: Selling the Ritz to Boomers

By Christopher Zoukis

Harris Interactive reports most baby boomers are still in the workforce, and are a driving force in the housing market. The same report concludes 42% of baby boomers would like to retire in the South, 32% in the Western United States, 15% in the Midwest, and 12% in the Northeast. Which means the bulk of opportunity for marketing luxury real estate remains in the Sunbelt.  Image courtesy tourdehomes.com

Four out of ten or 40% of baby boomers own second, separate vacation homes. In fact, baby boomers account for 57% of all vacation home ownership, and own 58% of all rental properties in the United States. Ten percent of baby boomers plan to buy real estate over the course of the next year. Two-thirds of those will buy a new home, a second home or commercial property.

According to a National Association of Realtors survey, baby boomers expect to use a professional realtor when they buy property. Not only will they utilize real estate agents, but they will demand excellent service and expertise from their agent. Of boomers in the rich category, 97% own homes, and 47% own other additional real estate.

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Specialized Marketing: Status Psychology

By Christopher Zoukis

All of life is nothing more than an eternal quest for status,” says Tom Wolfe, the bestselling novelist.

Nancy Etcoff, author of Survival of the Prettiest, maintains that affluent men market themselves to members of the opposite sex through “displays of status and resources.” Etcoff goes on to quote Ovid, who said almost the same thing 2000 years ago: “Girls praise a poem, but go for expensive presents.”

Status, according to Etcoff, who is one of the world’s leading psychologists, is psychological because it is based on comparison. One person has more status than another person because he has more money, or is better looking, has a more prestigious job, lives in a bigger house in a more desirable neighborhood, wears more stylish clothes, drives a more expensive car, has a prettier wife, and so on. The list is endless. All human beings participate in this comparison, this hunt for status.  Image courtesy statuskicks.com

Status may be psychological, but is often conferred by “things.” This means luxury products and services can confer status. Like everyone else, affluent people seek status. Which means understanding and targeting the psychological concept of status is an important part of marketing luxury brands to the affluent customer.

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If You’ve Got It, Flaunt It

By Christopher Zoukis

In 2012, The American Affluence Research Center (AARC) surveyed 522 affluent men and women. The average household income of those surveyed was $304,000. Average net worth was $3.1 million, and the average value of their primary residence was $1.8 million. The survey revealed that the most desired quality of any luxury purchase was exclusivity. Those surveyed indicated they expected to remain loyal to brands offering exclusive luxury.  Image courtesy searchenginejournal.com

Tiffany & Co. agreed with AARC’s survey results. The company’s marketing plans revolve around the concept of exclusivity. In fact, that’s what Tiffany & Co. sell, privileged exclusivity. Only instead of calling it exclusivity, they call it “statement jewelry.” As part of the experience of buying a precious stone, in 2006 Tiffany started offering to take clients to a diamond mine. After watching the diamond being cut out of volcanic rock, the client chaperones the stone home, where the client actually helps decide how the diamond will be cut. The cutting or shaping of the stone takes place in Canada or Belgium. From there, the client travels with the diamond to Tiffany’s headquarters in New York City, where experts create a one-off design for the stone. Depending on the size of the stone, it could be used in a necklace, tiara, pendant, etc.

The affluent customer’s entire experience at Tiffany revolves around the feeling of exclusivity. It is the thrust of Tiffany’s marketing. And the same concept can be adopted by any company marketing luxury products to their customers.

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The Arcane Art of Influencing People

By Christopher Zoukis

Forbes reports that the next big luxury purchase among rich, single men may be the $12,500 leather belt, which has a 14-karat gold buckle and princess-cut diamonds. Why? Because as Todd Rauchwerger of J.W. Cooper says, “Besides a watch, most men don’t wear a lot of jewelry. They’ll wear a $20,000 or $30,000 watch and a $3000 or $4000 suit and a 25-cent belt buckle. Why not wear a belt buckle that goes with the rest of the wardrobe?”

The Luxury Institute (LI), a research firm in New York, did a study of rich, single men in the U.S. The LI discovered the average net worth of these men to be $2.7 million. They had an average income of $270,000 and held 45% of the aggregate annual income in the U.S. There are 4.5 million men in this category in the U.S., according to LI. They live what LI calls the “360 degree luxury lifestyle,” which means they are rolling in money. They know the difference between value and price. This means they want value and will pay top-dollar for it. In other words, they want luxury goods and services.  Image courtesy getf.org

Sellers of luxury goods and services wishing to target rich, single men have to be flexible, altering their products and marketing to target this segment.

For example, Thomas Cook Select, a luxury travel company, offers holiday travel packages classed as Premium or Luxury. Many of these packages are targeted at rich, single men. In recent years the average age range for this market has dropped from 45 and over to 25 and over, bringing about an avalanche of growth and opportunity. Many of the packages cater to rich, single men who prefer to vacation in a place where there are no children, because they want a quiet and relaxing experience.

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High End Crazy: Luxury Real Estate

By Christopher Zoukis

How does one go about marketing luxury real estate to affluent customers? The first challenge is the size of the group of potential buyers. The more luxurious the property, the more it costs. This means there are fewer people who can afford it. Which, in turn, means that mass-marketing techniques will not work for luxury real estate.  Photo courtesy activerain.com

Usually, mass-market real estate agents try to appeal to customers who already exist. If they do not already exist, the agent tries to create a market for the property. With luxury properties, however, the agent must “go where the market is.” This allows the agent to connect with people who are actively looking for million dollar homes.

The simplest method to connecting with wealthy real estate seekers is by listing the property on luxury real estate websites. These websites already attract individuals in the market for expensive properties. One tip to remember when going this route is to be sure the listing site is international in scope. Think globally, because rich investors do not limit themselves geographically.

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Razzle Dazzle

By Christopher Zoukis

There has been an explosion of wealth over the last twenty years. Not just in the United States, but throughout the world.  Millionaires are everywhere. They have lots of disposable income, and are looking for goods and services to purchase. The individuals and companies that identify, target, and market to these millionaires will profit handsomely. Indeed, they will become millionaires themselves. To be successful in this undertaking, these individuals and companies will have to position themselves correctly. Correct positioning equals attraction, and is similar to becoming a flower. Pretty flowers that smell sweet attract the bees. In the case at hand, the objective is not the most bees but the most prosperous bees. This book explains the ins and outs of becoming the flower that attracts the affluent bees. In other words, this book spells out how to attract and keep wealthy customers.  Image courtesy tumblr.com

This book has three goals.

The first goal is to tell you how to attract and appeal to affluent customers. Make no mistake attracting affluent customers is very different than attracting multitudes of customers, who regularly shop at malls and department stores.  Affluent customers rarely visit the average mall, and they don’t shop at Penney’s or Wal-Mart.  Thus attracting and appealing to the affluent involves a whole new way of thinking. This new paradigm means a whole new way of engaging customers, for affluent customers are a segment of the populace that is almost invisible, simply because they are such a small part of the populace. To appeal to this niche market means using a new way of selling and marketing.

The second goal of the book is provide insights into the psychology of the affluent customer. Wealthy customers purchase goods and services for different reasons than the average customer. Affluent people have a distinct attitude toward money. It is the attitude that comes from having money. This unique attitude is part of the affluent customer’s psychology, which explains why they buy, and what they want to buy. Knowing how they think, which in turn means knowing how they make the decision to buy also means knowing what they don’t want to buy, what prevents them from buying.

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Proactive, Reactive, and Reason Filters

By Christopher Zoukis

Proactive vs. Reactive

Another way of categorizing buyers is as proactive or reactive.  Proactive people are self-starters eager to get going.  Reactive people or buyers like to sit back, take their time, and thoroughly analyze any situation before they do anything.  Identifying a buyer as either proactive or reactive is accomplished by listening for verbal cues and by watching body language. Image courtesy of barnesandnoble.com

Proactive buyers tend to focus on goals and their attainment.  Their body language reflects impatience, constant movement.  They speak in short sentences, using active verbs.  For example, “we’re going to take care of this quickly.”  Encouraging proactive buyers to take the next step is as simple as saying, “Let’s do this.  Then you can move on to the next project.” 

Reactive buyers, on the other hand, take their cues from those around them and their environment.  Their movements are deliberate, and they speak only after much thought.  A reactive buyer might say something such as:  “Once we have all the details, we can start to put together a chart to identify which vendors we should talk to.”  Sales people should assist reactive buyers to the next step by pointing out that the analysis is complete, and all that remains is implementation.

When making a presentation to a group of buyers, a combination of both motivational techniques usually works best.  The sales person can point out that they have gathered the pertinent data, allowing them to come to an informed decision before outside factors change.

Reason Filters

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PATTERN RECOGNITION: A Summary

By Christopher Zoukis

Salespeople want to make more money.  The trick to making more money is making more sales.  And the trick to making more sales is, according to Dan Seidman, learning to speak the buyer’s language.  Once salespeople learn to interpret buyers’ verbal cues, they can choose the appropriate words to influence the buyers’ decisions.   Seidman’s book, The Secret Language of Influence teaches salespeople how to listen, gain psychological insight, and then influence others.

Patterns of Interruption

Seidman states that all buyers maintain patterns.  They do the same thing in the same way over and over again.  They respond to sales pitches the same way time after time.  The example is a buyer to whom the author has left forty-six voice mails over a three year period.  The buyer has never returned one of the calls.  Frustrated, Seidman leaves another voice mail announcing that the buyer has won the “prestigious Most Elusive Prospect Award,” for never having returned a call. Author Dan Seidman / Photo courtesy seihonolulu.com

Unsurprisingly, the buyer, now angry, returns the call.  The buyer eventually becomes a client.  Seidman’s story illustrates what psychologists call “pattern interrupt,” which is a method of changing people’s usual manner of thinking.  The author demonstrates how to use pattern interrupt in situations where buyers use their regular or usual brush-off techniques. 

In the example, the prospective buyer attempts to brush-off the salesperson by citing that the business environment is tough at the present time, thus the buyer does not have the budget to make any purchases.  Seidman’s pattern interrupt is to respond by asking an apparently irrelevant question, a non-sequitur.  The implication is that the buyer, because things are so bad, will probably soon be jumping out of his office window.  The buyer admits that business is “not that bad.”  Now that the pattern is broken, the salesperson may make their presentation.

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Outline For Proposed Marketing Book

By Christopher Zoukis

Introduction:  Goals of the Book

  1. Attracting and appealing to affluent customers
  2. Understanding the psychology of affluent customers
  3. Marketing aimed at the psychology of affluent customers

PART ONE:  The Affluent Customer

Chapter 1:  Identifying Affluent Customers  Photo courtesy of pmba.econsultant.com

  1. The moneyed customer
  2. The rich customer
  3. The ultra-rich customer
  4. What the rich do differently
  5. Goods, services, and products the affluent buy

Chapter 2:  Affluent Women

  1. Appealing to the affluent female psychology
    1. how to sell to women
    2. the opportunity of “women only” marketing

2.  Selling beauty

Chapter 3:  Affluent Men

  1. Appealing to the affluent male psychology
    1. emotion-based purchases
    2. status-based purchases
  2. How to sell to men

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Chapter Summaries for a Proposed Marketing Book

By Christopher Zoukis

Introduction

The introduction presents three primary goals of the book. Each of the three goals is briefly examined. The importance of understanding the psychological make-up of potential customers is discussed.

Chapter 1: Identifying Affluent Customers

This chapter defines three different affluence levels. The levels are based on yearly income: $200,000 +, $1 million +, $5 million +. The chapter also explains that affluent customers use their money differently than the middle class. Goods, services and products commonly purchased by the affluent are presented. 

Chapter 2: Affluent Women

This chapter tells why affluent women purchase luxury goods. The psychology of female customers is different than that of male customers. Therefore, selling to women requires a different approach. How to sell to affluent women is discussed, along with the vast opportunities of targeting female customers. For example, women are more adept at perceiving emotions in people’s faces. Women are also better at multi-tasking because they are less channeled into one way of thinking than men. Men are better at reading maps, according to research presented in Newsweek. Which means both genders are emotional and spontaneous in making purchases. The difference lies in communication. These differences will be discussed. BMW was one of the first auto manufacturers to recognize and capitalize on this gender difference. Chapter two also delineates ‘beauty’ as a product that can be packaged as an idea and sold. How selling status to women is different than selling status to men.

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