He probably wears a $50 watch. You won’t see him on a yacht, but you will find him in his office commonly until 7 p.m., even on Saturdays. She is more interested in her family and coupon clipping than in champagne and caviar dreams.
If you guessed these are members of a lower middle-class bowling league, you’re wrong. They are part of America’s new millionaires.
According to the IRS, there are 9 million households with a net worth of $1 million or more, and according to Forbes, there are now more than 300 billionaires in the United States. Mr. or Ms. Millionaire’s average age is 44, while the average billionaire is only 46. And this doesn’t even include inherited wealth, which accounts for a surprisingly low 3 percent of the wealthy. The affluent come from a middle-class or blue-collar background and likely graduated from a state university. Most millionaires rarely lead pampered lives of luxury except for the flashy elite, who account for only about 5 percent of millionaires nationwide.
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 in any other state.
Millionaires are very likely to take kindly to solid referrals.
According to Dr. Tom Stanley, former professor of marketing at Georgia State University and author of several books on the affluent, only about 20 percent are born into money. Most come from seemingly humble beginnings, and 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, and by the time they reach their late 40s or early 50s, they have put their name on the office door.
The new millionaires 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 5 percent have annual incomes of $100,000 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 $500,000 or more.
Many salespeople are trained to hunt for the affluent in medical facilities. But often the lifestyles of physicians are defined by the expectations of society, and they frequently live beyond their means.
In college, I worked in a hospital as a cardiopulmonary technician. As a young medical student, I was privy to a lot of the doctors’ conversations. It seemed that although most drove a Mercedes-Benz and owned a gorgeous home, all complained of cash-flow problems and seemed worried that the financial cards would one day tumble.
Often, the lifestyle of the pseudo-affluent focuses on projecting a facade that consumes nearly all of their disposable income. Since many live in $700,000 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.
Where to find them
If not in the medical community, then where does one go to find the well-heeled? Discovering where they work and live may surprise you. Ten of the most affluent businesses are: commercial printing, dry cleaning (multiple-store units), jewelry retailing, legal services (attorneys who own multiple specialty firms that focus not only on bankruptcy, but also on corporate and real estate disciplines), specialty tool and die manufacturing, 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 like glamorous, affluent categories but may be your best bet for reaching prospects who won’t say they can’t afford it.
How to sell to them
According to Jonathan Robbin, chairman of the Charitas Corp., millionaires should be sold to with great deference. The company, which specializes in developing demographic studies for marketers, determined that elite income earners first ask lots of questions and 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 men with wives who do not work outside the home. They care also about friends, politics and work. Their spouses are often kept in the dark about the family’s income.
The best way to sell to the highly affluent is to do a good job of networking. They don’t respond to cold calls and are unlikely to answer surveys and telephone-machine solicitations. 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.
The single best way to come in contact with the affluent is to use introductions. These are like referrals but you enlist the referral source into a three-way conversation. The beauty of this is your referral source will sell you the affluent prospect without your having to blow your own horn. This is the single most elegant and successful way to gain affluent clients.
But you must also follow up. Recent research by Registered Representative suggests that the 1999 stock market crash was devastating in the long term to the securities industry not only because clients lost money, but the greatest harm was done because brokers had also 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 group needs speakers, and one of the hottest topics in America is how to invest and what the future holds. Offering to write monthly on financial issues for commercial-printing industry magazines may warm up your cold 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 $1 million 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.
Yet another idea to use in prospecting for millionaires is to acquire an association directory of an affluent industry. A cold call to a member of the state metal electroplating society may meet with less resistance than you think.
Kerry Johnson, Ph.D., is a best-selling author and speaker. His coaching program is called Peak Performance Coaching. For more information, click on www.KerryJohnson.com/coaching or call 800-883-8787.