I speak to many people who have either started businesses or intend to start businesses. One common thread with many business ideas is that people who start and run them will often speak about targeting wealthy customers. I mean it makes sense to do so, customers with deep pockets would be lovely to have. However, there are some myths or what seem like paradoxes of wealth that get in the way of marketing and selling to this group of people properly. Let’s discuss some of these and how they impact the way we need to think about approaching wealthy people as customers.
The rich splash money
This is probably the most common misnomer about wealthy people, that they like to splash the cash. Think about this logically, regardless of their level of income people will generally become wealthy by accumulating money rather than distributing it. Wealth is the result of a mindset repeated continuously and in many cases over time. In my experience, wealthy individuals value their money (and time) very much so while you might think they would splash the cash they are more likely to demand maximum value for their money.
They take big risks
I suppose this fits perfectly with the last point as there is a belief that most wealthy people become so by taking big risks. Big is a relative term, it depends on who is looking at it. More important to note is that any risks taken by such people were usually backed by massive calculation and strategy. Assuming that they took a big risk on their business or ventures and therefore they will take a big risk on you would be a massive mistake. Once people have something they know is worth losing their instinct is to protect it.
Rich people like expensive things
Luxury markets are very complicated. From the outside looking in, there is a belief that wealthy individuals like expensive things. Now this one I don’t entirely blame people for believing because from the outside looking in that’s what just about anybody would see. Wealthy people tend to be attracted to value rather than high prices. Two quotes that I love really apply here. Firstly, price is what you pay and value is what you get. And secondly, value is whatever the customer says it is. So instead of focusing on ideas of your product being expensive keep the focus squarely on how much value it provides.
The rich like to show it
We’ve all seen the trends and social media doesn’t make it any better. Ostentatious and loud products that scream “I have money” or at least “I want to look like I have money”. Some people are attracted to these products and there is absolutely nothing wrong with that. The mistake here would be assuming that the common thread here is that wealthy people like products that show they are wealthy. As mentioned before it’s about the value proposition. Don’t let the memes fool you, Mark Zuckerberg’s favourite grey t-shirt is not a cheap shirt.
They come from money
This one is a very important misconception. I have seen people imply or deduce that certain products will not garner any interest from the wealthy. Many wealthy people come from humble backgrounds and this means they may not behave in the way that you would expect them to behave. Assuming that products related to humble backgrounds would not appeal to them is incorrect. They were people before the wealth and wealth does not change your taste buds or preferences but rather opens you up to more options.
Overall, the point is there are many incorrect assumptions that are thrown around. Approaching high net worth individuals with these assumptions can ruin your chances of counting them amongst your clientele. Are there any other myths or paradoxes that you have observed when it comes to wealthy individuals?