Feb 8

Rich vs. Affluent: The Difference is Substantial

Posted in Affluent market, Communication, Marketing

It shouldn’t be the top 1% causing the rest to gather in crowds large and small. The top 1 percent of income earners paid 38% of all federal income taxes in 2008, while the bottom 50% paid only 3%. Hmm.

Add a decimal point, maybe two. Now, we have separation. The average CEO of a Fortune 500 company makes 4,000 times the average worker. The five heirs of Sam Walton hold more wealth than the bottom 30% of all Americans. In retirement, Mitt Romney made, on average, $60,000 an hour over the past two years. Bill Gates is a horse of a different color, and he’s not even the richest man in the World. That honor goes to Carlos Slim, a Mexican, and his personal fortune increased by $20 billion in 2011 alone.

Let’s look at Bill Gates’ money:

Bill Gates earns $250 every SECOND, that’s about $20 million a DAY and $7.8 billion a YEAR! Our national debt is about $5.62 trillion. If Bill Gates wants to pay the debt by himself he will finish it in less then 10 years.

He can donate $15 to everyone on earth and still be left with $5
million for his pocket money.

So what?

This is America. If you resent the Walton fortune, don’t shop at Walmart. If it rankles you that the CEO of Bank of America made $10 million in 2011 — in was a tough year for Bank of America, what with the foreclosure mess and a sagging stock price — move your money to your local bank.  And, if you think the wealth gap is severe in 2012, consider that at the height of his riches, J. D. Rockefeller had more money than the US Treasury. By a long shot the richest man in the history of America, he was our first billionaire. Adjusting for inflation, he is often regarded as the richest person in history.

What did Rockefeller do with all that money? Rockefeller spent the last 40 years of his life in retirement. His fortune was mainly used to create the modern systematic approach of targeted philanthropy with foundations that had a major effect on medicine, education and scientific research. Bill Gates and his golfing buddy, Warren Buffet, are following in his footsteps not only in accumulating wealth, but in putting it to use for their fellow man.

As a student of the wealth and affluence in America, I want to make the point that it is the affluent that invest their money, create jobs and are the only ones who can spend our way out of the Great Recession.

Marketers know this and they see the belts of the affluent loosening. Luxury automakers from Rolls Royce to Audi and Porsche all have had record years in 2011, both in America and around the globe. Other sectors of the economy, such as travel, in particular, are seeing similar growth. Barring a global catastrophe, by 2014 the U.S. economy should have righted itself.

What all marketers must pay attention to is “re-set of the minds” of the affluent. When the pendulum comes back, it will be to a new place.  A place where the answer to the question, “Is it worth it?” needs an especially resonate answer.

- Dan

 

 

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Feb 7

Are you sure they want it?

Posted in Uncategorized

How many times have you seen a product advertised on TV or on the store shelves and one question pops into your head, “Why?” Like the super annoying singing fish, Big Mouth Billy Bass. Or the UroClub, a hollow golf club that doubles as a urinal when you’re out on the course and feel the urge. Both topped Inc. Magazine’s Dumbest Products of the Decade from two years ago. And both are classic examples of why it’s a good idea for companies and entrepreneurs to first figure out if there’s a market need for the product they want to produce. Do you think someone would have produced house slippers with headlights on them if they had taken the time to figure out if there was a market need?  Probably not. Smart companies first determine a market need, then they take time to establish that market and create buzz around a product before they introduce it. Apple is a master at this with the iPhone and iPad and look at the success they’ve had. Whether you’re introducing a product or a new service, it’s worth it to spend some time finding out if there’s really a market demand for it.

 

 

 

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Feb 6

It’s ok to break the rules, as long as you’ve mastered them first

Posted in Uncategorized

It’s sloppy and unprofessional to not know what you’re doing and do things wrong. You’ve got to educate yourself and do things right.

However, once you’ve learn the basics and mastered advanced skills, it’s lazy to NOT break them. Blaze your trail, cut your own path, find new and better ways to do things. That’s how you succeed. That’s the entrepreneurial spirit that makes America great.

For the best sales results, you can’t do the same thing over and over again. You’ve got to do new, unconventional things. And it’s ok.

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Feb 3

Hi, how are you? Buy this now…

Posted in Uncategorized

I have a family member in sales. I never get an email from this person, except once a month, I get a corporation-generated email that says something like, “Hi, Name! I hope you’re well. This is an exciting time! Try our new….” I opened probably 3 of these emails before I realized it was just that someone added me to the email list. No one was really emailing me to say hi or see how I am.

I have friends who send me their company’s emails. I appreciate them and many of them receive PB&J, LaBov’s monthly enewsletter. The difference? We have a relationship with each other. When reaching out to your customers–and family/friends–deliver value. Communicate. Share something they can use. Do not only reach out when you have a sale on your widget.  A shallow hihowareyoubuythis is never welcome. Even when coming from a family member.

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Feb 2

The Luxury Car Salesperson’s Test

Posted in Affluent market, Automotive industry, Customer relations

True or false? A luxury car salesperson should wait for the customer to ask for a test drive.

My spouse and I were just at a luxury automobile dealership. Beautiful cars. We loved seeing them all, but one stood out. I said to my partner, “Take it for a test drive!” He smiled and acted coy. You could tell he wanted to go for a spin. The salesperson? He said nothing. I repeated the statement emphatically three more times. Nothing. No offer to take the car for a test drive. We left without having taken a spin.

Later, we received an email asking us if we wanted to come back to take the care for a test drive.

-Emily

Salesperson’s test result? Fail.

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Feb 1

Filthy Rich: Redux

Posted in Affluent market

Etymology has always held a fascination for me, especially phrases we use in context but don’t really understand how the words came together: the-whole-nine-yards*, pomp and circumstance**… and filthy rich.

“Filthy rich” can’t be explained without looking at the word “lucre”. From the 14th century, lucre has meant “money” and is referred to by writers such as Chaucer and John Wyclif. These references generally included a negative connotation and gave rise to the terms “foul lucre” and “filthy lucre,” which have been in use since the 16th century.

“Filthy lucre” appears first in print in 1526 in the works of William Tindale: “Teaching things which they ought not, because of filthy lucre.” Tindale used the term to mean “dishonorable gain.” Following on the term “filthy lucre,” money became known by the slang term “the filthy,” and it isn’t a great leap from there to the “filthy rich”. This was first used as a noun phrase meaning “rich people; who have become so by dishonorable means.”

The term has been used this way in the U.S. since the 1920s. An item from the Ohio newspaper, The Lima News, in February 1929, deplored the get-rich-quick attitudes of some who were exploiting those who had to sell their homes at unreasonably low prices in order to eat during the economic crash: “There is a depressed market. If any of our stock-gambling filthy rich want a winter home, now is the time to acquire it.”

And so, at the turn of the 21st century, we hear about the 1% from the hue and cry*** of the 99%. Cash is king, a phrase that needs no explanation, is in play and, arguably, the rich are getting richer in the wake of the Great Recession much like they did following the Great Depression: buying real estate at greatly distressed prices. Not that there’s anything wrong with that… IMHO. History has a way of repeating itself.

-Dan

* The origin of this phrase is uncertain and wasn’t in wide circulation before 1961. Why? In May 1961, the American athlete Ralph Boston broke the world long jump record with a jump of 27 feet 1/2 inch. No one had previously jumped 27 feet. This was big news at the time and widely reported. Surely the feat cried out for this headline: “Boston goes the whole nine yards.”

** “Splendid celebration with ceremony and fuss; also, the title of several military marches played at ceremonies, such as graduations.”

*** “A loud clamour or public outcry.”

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Jan 31

Collaboration: A good recipe for success

Posted in Uncategorized

When two things go together like peanut butter and jelly—or even better…peanut butter and chocolate— it’s a beautiful thing. Now if the peanut butter is made by one company and the jelly is made by another company, it would make sense to get the two companies to join forces in their marketing efforts. Such was the case with Kraft’s Velveeta cheese and ConAgra’s Ro-Tel diced tomatoes. Put the two products together and you have a delicious queso dip. Put the two brands together and you have a marketing partnership that’s made a huge difference in their businesses. While it’s taken a lot of give and take, the two competing companies have made the relationship work for the success of their products. It’s a new way to look at the competition and one that’s proven, at least for Kraft and ConAgra, to work wonders.

 

 

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Jan 30

Walking after midnight

Posted in Uncategorized

There’s an old country song (written by Alan Block and Don Hecht, I like Patsy Cline’s version) called “Walking After Midnight.”  It’s about a lady who goes out walking after midnight, just like they used to do, searching for her lost love. If you’ve always walked the same path to get customers, you are probably walking along, fruitlessly, just like Patsy was.

Branch out. Try something new. Introduce yourself to someone new. Join a club. Take up a hobby. Even if your tried and true ideas are working, you need to mix it up and look in other places. At LaBov & Beyond, we have created tools for salespeople to self-assess and see where they could find new ways and places to prospect. Maybe it’s online. Maybe it’s at a trade show. Where are you prospecting now? Hopefully, you don’t just wait for someone to walk in the door.

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Jan 27

The proof is in the pudding

Posted in Uncategorized

I like watching cooking competitions on the Food Network. I think I know who will win before it’s announced. I’m very often right. How? I obviously can’t taste the food.

It’s by watching the chefs’ behaviors. When you see how they perform under pressure, when you see how they treat competitors and judges, you can get a sense of who can deliver. You can see who has confidence and who has bravado. You can tell who cares, who has attention to detail, who knows what he’s doing, who has good instincts, who rises to the challenge, who panics, who is haphazard and just trying to beat the clock. You can tell who has done their homework on how they will be judged, and then those who choose to honor it or ignore it.

These non-cooking behaviors are indicative of their skill level, talent and performance. Think about that when selling. You need to exude confidence and authority so others feel safe dealing with you.  But you also have to do the work to be great and improve on what nature gave you.

 

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Jan 26

Substance Over Style

Posted in Affluent market, Marketing

Tiffany just reported a dip in its 2011 holiday sales, despite energetic and creative marketing that incorporated exceptional digital and social media campaigns.  At the end of the day, companies have to sell what consumers want. And this holiday, fewer than expected said “yes” to the ionic blue box.

So, what do these sale figures mean and can we make any guess as to whether a trend is in motion? Much of  Tiffany jewelry is recognizable, almost as much as Louis Vuitton bags are. So, if affluent consumers aren’t buying blue, and given the discord between the rich and the poor the likes of which we haven’t seen since 1932, it may be that the affluent are looking for substantive and subdued luxury rather than conspicuous style. The only exceptions seem to be the celebrities and the ultra wealthy – are they immune? – many of whom continue to be exceedingly ostentatious: think a $1 million hospital suite for Beyonce and her new baby and $88 million sale price for a NYC apartment paid by Russian billionaire Dmitriy Rybolovlev for his 22-year-old daughter.

Marketers beware. This may be the time to soft pedal “style” and speak volumes on “value.”

-Emily

 

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