The Affluent E-Factors
“There is perhaps no feeling more acute than being left out.”
—MARK PENN, IN HIS BOOK MICROTRENDS
A short preface … since publication of the first edition of this book in 2009, I’ve gotten more unsolicited, favorable comments about this chapter than I would have guessed. Marketers and merchants of every stripe have told me of very practical applications—reworking their marketing, rewriting or replacing their advertising, altering the sales presentations and scripts they and their staffs use. A dentist conducting public seminars to get implant patients sent me his “before” script, his “after” script, and reported a 170% improvement in booking of appointments at the end of his seminars—accounting for over $600,000.00 more dentistry performed, year to year. I tell you this so that you don’t miss its importance. An investment firm retooled its lead generation advertising, making sure to embed all seven of the extra, affluent E-Factors below, and more than doubled response. I could go on. I tell you this so that you don’t somehow miss the importance and usefulness of this chapter.
E-Factors are the emotional drivers of buying behavior. For years I have taught sales professionals and marketers a generic list of E-Factors and done my level best to get them to rely on that list, whether selling to the CEO in the boardroom or mom ‘n’ dad in the kitchen at home. The most common mistake made by marketers is an egotistical belief that their customers are smarter, more rational, and more sophisticated than others, thus not controlled by E-Factors. It’s a costly egotism. Everybody’s buying behavior is driven by emotions, justified as necessary, after the fact, with logic.
Generic E-Factors that Apply to Everybody
Fear |
Guilt |
Pride |
Greed |
Love |
In addition to the E-Factors affecting everybody, the affluent have a particular set of E-Factors to consider, some of which may surprise you:
• insecurity
• fear of being found fakers
• desperate desire not to commit a faux pas
• today, not passé
• feeding emotional emptiness
• giving selves gold stars
• after all, what’s the point of being rich
The affluent are insecure in many ways. They certainly worry about going backward, about losing their money, status, or privileges. If you’ve never been rich, you have no frame of reference, but if you’ve been rich then poor, you know what you’re missing! They are acutely aware of the aggravations, inconveniences, and financial difficulties endured daily by ordinary mortals that they have left behind—and lose a few winks every night worrying about waking up back there again.
More importantly, they are concerned with being found out. Affluents who have gotten there largely or totally on their own become keenly aware that everybody else thinks of them as profoundly smarter or more talented or privy to special information or otherwise superhuman. Many actually use this in the attainment of career or business success, making themselves into and being accepted as wizards. I’ve been in the wizard business myself for three decades and have wound up hanging out with an entire community of them. We know wizardry is more illusion than reality. I often say if ordinary people realized how ordinary in capability most millionaires are, there’d be a lot more millionaires—what holds most back isn’t lack of opportunity or lack of capability, but the illusory belief that millionaires possess some special abilities they do not. The affluent are also very sensitive to judgment by their own chosen tribe or other affluents and are worried about “using the wrong fork” one way or another, showing up in an out-of-fashion dress, not knowing what the others know and converse about during cocktails at the club. Think of the whole thing as a high school clique, and everyone in it as desperate for acceptance by the others and secretly feeling the others may be superior.
These anxieties actually spur a lot of productive behaviors and ironically contribute to the successful becoming more successful, the rich becoming richer. They may eat healthier and exercise more to look better as a path to status with peers. They may read more, read more eclectically, and stay more abreast of political and financial news, leading to more successful investing. They may contribute to charitable and civic organizations and activities as a means of self-validation and validation within the tribe. These anxieties can obviously be used in selling to them, and both for-profit and nonprofit marketers should pay heed.
Then there is the matter of emotional emptiness—the longstanding debate, and joking about, whether or not money can buy happiness. People without money like making themselves feel better about their situation by insisting that the rich are no happier and may be less happy than the non-rich. Having been poor and now relatively rich, I can assure you that money buys a lot of access to opportunities, experiences, comforts, and conveniences that can lead to happiness, but I don’t think it directly and itself buys happiness. Other than Disney’s® Scrooge McDuck®, I don’t know of anybody who gets joy from going into his vault and playing with his money like a child playing with toys. But I know quite a few affluent adults who buy some very expensive toys and enjoy playing with them very much. There is, however, an underlying level of disappointment in most affluents with the fact that their affluence isn’t a true Easy Button™ that works without fail or a crown everyone recognizes and bows to. When I switched from driving old, bad, cheap, beater cars to my first shiny new Lincoln Continental, it was a supreme disappointment to discover that birds crapped on its hood with impunity, just as they had my bad cars. You’d think the birds would show some respect! And it is true that a lot of affluent consumers’ purchasing is done as a means of showing themselves respect and giving themselves recognition for their hard work and accomplishment that they don’t feel they are getting from others. Being told, subtly, that “you deserve this (and most others don’t)” and “owning this signifies accomplishment and status and commands respect” is extremely persuasive to the affluent.
Dan Kennedy’s #4 No B.S. Key to the Vault
Make owning your product or being your client signify something.
Should you, for a moment, think the affluent are not motivated by this seeking of recognition, you should familiarize yourself with the fundraising modus operandi of the Republican and Democratic parties and candidates. Much of it revolves around motivating affluent individuals to be bundlers and bring together groups of maximum donors, thus raising $50,000.00 to $100,000.00, or more in clumps, for which the bundler is rewarded with invitations to special events like cocktail receptions at the Vice President’s home or dinners with a Congressman seated at every table of eight, photos with the politicians, little trinkets like presidential seal cufflinks and suitable-for-framing parchment certificates. I have seen it as a donor myself and used it to help political candidates as an advisor. It is every bit as pin and medal driven as a direct-selling organization like Mary Kay® or Amway®, except money is being raised rather than made, and it is millionaires and multimillionaires vying for the emerald or ruby or diamond pin, rather than cosmetic, vitamin, and soap sales agents.
The mass-affluent also have their own special E-Factors:
• the aspirational acquisition
• I own therefore I am
• knowing the secret handshake and having those who know it know you know it
This is all about being part of the clique. It once was all about having stepped up. Having visibly arrived. In the post-World War II era, when the suburbs were becoming both a place and a way of life, it was called “keeping up with the Joneses.” Auto, TV, home improvement, and similar industries—as well as credit companies—benefited by this force of nature; if one driveway on the street suddenly provided home to a new station wagon, a fleet of station wagons was sure to follow. But today, there is a more complex collection of emotional drivers behind the purchases of the mass-affluent. There is some of the “Look, we’ve arrived” going on, but a lot of purchases are made as a forward statement of “where we’re going.” I call these aspirational acquisitions. The woman with a full-time career and two kids who is too exhausted to cook anything you can’t microwave in its own dish still buys a $75,000.00 custom kitchen with a cooking island and state-of-the-art equipment, as she aspires to be more Martha than Rachael, and intends to devote more time to the art of cooking very soon. If you carefully tour the typical mass-affluent’s home, you’ll find ownership of all sorts of things bought because his peers have them, other things bought with the strong intention of investing time and energy in them sometime soon—from nearly empty home wine cellars to rarely used home gyms and saunas.
The affluent seem to mature in their attitudes about owning things, and the longer they are affluent and the more affluent they are, the more they choose and buy luxury goods and services for practical and functional reasons regardless of symbolic statement made. But for the mass-affluent, the things they buy and own and their self-images are tightly linked. “I own, therefore I am” is a powerful driving force. If the most popular and perceived-as-sophisticated mom in the neighborhood wears x, drives x, enrolls her child in x, and I do the same, I am as sophisticated as she. Ownership equals being.
You can profit significantly by giving serious thought to how you may present your products, services, and business in sync with these E-Factors.
There has been such a constantly rising tide of good economic news during the first 18 months or so of the Trump presidency that almost unbridled optimism has pushed all caution into exile. But, as I completed this, late in 2018, an alarm-bell fact was that the average consumer debt per U.S. household was at a record high, topping the peak immediately preceding the 2008 crash and tiresomely long, slow recovery. Some would argue that the debt is inflated by mortgage debt and student loan debt (in record delinquency) and that if those are separated from all other consumer debt, there’s less reason for worry. To me this is akin to insisting, if separating Lincoln’s assassination from the evening, it was a nice night at the theater. Debt is debt is debt, and a highly indebted consumer population is fragile, its future spending unreliable. That makes taking it for granted stupid.
The next recession may be close or far, triggered by unsustainable debt or unleashed inflation or overseas economic troubles washing to our shores or any number of other predicates, alone or combined, but two things are certain: One, there will be one, and two, the epic-sized debt will not be helpful when it occurs.
Raising your aim to more affluent clientele makes perfect sense in good economic times when there is robust spending from top to bottom of the money pyramid. Even when spending is flowing from the middle class and even lower earners, there’s still more price and profit elasticity with affluent customers. But the case for going there now not later is also founded on sensible, responsible prudence. When an economic “adjustment” comes—not if; when—it is always too late for most to abruptly move up to higher, safer ground. Desperate need may be motivational, but it is rarely helpful in practical terms. Falling off a high cliff is, I imagine, motivational, but it’s a tick late as motivation for erecting a safety fence at cliff’s edge or donning a parachute or putting a safety net at the bottom.
By all means, profit from and enjoy a boom like the one we’ve been experiencing as I’ve been updating this book. Celebration is fine. But the business owner and leader must be creatively schizophrenic. Simultaneously enjoying dancing in the summer sun and readying for fall and winter. The best time to buy insulation, a new furnace, and firewood is before there is even a chill wind foretelling of winter.