Even through difficult economic conditions, affluent homeowners are not seriously curtailing their spending, particularly on their homes. But they are changing the way they spend. According to RSVP Publications, an upscale direct marketing firm that targets the top 18 percent to 20 percent of American spenders, affluent homeowners are being much more careful both with the amount they spend and with whom they spend it. Custom builders who cater to the affluent should take note and perhaps consider new marketing strategies that better target their client base.
RSVP identified a few clear trends in the way wealthy are now choosing to spend. “Staycations,” a vacation taken in the comfort of one’s home, are replacing destination trips, with the money saved often used for a home project, according to Larry Golden, co-CEO of RSVP. A different approach to the staycation is purchasing a second or vacation home, an option still attractive to the affluent, RSVP’s research shows.
Economic concerns have some affluent homeowners leery of committing large sums of money all at once; they would prefer to break larger projects down into multiple stages. Offering a phased approach and being flexible on project scope and timing can help the client feel more comfortable with moving forward. “Adapting is one of the keys to prospering and surviving through this challenging economy,” Golden says.
For many builders and contractors, adapting the way they market their companies or serve their high-end clients may be necessary. To get through this difficult period, RSVP recommends that its home improvement, builder, and contractor advertisers adjust their marketing to reflect the services, products, and scope in which the affluent are willing to invest right now.
Even affluent homeowners are on the lookout for a good deal, Golden points out. “Affluent people want to feel like they’re getting their money’s worth and spending their money wisely, so you need to make an offer that they see value in,” he says. Affluent homeowners want to know that they are getting a quality product or service, particularly with home improvements, and that they are spending their money in the best place, with the best person, and on the best deal. Discounts, incentive offers such as rebates, or client loyalty programs that offer special privileges are attractive to affluent homeowners.
“Builders should keep their clients close and talk to them. If there’s been a good relationship in place, it’s much easier to work with a current [or previous] client than find and establish relationships with new ones,” Golden says.
While past clients are invaluable at word-of-mouth marketing, Golden recommends more active forms of marketing to generate fresh prospects. “Builders have to realize that in this market, if they want to be here when things change and get better, they’re going to need to market more than they have been—but carefully,” Golden says. Builders and contractors should not rely on passive marketing strategies, such as Internet searches, to reach the right audience.
A proactive marketing plan should have a message that is tailored to the correct market segment and to the correct individuals within that market, based on geographic region, age, sex, and the products and services offered. “Consider newsletters, phone calls, invitations, and other formats where a business can differentiate itself from the pack,” recommends Golden.
Proactive marketing can drive potential clients to a company’s Web site, so the Internet is still an important medium for providing information about your services. Affluent homeowners are likely to use the Internet to do their homework before making a purchase, according to RSVP.
Unfortunately, too many businesses that target affluent customers overlook the importance of handling inquiries properly, Golden notes. “In a challenging economy, qualified prospects should be treated like gold. Phone calls should be promptly returned, and good listening skills are a must. Appointments should be timely, sample books well-organized, and good verifiable references readily available.”
