This blog post has been authored by Stand Out Online Member Kelly O’Neil, Innovate Media Services
The economic landscape for service-based business has been shifting for some time, but 2020’s COVID-19 pandemic has really thrown things into uncharted territory. It’s got business owners worried, to say the least. Many are wondering what the next move will be – and how to prepare for it.
The good news is, there’s always room at the top. Companies that know how to attract premium clients are always better positioned to profit in any economy. But that said, you can’t be complacent. It’s critical to know your market, and when big changes are afoot in the world, you can bet there will be changes in the market as well. Whether you’ve been serving a wealthy clientele for years or are just getting started marketing to the affluent, you need to know what’s going on so you can respond appropriately in your business.
Lucky for you, I’ve identified the fundamental changes that are occurring in the affluent market, why they matter, and how you can use this information to make sure you’re set up to profit and thrive in the coming months.
1. BUCKLE UP FOR A RECESSION
You may be aware that CEOs and CFOs have been predicting a recession for some time now, even while we were still enjoying a robust global economy overall. With the widespread economic impact brought about by the pandemic, many experts are predicting that the worldwide economy will be in the grips of a recession by the second quarter of 2020. A potential stock market crash, housing market crash, and sluggish GDP growth are not off the table here.
Remember the Great Recession of 2007-09? It caught many business owners off guard, with little to no plan in place for pivoting within the shifting economy of the time. This is where service providers get hung up; resting on your laurels and staying in your comfort zone leaves little room to maneuver and adapt.
You may be left wondering, “what can I do to brace for the economic impact my business is sure to face?”
Well, there’s still time to get ahead of the game. The LAST thing you want to do is throw up your hands in despair. Remember, fortunes were made even during the Great Depression. In fact, I have a saying: recession is just a shifting of wealth from the timid to the brave. I want to remind you that there are safeguards and strategies you can put in place to protect your business in 2020. If you play your cards right it’s quite possible for you to actually walk out of this in a better position than before! (Just ask many of my clients from the early 2000’s.)
Affluent people in particular tend to be far less hit by a down economy, and many actually profit from it. So there’s never been a better time to target the millionaire market. Having a good understanding of where this market is, where it’s going, and how your business fits into the equation will be the difference between becoming a recession casualty and a recession rock star. So let’s take a look at some more market changes you should be aware of.
2. THE AFFLUENT MARKET IS SHIFTING
Right now, wealth disparity is at an all-time high. According to the Pew Research Center, household incomes have grown only modestly in this century, and that economic inequality is continuing to widen. The rich are getting richer, the poor are getting poorer, and the middle class is getting squeezed out altogether.
We haven’t seen this type of disparity in wealth since the days leading up to the Great Depression of the 1930s. Nearly half of the world’s entire wealth is currently in the hands of millionaires. With a total of 46.8 million millionaires worldwide, they collectively possess approximately $158.3 trillion.
What does this mean for your business? Well for one, it spells opportunity for those targeted to appeal to the uber-wealthy.
But if you have been targeting the mass affluent? You need to be aware of some significant changes to your target demographic. The dollar doesn’t stretch as far as it used to, so they have less discretionary income, and many are vulnerable to layoffs in a recession. So you might want to look up the ladder a bit and re-think your ideal target client.
3. MEET THE NEW “MASS AFFLUENT”-THE HENRYS
The once “mass affluent” – those earning $85,000 and above- are no longer a viable demographic. We are now looking at an income in the $100,000 to $249,999 range to be considered “mass affluent.”
This category of consumer is being regarded in a new way and we are identifying them as the HENRYs (High Income Not Rich Yet). These new “mass affluent” consumers account for the top 20% of earners overall. They make up the bulk of the affluent market these days, and the number of HENRY’s is steadily growing. Many are young and are quickly scaling the career ladder.
For the majority of service providers, retargeting to appeal to the HENRY crowd may be the best bet to provide stability through economic turbulence.
4. THE NEED TO STAND OUT IN A CROWDED MARKET
Market saturation is exceptionally high for service-based businesses at the moment, especially only online. Due to the global pandemic, consumers are now utilizing the internet for daily functions like grocery shopping, working, and doctor’s appointments – which means everyone is in a mad scramble to get online and compete.
Though this increase of e-commerce means the market is more crowded, it also means there will be a whole new group of potential clientele potentially looking to you for services. It’s more important than ever to differentiate yourself and to identify opportunities for attracting high-quality clientele through inventive and effective marketing campaigns.
BE A RECESSION ROCK STAR
The old proverb says, “necessity is the mother of invention.” I like to say, “necessity is the mother of innovation.” It may be scary to look ahead and wonder what the future holds for the economy or your business. But if you are ready and willing to adapt, innovate, and take action you can actually turn this economy into a huge opportunity to revolutionize your business or even your industry.
What does 2020 hold for your service-based business? That’s up to you! It’s time to buckle down, do the work, and reap the rewards.
But, you don’t have to do it alone! In fact, one of the best ways to get ahead in today’s market is to collaborate to accelerate. If you’d like to be a part of a group of bold-thinking business owners who are proactively planning and collaborating to not just stay solvent but to THRIVE through any shakeups 2020 may bring, join the Marketing To Millionaires™ Success Circle on Facebook here!
Kelly O’Neil is a multi-award winning entrepreneur, affluent marketing and brand-marketing expert for the next generation of innovative companies and thought leaders.
As a highly successful marketing consultant for service-based businesses, Kelly knows exactly what it takes to exit a recession stronger than when you entered it. Her ability to tap into and understand the affluent mindset has made Kelly America’s leading expert in selling to the millionaire market.**
She has been featured in Entrepreneur Magazine, Wall Street Journal, Fortune, Forbes, NBC, and Huffington Post among others! Kelly is a best-selling author, has shared the stage with industry legends including Tim Ferris, Jack Canfield and Brian Tracey, and was named by Seth Godin as “One of the Most Innovative Companies in America.”