How to Market to Middle Class Millionaires

How to Market to
Middle Class Millionaires
Smart and Efficient Proves More Effective than Glossy and Expensive
By Mike Kaselnak Table of Contents
Why the Middle Class Millionaire (MCM) Market…………………………………….1
Middle Class Millionaires are Demanding…………………………………...……….1
They Can’t Hear or See You…………………………………………………………...2
Give Them What They Want…………………………………………………………...2
Traditional Marketing is Way Off Mark With MCMs………………………………….3
The 2 for 1 Pay Off………………………………………………………………………4
Effective Marketing for the MCM Market: Non-Financial Multi-Touch Marketing…5
Advisor Benefits of using the Non-Financial Multi-Touch Marketing……………….5
K&A Case Study…………………………………………………………………………6
How to Market to Middle Class Millionaires MCM
So you’ve decided to target clients with $500,000 to $7 million in investable assets. How exactly do you reach this market? What will get their attention? How will you make yourself look different from all the other advisors chasing this desirable target market? These and many other questions describe the complexities of excelling in this market place. The good news is there has been more than enough research conducted to really zero in on the most effective marketing plan to dominate the middle class millionaire market place. It is my hope that this paper leads you in the right direction. This paper’s objective is to guide you in the process of developing effective, persuasive marketing and demonstrating that the best marketing is never the most expensive marketing. Why the Middle Class Millionaire (MCM) Market
You are not the first to be interested in the MCM market (86% of financial advisors have identified the middle class millionaire with $1 million to $10 million net worth, as their “sweet spot” for their busi‐
ness)¹. Though you will have plenty of competition in this market, the good news is that there is no shortage of MCMs and there number grows daily. “Today, these people (MCM) represent 7.6% of all US house‐
holds, a figure that translates into 8.4 million middle‐class millionaires. …It is reasonable to project due to behavioral and environmental factors that the number of U.S. middle‐class millionaire households will reach a total of 20 million over the next ten years”¹. The news gets even better when you consider that most of these people are free agents. Russ Alan Prince and Lewis Schiff in research for the book, The Middle Class Millionaire: The Rise of the New Rich and How They are Transforming America, (Doubleday, 2008) found that just 14% of MCMs say they are loyal to their advisor.¹ In addition, research done by Prince & Associates in late 2008 showed that 81% of MCMs planned to take money away from their primary advisor.2 Middle Class Millionaires are Demanding
While an excellent opportunity does exist in the MCM market, you should first understand the difficul‐
ties and demands of this market before making a major marketing commitment to it. You face two major hurdles to succeeding in the MCM market place. First is the MCM themselves; who they are and how they live their lives. The second hurdle is how to get their attention. MCMs are extremely motivated and demanding people. Over 80% are business owners or run a professional practice such as a physician or attorney and they work on average 70 hours a week3. And virtually all of them are self‐made millionaires¹. MCMs do not suffer the weak lightly. The “5 Star Client Experience Survey” ( Janus Labs and Prince and Associates, 2008), found that when it comes to MCMs, investment performance is not enough to keep 1
How to Market to Middle Class Millionaires MCM
them as clients. 56.4% of the affluent investors, whose accounts had beat the market returns, still had taken assets away from their financial advisors4. Just being a good investment advisor is not enough for the average MCM. MCMs don’t expect good service, they demand it, and have little tolerance for “average” service. The “Economics of Loyalty” study ( Advisor Impact in conjunction with Vanguard, 2008) found, “Those (MCMs) that had worked with a previous wealth manager gave that manager a 6.7 out of 10 satisfac‐
tion rating before they changed, suggesting clients who rate their managers below a 7 out of 10 are at risk”.5 Returning phone calls promptly, meeting with clients regularly, picking good investments, giving gener‐
ally good overall service….is NOT good enough. Doing the ordinary is going to both cause you to lose current MCM clients and prevent you from bringing more on. However, MCMs have given us a blue‐
print on how to provide service they rank as a 10 as we’ll discuss later. They Can’t Hear or See You
Marketing to the MCM market is difficult because of their focus on success, their professions and fam‐
ily. They are very protective of their time and attention. They will not and do not “check something out”. They make immediate judgments as to whether they need something or not. You cannot woo them with promises and generalities. MCMs are hit with on average 245 ad exposures daily from TV, radio, print, internet, and direct mail).6 Your marketing has to effectively cut through the background marketing noise that they are exposed to on a daily basis or your marketing will not work. The good news is it is possible to consistently and ef‐
fectively get an MCM’s attention when you follow a few simple guidelines in your marketing. Give Them What They Want
Your success in the MCM market will be largely based on your ability to understand what they want and communicate it effectively. We found that what MCMs want from their advisor could be broken down into the 6 C’s.
Character—their advisor needs to be trustworthy Chemistry—they need to feel a connection with their advisor Caring—they need to know their advisor cares more about them, than their money Competence—their advisor must be capable Consultative—they must be treated as individuals and not as one of many However, the biggest “C”, number 6,…the characteristic that was most important was communication. As stated earlier, 56.4% of MCMs whose accounts beat the market still left their advisor—the reason given by a wide margin was lack of contact. 2
How to Market to Middle Class Millionaires MCM
While the number of contacts can vary widely from one advisor and client to another, MCM researcher Lewis Schiff found that on average 38% of MCMs communicated with advisor quarterly, 35% monthly, 14% weekly… but 90% of MCM clients said they wanted even more frequent contact.8 Keep in mind that the kind of contact they wanted was NON‐Financial. Non‐financial messages would be any message not pertaining directly to your client’s money or investments. These types of mes‐
sages could include telephone calls to check in, holiday and birthday greetings, helpful articles and hints about things other than their money… anything that would be considered friendly instead of in‐
vestment related. The reason for this is apparent when you look at the 6 C’s. Four of them are directly related to NON‐Financial contact—Character, Chemistry, Caring, and Communication. If you do communicate with an MCM about Financial issues, one thing will get their attention; the av‐
erage MCM is willing to push the limits. They will take advantage of system weaknesses and using the legal system to come out on top by “bending the rules.”3 Your marketing should be heavily weighted to contact marketing with a major emphasis on NON‐
financial messages and a minor emphasis in messages that include ways that—in their eyes—helps them to “bend the rules”. This does not mean breaking the law. What they are attracted to are techniques that may not be well known to the general public. Tax loop‐
holes “only” they can take advantage of… a unique investment technique that would give them advan‐
tages not available to others… etc. There are now some very successful systems that incorporate this type of mentality. Traditional Marketing is Way Off Mark With MCMs
Historically, advisors have used seminars, newsletters and other mechanisms to attract new clients. While these mechanisms have been very successful for the general public, they have failed to attract MCMs in any viable numbers. Because of the personality and professional makeup of the typical MCM, they will not respond to the old school type marketing. Examples: Newsletters—They are not interested in fancy looking financial newsletters chock full of financial infor‐
mation that does not pertain to them. Newsletters purchased from newsletter marketing companies while they look beautiful and professional do not work well with MCMs because they fail the 6 C’s test. MCMs want to feel like they know their advisor thus more personal newsletters are much more effec‐
tive. Lead Generation cards—No MCM will take the time to respond to lead generation when they feel they have been duped. Lead generation systems that use “official” looking envelopes or misleading “important information inside” printing on the outside of the envelope will immediately break trust and cause a permanent fracture in any future business with the advisor that sent it out. Advisors must 3
How to Market to Middle Class Millionaires MCM
vigorously avoid these types of marketing for MCMs. Slam marketing—MCMS will rarely respond to the first piece you send out. Any marketing that relies on just a single marketing piece will likely fail. MCMs are cautious with their time and money and gen‐
erally will look for consistency in advisor marketing before making the decision to contact the advisor. The number of contacts needed can range from 3 to 18. It is therefore necessary to create a marketing plan that includes short, medium and long term view points, with an eye to cost efficiency. The 2 for 1 Pay Off
By focusing on what exactly it is that MCMs want, your practice will experience powerful growth in two ways.  First, you will be able to build loyalty with your current clientele and all the benefits it yields (see Table 1 below).  Second, you will be able to capitalize on the average financial advisor’s Achilles tendon. Contact…or more accurately, lack of Contact. More than anything else, MCMs want contact. Contact about more than just financial matters. By concentrating on giving prospective MCMs (your competitor’s clients) this contact, you will be able to harvest great numbers of your competitor’s clients to your own practice. You will be aided by the fact that very few financial advisors either know or act upon these facts. A study of 512 advisors by CEG Worldwide found that 4 out of 5 advisors believe 75% or more of their affluent clients are loyal9. When the MCM clients were asked about their loyalty, only 13.8% identified themselves as loyal7; a huge discrepancy between advisor’s beliefs and actuality. In a study of MCMs, David A. Geracioti , Russ Alan Prince in “Cultivating the Middle Class Million‐
aire” (2005) found that the average Advisor contact on Non‐Investment Matters, during a 12 month period for loyal clients was –24.1 contacts. The average Advisor contact on Non‐Investment Matters during a 12 month period for satisfied clients was – 2.1 contacts.7 The benefits of attracting MCM clients that are loyal are across the board. By focusing your marketing both on finding new MCMs and nurturing your current MCM clients you could expect to see extensive asset and client base growth based on data in Table 1. Table 1 Loyal MCMs Moderately Satisfied MCMs 91.7% 13% $376,000 $17,000 Qualified Referrals Given 11.8 0.1 Non‐investment products purchased (life insur‐
ance, planning fees, etc.) 7 $119,000 $9,000 Percentage who say they are likely to leave advi‐
sor over next two years7 0% 21.2% 4
Invested new money with their advisor 7
Amount of new money invested 7
Numbers averaged over 12 months 4
How to Market to Middle Class Millionaires MCM
Effective Marketing for the MCM Market:
Non-Financial Multi-Touch Marketing
The benefits of Non‐Financial Multi‐Touch Marketing—marketing that emphasizes non‐financial mes‐
sages delivered in an inexpensive multi‐touch manner—should cause you to reconsider traditional fi‐
nancial marketing. Non‐Financial Multi‐Touch Marketing is able to generate increasing numbers of high quality MCM clients very cost effectively. It is the new road to growing the MCM focused advisor’s practice. Utilizing the traditional methods of seminar and lead generation marketing (while still fine for pros‐
pecting for the average investor) has seen a marked decrease in effectiveness for the investor with $500,000 to $7 million in assets. However, Non‐Financial Multi‐Touch Marketing is shown to produce higher quality and higher number of MCM prospects at a lower marketing cost. It does this by both overcoming the MCMs’ major objections and by giving them what they want. Com‐
munication that contains as many of Prince and Schiff’s “C’s“ as possible: Character— messages that prove they are trustworthy Chemistry— messages that create a connection with the advisor Caring— messages that show you care more about them, than their money Competence— messages that prove your expertise Consultative— messages that treat them as individuals and not as one of many By approaching MCMs with this type of marketing you are able to cut through the noise of aggressive marketing they experience everyday and get them to see and hear you and your message. Once you have their attention you can then use a more direct financial message. That message must be informa‐
tion that appears to help them take advantage of investment, legal or tax system weaknesses and lev‐
eraging those weaknesses to come out on top. This is best achieved by mentioning a technique that is unique and unusual. This “technique” message is easy to create by using the myriad of tax, invest‐
ment and legal planning and investing techniques available to the informed advisor today. The formula behind Non‐Financial Multi‐Touch Marketing is: Between 5 to 10 Non‐Financial Contacts → Next send a financial message giving them an idea that is unique and unusual technique → Ask for appointment → Repeat as needed. Advisor Benefits of using the Non-Financial Multi-Touch Marketing
The Non‐Financial Multi‐Touch approach provides advisors with significant benefits. By leveraging this approach to reaching MCMs, you can:  Create a completely integrated, efficient marketing plan keeping your appointment calen‐
dar filled without the “feast or famine” syndrome of typical financial marketing.
 Install systems that create Short, Medium, and Long term plans giving you the ability to focus on your business growth by building an ever increasing stream of high quality pros‐
How to Market to Middle Class Millionaires MCM
pects. Instead of the start and stop mentality of the traditional seminar and lead genera‐
tion model, every penny spent builds on the last penny and compounds your marketing investment.
 Customize your message to your technical strengths—You don’t need to worry about the one‐size fits all marketing that brings in lower quality prospects.  Go heavy on the Non‐Financial messages—Give MCMs what they want and be the only advisor out there doing it, differentiating yourself from the competition while ingratiating yourself to your MCM market  Cost efficient—By marketing smart, you are able to reduce your overall marketing costs while at the same time increasing your revenues, thus exploding your bottom line profits. Many advisors focusing on the MCM market place have been able to create significant in‐roads within months using Non‐Financial Multi‐Touch approach. Their return‐on‐investment for their marketing has many times doubled or even tripled. Let’s take a look at how this type of marketing might work. Imagine significantly reducing the financial risk entailed in conducting a seminar or traditional market‐
ing methods, while increasing your income ten‐fold by using Non‐Financial Multi‐touch marketing. One real example of such marketing follows: K&A Case Study
In the midst of this marketing downturn, one advisor bucked the conventional wisdom for financial advisor marketing and went from spending $5,500 per seminar that would generate $15,000 in reve‐
nue to spending $1,750 and generating $72,960 in profits. Campaign:
“K&A” office manager, Melissa, knew that K&A had to move away from seminars due to the fall off in response and quality of attendees. Both had become an increasing problem over the previous two years. She had to address the additional problem of the coming summer months when prospecting typically became even more difficult. She had recently read various articles about how to market to Middle Class Millionaires, and she no‐
ticed the fact that the number 1 reason clients left their current advisor was lack of contact. She also realized that over 90% of their new clients had come from other advisors, so she was determined to put together a campaign that capitalized on K&A’s competitor’s weak spot ‐ they were not contacting their clients enough. She knew this was a problem as most new clients did mention that their advisor had not contacted them enough. Step #1 – Determine Best Method of Contact Melissa’s choices for contacting prospects were: Telemarketing – among the drawbacks were the “do not call” list, prospect’s dislike for cold calls and the firm’s advisors reluctance to cold call. 6
How to Market to Middle Class Millionaires MCM
Newsletters – K&A had used newsletters for years, and while they ended up generating enough business to pay for themselves, they certainly were not a money maker. Direct Mail – Direct mail solicitation outlining K&A’s offers and abilities had been tried before with near zero success. A follow‐up by Melissa had determined that very few of the pieces mailed were even read. Handwritten Notes – She had the idea of utilizing handwritten notes after reading a marketing blog about contact and Middle Class Millionaires. She decided to move forward with the handwritten note campaign. Step #2 – Choosing Which Handwritten Note Technology Firm to Work With Melissa knew, the major hurdle to get over with this type of marketing, was to get the principals of the firm to agree to write hundreds of handwritten notes. She overcame this problem with the help of technology. There are several software companies that offer solutions to businesses seeking to send out multiple handwritten notes. Upon looking at several options, she settled on It allowed the principals of the firm to create fonts based on their handwriting. The font created a very realistic replication of their handwriting and allowed for easy mail merging. Step #3 – Putting the Campaign Together It was decided to use what is called a “10:1 Ratio” that marketing expert Mike Kaselnak of recommends. Simply put, a prospect would be sent 10 rapport building, Non‐
Financial cards, to be followed up with one financial offer after the 10th card was sent. At first, the principals at K&A were concerned with the 10 rapport building, Non‐Financial cards. They felt they were wasting money on cards that had no call to action. They agreed to move forward with a test of 250 prospects before adopting a larger effort. They would also back down from 2Objects recommended use of 10 cards before an offer was made, and instead make a financial offer after the 5th card. They began the test in the middle of February. These included both handwritten (using the Quantum Enterprises technology) postcards and typed articles with a personal, handwritten message at the top (again using the handwritten font). The financial offer was also “handwritten”. Results:
The sequential 6 note campaign was the highest ROI marketing lead generation and marketing cam‐
paign that K&A had experienced in its 15 year existence…by almost 4 times! The campaign, using just a 250 name prospecting list generated 31 phone calls for over a 12% re‐
sponse rate over the entire campaign. K&A’s previous response average on mailings was well below 7
How to Market to Middle Class Millionaires MCM
1%. The total campaign cost $1,750. This included the 6 mailings to the 250 qualified prospect list. Track‐
ing the post‐campaign sales to the 250 prospects during the 3 months following, Melissa found that the campaign generated $1,296,000 in new money and $72,960 in profits with several cases still pend‐
ing. The 6 note campaign had also helped to increase seminar attendance over the next 6 months. Melissa found that by inviting the 250 prospects from the 6 note campaign, as well as the general public to K&A’s seminars, their seminar attendance received a huge boost. They were getting a 5% response rate from the 250, while the general public response rate remained below 1%. “You know people are hit with so many advertising offers. I believed that getting to them on a more personal level would succeed and I believe the numbers speak for themselves,” said Melissa. Results Snapshot: Highest ROI marketing campaign in company’s 15 year history ‐ beat past high by 4 times Used a prospect list of just 250 names ‐ yet it generated 31 phone calls The handwritten campaign averaged a 12% response rate ‐ previous average was below 1% 6 handwritten message campaign to 250 prospects cost $1,750 vs. 1 seminar for $5,500 Campaign generated $1,296,000 in new money Campaign profit totaled $72,960 in profits ‐ with several cases pending Summary
Cracking the Middle Class Millionaire market may require more patience and more contact than many advisors are used to, but it is a market well worth pursuing. You must be willing to contact MCM’s mul‐
tiple times with NON‐financial messages that show you care about more than just their money…before you make a financial offer. But by following this methodology, you will find the MCM much more re‐
ceptive and responsive to your financial offer. For more information or questions on how to grow your practice by cracking the Middle Class Million‐
aire market place please contact __________________ (BD expert) at <phone # and email> or Mike Kaselnak at 2Objects at <phone # and email>. 8
How to Market to Middle Class Millionaires MCM
1- Shaw Grove, Hannah & Prince, Russ Alan. “Jump On The Bandwagon”. Financial Advisor Magazine, April 2008. http://
2- Abram, P. (2010, March 1) “Conscious Retention”. Research Magazine. Retrieved August 20, 2010, from http://
3- Schiff, L. (2008, March 26). “Middle-Class Millionaires: Your Questions Answered”. Retrieved August 25, 2010, from http://
4- “5-Star Client Experience Survey”. Janus Labs. Source: Prince & Associates, 2006
5- “Economics of Loyalty” study conducted by Advisor Impact
6- Media Guru (1997, March 19). The Media Grur Answers. Telmar Group Inc. Retrieved August 20, 2010, from http://
7- Geracioti, David & Prince, Russ Alan (2005). “Cultivating the Middle-Class Millionaire”. Taken from Bowne, John & Kurey,
Peter. “Shattering Illusions of Loyalty”. On Wall Street, April 2006
8- Asci, S. (2008, May 12). “Millionaires who use advisers have a more diverse portfolio, survey finds”. InvestmentNews. Retrieved August 25, 2010, from
9- CEG Worldwide study conducted by CEG Worldwide Senior Managing Principal Russ Alan Prince. Take from Bowne, John
& Kurey, Peter. “Shattering Illusions of Loyalty”. On Wall Street, April 2006/Volumne 16, No. 4.