Understanding Affluent Clients: The 5 Levels of Wealth
In order to understand affluent clients, and sell your coaching or consulting services them, you need to know what is actually considered affluent, and what we perceive as affluence.
“Affluent” doesn’t mean what you think—it’s far more nuanced than simply a number. Buyer behaviors are different at each level.
This matters because when you are choosing a niche of clients, their wealth indicates how they buy, what they buy and why they buy. Not everyone has the same needs, but as the wealth levels increase, the need for money decreases and other needs take precedence.
These clients are buying coaching and consulting at every level and are using strategists for health, wealth, personal development and relationships. They are also MORE open to those consultations because they are used to buying to save time and energy, to grow faster, and to access nuanced levels of performance. They see coaching as NECESSARY, not a nice to have but a have to have. They understand ROI better than anyone because they have more to gain and more to lose.
So, when someone says, “The 1%,” who do you picture?
A celebrity like Tom Cruise or Rhianna.
Elon Musk and the team on Shark Tank.
Billionaire hedge fund people.
The lady next door.
You might be surprised where the levels of wealth start. Who exactly the 1% is because we don’t always know who is considered wealthy and what levels are classified as affluent. If you are a business founder and wonder where these levels begin, what if I told you that you might be in the top 1% yourself?
We tend to think of the top 10% of earners being people we don’t know. We also prejudge most people due to signaling. This means many people who make less than $100,000 a year are actually buying logo brands to “signal,” they are rich. However, when you get on calls with any of these people, they are strapped for cash. We also prejudge our clients based on our own wealth level.
I just got off a client call, and she told me she was having difficulty selling her offers because she said they were, “expensive.”. I asked her, are they expensive? She said well, they would be expensive to me! Just because an offer seems expensive to you, it might not be to the person of affluence who would be best for the offer.
Part of attracting new clients with more money requires us to think differently.
What is expensive for someone making $70,000 a year is not expensive for the upper 10%, 5% or 1% of earners.
If someone earns $70,000 a year, someone else earns $700,000 a year, and someone else earns $7,000,000, those levels are ten times or 100 times more than $70,000.
What might be out of reach for the $70k earner could be a little stretch for the $700k earner and would be a drop in the bucket for the $700 million earner. If they took it by a percentage of income:
$70k to someone making $700 million is only 1% of their income.
$70k to someone making 700,000 dollars a year is only 10% of their income.
By contrast, if they make only $70,000 a year, a $70,000 offer will take every tiny bit of what they make.
Let’s unpack the levels of wealth so they understand them and those buyers better.
If we can give ourselves a ballpark to bat in, it is easier to hit the home run or get on base. This is not a scientific study (although I love a good data set!). Still, I have seen these wealth levels and noticed specific characteristics of the individuals at each level
Level one: $500,000 and above.
This level actually doesn't feel that “rich” to many, but it does afford options for more luxuries in life. I call this the Choice Category. They have more choices, but the world isn’t at their fingertips. They can become more financially vulnerable and start to worry about their long term wealth and being able to afford the lifestyle they desire for their entire life. At this level, people wonder what to invest to maximize future earnings and grow their net worth.
Level two: $10 million to $30 million.
The deluxe category. At this level you get access. Better experiences at higher levels of business. Also first-class flights, better accommodations, access to the best in healthcare, and lifestyle options such as homes, personal chefs, assistants, and stylists. The LOOK of wealth becomes essential. They spend money not only on experiences but also on maintaining the look of affluence to fit in with their friends at this level. Aestheticians, Botox, fillers, keeping fit, style, and homes become more important.
Sometimes, children are neglected due to the need for the parents to keep up with the appearance of wealth, working for charitable organizations, business ventures, community needs, and social obligations. (Children are sometimes sent to boarding school.) Keeping up the personal appearance takes time: a busy calendar of yoga, Pilates, strength training, fancy gym clubs. The social circle expands to include prominent figures and leaders.
Most possessions are within reach, and finding new and unique things to buy and do becomes more challenging. Desires are different and much more expansive, and they no longer worry about financial emergencies. They start to become more concerned with health and mental health. Quality of life becomes more of an issue, and discarding anything restricting good life quality. They become more open to buying time rather than scrimping to save money.
Level three is $30-200 million.
They have more than one home and are likely running multiple businesses, seeking to maximize their money on new investments and indulging in prime holidays and experiences.
A staff of people are at their fingertips. They can afford anything they wish, including private helicopters to get them to their destination, the best in cars, homes, and experiences. They can access the top of society and hobnob with celebrities, sports figures, and musicians. Most exclusive clubs in the world are open to them. Almost anything is within their reach.
Legacy becomes more important as social clout and wealth motivators fade. they start becoming much more concerned with health and living longer. At this point (depending on age,) they become very aware of their mortality and start trying to buy years back. They realize their health is the most important thing and are willing to pay almost anything to increase their healthy lifespan. Most of the people at this level would pay up to half their net worth to buy an additional 10 years of life. (If that is possible.)
Level four: a net worth of $200 million to one billion.
They control a hedge fund, venture capitalist fund, or a business. (or businesses.) Now, they can go and do anything they want and get there however they choose. they have multiple residences, vehicles, and staff all over the world. Call anyone worldwide, and they will answer their calls. Anything they desire can be arranged, from playing Golf with their favorite pro to exclusive behind-the-scenes experiences no one else can get. (a night in the Cinderella Castle at Disneyland, behind the scenes at Versailles.)
Level five: net worth of over one billion dollars.
They hold unimaginable power and wealth. An aside note: According to Forbes, there are 2755 billionaires worldwide. Combined, they have 13 trillion dollars in net worth, more than the poorest 5 billion on earth combined. (Just a note here: there are only 756 billionaires in the USA—fewer than most politicians would have them believe.)
At this point, they have enormous social clout and can, if they desire, affect social change by influencing public policy and debate. Their wealth gives them access to rooms with decision-makers, lobbyists, community leaders, and lawmakers. Their voice has weight.
They can get a call back from anyone in the world and even deeper access than before, or get support for new endeavors with a quick call. Want to start a new business? Great. Call Mark Cuban and several hedge fund managers and do an easy cap raise. A huge advantage of this level is the ability to buy time. They don’t have to wait for anything, no lines, no problem.
The prime experiences at the level are the absolute top. A golf outing with Tiger Woods, a shootaround with Lebron James, a casting call for their daughter or son, a private concert in their living room with Mary J Blige. Have Oprah over for tea. Send the jet.
Their money can change countless lives at this level and can buy impact through charity and philanthropy when they see society's needs; the only question is where to create the most significant impact.
They have difficulty with trust because they don’t know who their friends are and who is using them. Dating is difficult because they long for true emotional connection yet cannot trust that the connection is real. Often, they must rely on longer-term friendships and recommendations from people they trust before they will let anyone into their circle. The values shift from wealth and power to legacy, connection, and longevity.
As we look at the levels of wealth, there is an opportunity for sales at any level, although you might not have access to the top levels yet.
If you desire these high-net-worth clients, the question then becomes, what do I have to offer that would appeal to each of these categories of buyers?
The next step is to consider your current expertise and how it fits into a transformative experience at each level.
We often discount our own ability or wonder what we could ever teach a billionaire or even a millionaire. If you are an expert, the answer is you can teach them almost anything! How to save time and money, find new relationships, build relationships, parent better, grow as an individual, create optimal health/fitness, give them back years of quality time with their family, money mindset or investing help, or a host of other options only limited by your imagination.
