[Cover Story] Right on the Money

Follow the money. It sounds like good business, especially since “wealthier people are still spending money on services such as pest control,” said Tucson, Ariz.-based Truly Nolen President Scott Nolen.
From pool and landscape services to plumbers, painters and pest management, a wealthy consumer relies on about 25 home service suppliers to care for her home, said Milton Pedraza, CEO of The Luxury Institute in New York, N.Y.

She’s also not as quick to shop around, said Lynne Frederick, vice president of marketing for Massey Services in Orlando. High-income homeowners “can give you more profit over time,” even though the price they pay for pest management doesn’t always compensate for their bigger houses, said Nolen.

They’re a “critical part of our audience,” said Frederick, and represent a “big opportunity for us.”

Who are These People? Affluent consumers are a diverse, highly educated group, according to Dr. Edward Mazze, distinguished university professor of business administration at the University of Rhode Island and co-author of “The Affluent Consumer: Marketing and Selling the Luxury Lifestyle” (Praeger Publishers, 2006) with Ronald Michman.

And there are a lot of them. According to the 2008 Ipsos Mendelsohn Affluent Survey, an estimated 2.7 million households have liquid assets of $1 million or more and 2.5 million households have incomes of $250,000+. More than 1 million households have both. Twenty percent of households with incomes of $100,000 and more account for 50 percent of all income in the United States, the survey reported.

Pest management professionals aren’t surprised. A large portion of Massey Services’ residential clients have household incomes of $150,000 and higher. The same is true at Horizon Pest Control in Midland Park, N.J., said President Bernie Holst Jr. Homeowners with incomes of $250,000 and more make up one of Truly Nolen’s most important group of customers, said Nolen.

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MAKING MONEY VIA WORD OF MOUTH

Nothing beats word of mouth in affluent circles. Using the right media, message and tactics can help get consumers chatting.

The affluent take pride in their purchasing expertise and they value firms that provide information useful in making purchase decisions, according to “The Affluent Consumer: Marketing and Selling the Luxury Lifestyle” (Praeger Publishers, 2006) by Dr. Edward Mazze and Ronald Michman.

Most go online to research suppliers and services. The affluent are “completely Internet savvy and mobile,” said Milton Pedraza, CEO of the Luxury Institute. He suggested professionals focus on search engine optimization — “You need to come up first” in Internet searches — and encourage customers to rate your service on online referral sites like Angie’s List.

Beside the Internet, the wealthy are avid consumers of cable TV (news, sports, history, science, arts, and home and garden) and specialty magazines, according to the 2008 Ipsos Mendelsohn Affluent Survey. Massey Services Marketing Vice President Lynne Frederick thoroughly researches this group’s media habits to determine the mix of TV, radio, Yellow Pages, direct response, Internet, and print ads used to reach this market.

Scott Nolen, president of Truly Nolen, says his firm advertises on billboards (when they’re available) along routes in and out of affluent ZIP codes. Ads in local newspapers are effective for reaching well-to-do families with kids, said Pedraza, and direct mail “can make a big difference.”

Tom Olson, co-owner of the Mosquito Squad franchise in Minnesota, uses high-end co-op direct mail, the glossy four-color postcards that arrive in a cellophane wrap. It’s a “cost-effective way to reach 20,000 to 30,000 people at a time,” he explained. Just don’t offer this group coupons. They know “the best don’t necessarily discount,” said Pedraza.

A personalized message works best. Instead of making generic “empty promises to the whole world” in his firm’s direct mail pieces, Truly Nolen sometimes puts the technician’s name on front so homeowners know, “This is me. I service your neighborhood.”

New TV spots from Massey Services highlight the relationship customers have with “My Guy,” their trusted technician who takes extra steps to ensure a pest-free environment, said Marketing Manager Jenny Haget.

Olson has hand-addressed some direct response pieces and added personalized notes to get through the “first screening.”

Don’t focus on price or even the service, itself. Nobody actually wants a mosquito misting system or a barrier treatment, explained Olson. “They want to enjoy their backyards.” He paints the “nightmare of being eaten alive” and not being able to enjoy their investment, and gives consumers the “dream” of having a mosquito-free evening outdoors with friends.

The message of simplifying one’s life resonates, said Nolen, especially when it refers to a service that can be performed outside the home most of the time.

The well-heeled also pay attention to green. The environmental movement among affluent consumers is a trend, not a fad, according to “The Affluent Consumer.”

“Environmental issues are very, very important,” said Mazze. Frederick agreed. Being green is how Massey Services has done business for years, but this approach “does resonate with that audience even more.”

Whatever your message, make sure it clearly communicates what you do and how you do it, said Frederick.

And look the part. Shiny, attractive vehicles and clean uniforms say “this is successful pest control, not cheap pest control,” said Nolen. Massey Services team members wear name badges, ties and button down shirts, and this uniform is displayed prominently in the company’s advertising so customers know what to expect, said Haget.

“If you’re going to play this game, you have to play it well and do it right,” said Olson, who’s always surprised by companies that finally get a foot in the door only to show up looking unprofessional. “I watch people do it every day.”

Community involvement also pays off. Massey Services has long supported education, the arts and health care: Massey team members serve on charitable boards, the company supports Junior Achievement and United Cerebral Palsy, participates in walks and fundraisers and more. “That type of community citizenship is quickly picked up by this market group,” said Mazze.

All these efforts build a company’s brand, which communicates what a company stands for and conveys “confidence that there’s an outstanding service that goes with it,” Frederick explained.

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Dual-income households and increasing numbers of women, African-Americans, Hispanics and Asians are expanding the market, Mazze said.

Well-Heeled Expectations. According to Pedraza, affluent consumers “first and foremost” require expertise. “You need to be a neurosurgeon at whatever you do,” he said. “You need to be a true expert, and demonstrably so.” Mazze agreed. “Good service is critical. High quality is an absolute.”

The wealthy expect service providers to be “trustworthy and honest,” Pedraza said. This means being “transparent in your fees.” Pricing the same service differently for higher-income neighborhoods is “unjustifiable,” said Tom Olson, co-owner of the Mosquito Squad franchise in Minnesota. “It doesn’t matter what your checkbook looks like, you don’t want to be taken advantage of.” This group also wants guaranteed results. “That’s where I think a lot of providers for the home fall down,” said Pedraza.

Price is important, too, but it’s not the main priority, he added. “Everybody shops price to a degree, but everybody wants better than average service and service providers,” Nolen said. Truly Nolen offers both basic and upgraded services; many affluent customers choose the upgrade because they recognize the value of those additional dollars spent, he said.

This group wants a fair price that’s equal to the value of the service they’re receiving, said Mazze. If professionals can communicate that value, affluent consumers are “willing to pay for that expectation,” said Holst.

Ninety percent of the wealthy are self-made, Pedraza. “They know what it’s like to not have money and so they spend their money wisely.”

High-income consumers seek a “soft, safe, social and secure way of life,” Mazze said. They want a life without hassle that provides safeguards for the family, and they don’t want to stand out in a crowd for being different, he explained.

Nolen sees this when talking to customers living in upscale neighborhoods. No one wants to be that neighbor whose house has spider webs or rodent holes. “You feel good when you know you’re not the only one using the service,” explained Mazze. TruGreen, he pointed out, promotes this feeling by posting small signs on lawns after each service.

The affluent also put a high value on their time, said Mazze. They expect professionals to show up on time for appointments and call when promised.

Talk of the Town. In this market, word-of-mouth rules. “That’s the best form of advertising you can get,” said Olson. Holst, who’s been in business 39 years, now counts clients’ children among his customers mainly due to word-of-mouth.

To encourage clients to talk about Truly Nolen, Scott Nolen said the company is considering a program in which technicians would leave behind a customized package of coffee and ask customers to mention the firm while sharing the beverage with neighbors.

The biggest hurdle is getting your foot in the door, Olson said, who offers automatic mosquito misting systems and barrier treatments. He’s found forming alliances and sharing leads with people already serving these clients, like landscape and pool designers, works well. “Reputation is everything,” Pedraza said. Home service providers usually have opinions of each other. “Everybody knows who’s good and who’s bad in a small world.”

Especially when customer driven, online referral services are just a click away. The better ones, like Angie’s List, don’t allow companies to buy their way in. It’s easy for prospective clients to identify the best providers, those considered mediocre, and ones who “frankly are dishonest,” said Pedraza. Wealthy people understand rating systems can make a difference in “keeping the market honest.”

PMPs should expect to be rated as a condition of getting the job. Pedraza hired a painter for a $30,000 project and told him he’d be rated online once finished. “We made it clear, and he delivered,” he said. And if people lose confidence in a provider, they really talk, he explained. “They’ll tell everyone it didn’t happen for them because they love to tell war stories.”

Companies need enough consumers reviewing them to make it credible, he added. The more others have to say positively about your service “without you having to say it yourself,” the more appealing it becomes to the affluent, Pedraza explained.

Built to Deliver. Companies must be set up to handle affluent consumers’ demands. Horizon Pest Control, known for quality service and a fast response, is structured from a financial and staffing standpoint to meet those expectations, said Holst. “There’s no way a company can provide the level of service that affluent customers expect at a rock bottom price.”

Horizon customers never speak to an answering machine since the reason they’re likely calling is to get help now, explained Holst. Customer service representatives have authority to make routing and scheduling changes to get technicians onsite immediately, regardless if it’s a current, former or prospective client.

Homeowners see the value of Horizon’s service. They may have been paying a cheaper price elsewhere, but when they needed help the other firm couldn’t get there fast enough, said Holst. Horizon could. “Therein lies the value point.”

It may take longer to earn this group’s trust, said Olson, but “once you do they’re very happy to find somebody who takes care of them properly.”

The author is a frequent contributor to PCT. She can be reached at anagro@giemedia.com.