For a spa dealer in the D.C. area, life is good. According to the U.S. Census Bureau, of the top 10 wealthiest counties in the country, five are found in the suburbs of America's capital (See a full list in the sidebar on the right.). With plenty of government jobs, and commanding salaries to go with them, pockets are considerably deeper — and that means more disposable income to go toward luxury products like, say, a hot tub.
Top 15 Wealthiest Counties
Ranked by median household income in 2014. Results provided by the U.S. Census Bureau.
1. Falls Church City, Va. | $125,635
Joe Mahoney, president of Capital Hot Tubs & Saunas, knows this personally. His stores are located in Fairfax, Va., and Clarksburg, Md. — what you might call the sweet spot, as both are just outside downtown D.C., making them prime spots for wealthier customers.
"It is different here because if you get two people who work for the government and they're both making $175,000 a year, then they're doing petty well," he says. "There are people here who are super wealthy, and some you'd recognize their name."
However, simply operating in a wealthy area doesn't mean sales come easy. With a different market comes a different set of expectations, and consequently, a different sales strategy. Here, Mahoney and other dealers discuss their experience selling to a well-to-do clientele.
Large Wallets, Same Goals
In cities like Washington, D.C., and San Francisco, six-figure salaries are commonplace. But as paychecks rise, so does the cost of living. Everything, from a house to a cup of coffee, costs more in these areas than they do in middle-income cities.
"The housing costs more and they have their kids in private schools and things like that," Mahoney says. "So although they make more, they also spend more."
Because of this, Mahoney finds there are two seemingly contradictory forces at work when selling to this market: While wealthier customers do have more money to spend, they also want to make sure they're not spending more than they have to.
"I think what happens a lot of the time is there are businesses that will try to get rich off of one person," Mahoney says. "They'll charge him more than anybody else because they know who he is or they know he's making a lot of money. Instead of it being $12,000, all of a sudden it's $17,000."
Mahoney cautions against this not only because it's bad business, but also because spa purchases are traditionally well researched before arrival at the store. Affluent customers are no exception; they just have different ways of doing it.
"They might go to their office and tell their assistant, 'Hey, look up the price of this for me and tell me what the going rate is.' If we're out of whack, they'll go out of their way to not do business with you. I've had people who are wealthy come to me and say, 'Look, this other guy wanted to charge me this amount, and I'll never do business with him again.'"
In Montana, Mountain Hot Tubs' three retail locations bridge the gamut of income levels. But according to owner Kelly King, the flagship location in Bozeman does especially well due to its location on the skirts of Big Sky, a resort area that attracts its fair share of wealthy vacationers — many of whom own second homes in need of hot tubs or maintenance for the units they have.
For King, it's not the money that makes these customers different; it's about working with different personalities.
"You might have a CEO come in with a CEO's mentality, and you have to treat that personality differently," he says. "You definitely have to listen very carefully and let them know you're listening very carefully. You can't really kick into salesman mode where you're going to take control and start demoing things that they don't care about. You have to be really careful on how much you try to lead them into an area; you need to let them feel like they're leading you.
"I ask their opinions a lot: 'What do you think of this?' 'Let me ask your opinion on that.' And then re-confirming, 'Did I explain that well?'
Mahoney finds a big part of the sales interaction involves shifting your perspective and resisting the personal and professional inclination to think about what features can be taken off a sale.
"When most people are looking at something, they have to budget for it. They have to figure out when it's a good time to buy it, and they have to save for it," Mahoney says. "There's a little less of that for someone who makes more money, and we have to be ready for it. Because they're ready to spend more than other people, and if we can show them something they want, they're not necessarily interested in saving money."
Convenience is King
Perhaps the biggest difference when working with a wealthy customer is realizing their priorities are different.
"They're willing to trade money for time," Mahoney says. "They have extra income, but they don't have more time than anybody else. So their free time is very valuable to them."
Anything you as a dealer can do to expedite the process will go a long way to winning their business. At AJ Spas & Hot Tubs (Patchogue, N.Y.), president Greg Jost says cabinet and spa color samples are popular with prospective clients, as they help cut down on repeat visits to the store and facilitate the selection process.
"We do have things available we can send customers, or we can let them take home, too, so they can put it next to their patio or get with their architect or landscape designer and try to match everything the way they like it," he says.
And while pool and spa pros are always ready to pick up the phone and dial up a prospect, the affluent market prefers email, and lots of it.
"We do everything through email so they know when we're coming," Jost says. "We use a program so they get an email when we're on our way, and they get an email when the job is done. Most of the higher-end people like that because then they don't have to deal with anybody."
Service on a Platter
If convenience is important throughout the sales process, it's nothing but essential for post-sale maintenance.
"When somebody who makes a lot calls us and says, 'My hot tub's not working,' they don't want us to tell them how to fix it. They just want us to come out and fix it," Mahoney says.
For this reason, Capital Hot Tubs & Saunas developed its hot tub valet service, a comprehensive package that includes water maintenance, filter cleanings, vacuuming, diagnostic checkups, water drain/refills and more. Interested customers simply sign an annual contract and choose from six levels of service, from seasonal service to a weekly gold package. After that, they don't have to bat an eye at anything related to their hot tub.
While the cost of this service can be tough for middle-income Americans to swallow — the gold package is $299 a month — Mahoney finds that for the right customer, it's entirely worthwhile.
"For my income, or for my salesperson's income, we would never spend $300 for someone to come out and change the water for our hot tub. That would be ridiculous for us," Mahoney says. "But for somebody that has a high income, they might look at that and go, 'Oh, that saves me three hours. That's perfectly reasonable to me.' I really am very thankful for the people who will do that because that helps keep us in business."
Through Thick and Thin
According to Mahoney, the biggest upside to working in a wealthy area of the country isn't more sales, it's repeat sales from customers in good times and bad. When the economy turned in 2008, with dealers nationwide seeing sales dry up, Mahoney noticed an interesting phenomenon: a select few customers making relatively frequent purchases in a short period of time.
"Rich people, they work very hard, and a lot of times they own a business. They want to help out fellow businesspeople. I had one guy who bought four hot tubs in three years from me. He said, 'You just take that other one and see if you can resell it. I just want a new one.' At the time, I didn't think about it much, but I came to realize they were really saying, 'Look, let me see what we can do to help you out.'"
"They are very loyal customers, and they're very generous," he says. "Sometimes they get a bad name; there are some people that are jealous of a wealthy person, but it's incredible what they'll do."
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