Industry Research

How Are The Rich Spending Money?

Posted on November 4, 2009 by LCT Staff - Also by this author - About the author

TINTON FALLS, N.J. — America's wealthiest citizens might not be feeling the pain of the slow economy in their back pockets, but that doesn't mean they haven't altered their spending habits.

Still Spending On 'Essentials'

The fundamental difference between the rich and not-so-rich is that cutbacks for the former are generally voluntary, not mandatory. Chances are, those among the wealthiest 10% of the U.S. population weren't directly affected by the sub prime crisis, for example. That doesn't mean they're spending like crazy during the downturn, but they're not slowing down all that much, either.

What do wealthy folks deem necessary? Travel, for one. In the American Affluence Research Center's survey, 61% of participants said they plan to spend the same amount of money on travel around the U.S. as they did last year, and 26% plan to spend more. "If they are cutting back, it's on the number of days traveling and daily expenditures, not the quality of hotel or timeshare," the report states.

The good news…

My Redbank Limo clients are not the ones most affected by the economic slowdown. The Airport Shuttle Bus travelers who are watching every penny are choosing “the cheapest” way to the airport. They are the ones who will be cutting back in every one of their purchases.

Our client chooses to spend for premium service. Picture for a moment what you would want if you were an executive who is used to traveling in the front, first class section of the plane. He/she also stays at the Four Seasons or other top hotels. He/she dines at the best restaurants. And primarily they are able to make choices to spend at these levels due to their income level and/or that their company is picking up the expenses.

Why do I mention this? We see that our client is accustomed to the finer levels of service. They know the difference between great, mediocre, or bad service. Being that they have a choice of whom they use for their limousine service, it makes sense that they will choose the company and people who treat them best.

What you can do

Do everything better! That means the little things. Recently we have started using a vehicle checklist to maintain the same consistent appearance of the vehicles each and every time. One thing the premium customer expects is consistency. If one time the car is clean and the next time it isn’t, the service level becomes hit or miss. That does not create any reason to become a repeat customer. Why do you go to the same restaurant time and time again? It is because you know what to expect. If the food is great one time but poor the next time, you probably won’t consistently go back.

Marketing

As we market to our target client, we are sending out a mailing to every home in Rumson, Fair Haven, and Little Silver that has a traveler who has bought four or more airline tickets in the last 12 months. We are advertising in The Two River Times, which the same group reads. We are starting advertising at the Red Bank YMCA, where Red Bank Limo banners will be displayed at the facility and where the same groups and families go.

Online reservations

Our new reservation system allows our travelers to make their reservations online in real time. Most people make their airline reservations online. Now we offer that too. Encourage our customers to use this easy system. The feedback I have received about it has been overwhelmingly great.

Service

It’s the little things that matter. Are we showing up on-time every time? That means being at a client’s home 5–10 minutes before the scheduled pick-up time. Are we monitoring every flight and allowing enough time to get to the airport before the flight arrives or are we gambling that we “should” make it on time? As a premium traveler, how many times would you wait and continue to use the same limousine service if every time you arrived you had to wait for the car that was late? Are we introducing ourselves by name and mentioning the customer name three times along the way?

To summarize, there will always be clients needing to get to the airport and their meetings with luxury limousine service. The difference between building loyal repeat customers and one-shot shoppers is the level of service they receive. Everything we do is aimed to increase the number of repeat trips and the amount of gratuities for each trip.

Source: Bill Atkins, owner, Red Bank Limo, Tinton Falls, N.J.

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