The Millionaire Next Door

Marketing to the Affluent in Small Towns

In Stop Acting Rich, I mentioned that many farmers are wealthy because they adhere to the basic rule for building wealth: whatever your income is, live below your means.  In spite of being an affluent segment, it receives very little press coverage.  I also briefly profiled a company that was one of my first clients in the investment industry.   Initially, it operated only in the Midwest, and its wealthiest clients were farmers.  Today it has offices throughout America.

A typical office was staffed by one registered representative and one assistant.  At the time, all of the company’s offices were strategically located in small towns.  Its strategy of becoming a dominant supplier of investment products within a narrowly defined geographical area proved extremely successful.  . . .clients . . . a high concentration of frugal, low profile farmers and ranchers, owners of small businesses, teachers and professors and auctioneers.

One of the company’s cardinal rules was never to place a registered representative in a town in which he/she had any previous or current connections (friends, relatives, etc).  Over time the “stranger in a small town” policy worked very well because clients felt that their financial situations would not be compomised through local channels of communication.  But even so, it typically took a considerable effort for a stranger to build an investment consulting business in small town USA.  For example, “Rojar” whom I profiled told me that he had to introduce himself in person to more than 1,000 prospects before he landed his first client.  Look at this from a different angle.  The equivalent of 1,000 employers turned down “Rojar’s” application for the position of investment advisor before he landed his first job.  He viewed each of the prospects who turned him down as a step closer to success.  “Rojar” became a mega producer and ultimately at age 30 the head of marketing for the whole firm. 

He, like his colleagues, shared the same value system  as did his small town affluent clients: never display considerable wealth through consumption.  Becoming financially independent is its own trophy, medal of honor.


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