I’ve been giving some thought to the drivers of demand. At Bigelow for example, is our practice driven by industrial demand or consumer demand? I say it is (counter-intuitively perhaps) consumer demand by the Entrepreneur Owner Managers. Seventy percent of the American economy is driven by consumers, yet there is no such thing as the average consumer. Consumer spending may drive the economy, but what drives consumer spending is misunderstood. Instead of dividing people up by wealth or demographics (or worse, combining them to get to an average consumer or normal consumer), I believe it is actually values and beliefs that determine how someone spends or invests money.
There are two distinct groups when it comes to consumer spending. One group, driven almost exclusively by the “best deal,” are cautious spenders, especially in tough economic times. The second group, who author Chris Norton terms the “New Economic Order,” are driven by a search for the unique, the individual, and the extraordinary in the things they buy or invest in. NEOs are only twenty four percent of the population, but account for sixty percent of discretionary spending. They are from all income levels and every generation. They are the ones who drive much or all of the economic and entrepreneurial success. I think our clients are from both camps—traditional and NEO, but we do best, and have targeted our strategy towards, the NEO who want a boutique experience. Where we err is when we squander our finite resources on consumers who want a traditional experience (low price) or a safe experience (legacy, logo, vertical industry) firm. Try thinking about the clients or customers you have brought the greatest value to and whom you have found most rewarding and try to classify them in your own mind.