Who are the HENRYs and why do you need to understand them? HENRY stands for High Earning, Not Rich Yet. HENRYs have household incomes between $100,000 and $250,000 but haven’t built wealth. Income refers to how much money comes into the bank. Wealth refers to how much money stays in the bank. Eventually HENRYs will be wealthy but they have a long way to go.
Many HENRYs are Millennials with advanced degrees and good paying jobs but their expenses are also high. Paying back college loans can eat up a substantial chunk of their paycheck. High-paying jobs are often in locations like New York or Silicon Valley where housing is expensive. A $100,000 income in most parts of the US will buy a nice house and a comfortable lifestyle but in the high rent areas, that same income will get a small studio apartment and a struggle to make ends meet.
A different mindset
HENRYs are not just about earnings and potential, they have a different outlook on what money can provide for them. They value experiences over possessions, spending more money on travel and adventure than luxury items. Yet they understand and appreciate quality products. A status symbol has a different meaning. Rather than buying a Rolex or Patek to show off how much they earn, a low to mid-price rugged sports watch will give them the bragging rights of an active lifestyle.
Marketing to HENRYs takes a unique blend of two opposite approaches. Traditional luxury marketing based on status brands will miss the mark, but a focus on high quality and functional luxury will draw them in. At the same time, take a lesson from mass-marketing to point out the value proposition of a product. A Henry is turned off by cheap, low-quality items but won’t want to spend extra for an empty bit of status. Given a choice of “Good,” “Very Good” or “Best-of-the Best,” they will most likely take the middle “Very Good” item as long as it provides quality and value. Why buy a $500 purse that holds nothing when a $100 purse is perfectly capable to hold the remaining $400?
The importance of service
HENRYs have the expertise and confidence to buy anything they want online and for many products that will be their point of purchase. But for some things of a more personal nature, like jewellery and watches, the buying experience takes on a greater importance. Don’t base a sales pitch on the status of ownership. They have already researched like crazy and have a good idea of what they want. Point out the quality features that will enhance their life experiences and sell them on how your excellent service and after-sale care will take the worry out of their lives.
Most HENRYs eventually will become wealthy with enough disposable income to purchase high-end goods. Offer a generous trade-up policy with all purchases, especially jewellery and diamonds. Right now, they may prefer a high quality ½ carat diamond over a larger lower-quality stone but at some point they will be in the market for a 2- or 5-carat diamond of similar high quality. If you allow them to recover the value of their initial purchase, they will feel good about moving up to a bigger diamond in your store.
Cultivating HENRYs will take effort, but remember, their future holds tremendous potential for your future so they are worth pursuing.