We’re always looking to define and segment our audience so that we can better understand and target customers. Think YUPPIES (Young Urban Professionals), DINKS (Double Income No Kids), MARPIES (Middle Aged Rural Professionals), YUMMIES (Young Upwardly Mobile Mommies), MOBYs (Mommy Older, Baby Younger) and more.
Now welcome the HENRYs — High Earners Not Rich Yet. It’s a name that Fortune magazine coined back in 2003, and today stands for a fast-growing audience that are in high-paying jobs and increasingly looking to experience luxury goods and services.
In an age when the gap between the haves and the have-nots is getting wider, HENRYs have an annual household income between $100,000 and $250,000 and fit between the middle class (and its dwindling discretionary income) and the truly affluent. The audience encompasses all ages, but not surprisingly includes a significant number of Millennials who have benefited from high-paying jobs in technology and other in-demand fields.
According to a report from Unity Marketing, the number of households qualifying as HENRYs increased by 11% between 2010 and 2013. And, a Bain & Company study found that there are 10 times as many HENRYs entering the market each year than there are super-affluent customers. It’s estimated that there are 22.5 million HENRYs in the U.S. and, just as significantly, they are an emerging segment in China and other parts of the world.
The size and buying power of this audience makes it a potentially lucrative target for everyone in the travel business, plus there’s the added benefit that some portion of these HENRYs will likely see their incomes increase even more in the years ahead — and they will accumulate enough wealth to ultimately become part of that precious super-affluent audience. Consider this an opportunity to start building relationships and loyalty among those who are moving toward true and sustained affluence.
In marketing to HENRYs, it’s important to understand that while they have strong cash flow, they tend not to yet have significant accumulated wealth or net worth — which impacts how they view their purchases. Their wealth is of the moment and they don’t have a significant reserve to cushion major changes in the market or in their lives. This reality often translates into them seeking out luxury without the need to actually own luxury. For instance, it might mean leasing something rather than owning it or in the case of an exotic car, a HENRY might simply rent one for a day or “test” drive one on a track to experience and enjoy the thrill without taking on any of the financial obligations or service headaches of actually owning one.
Not surprisingly, HENRYs tend to be very technologically savvy and are heavily engaged on their tablets and mobile devices, so having a well thought-out multi-screen strategy is critical for communicating with and engaging this audience. They tend to be well educated and highly visual and want to be able to manage and control their experiences — so that they can make it feel uniquely their own. They see themselves as being successful and want to apply that success to their travels and the experiences they can now afford.
As you would expect, HENRYs tend to be very well-informed shoppers and take great pride in being savvy in their purchases. And, while they have money and discretionary income, their lack of true wealth drives them to continually seek out optimum value for their travel investment.
While this is an audience that wants high end, they also tend to be fiscally prudent and practical. They aren’t looking for mass-produced offerings, but at the same time they aren’t going to be attracted to the super-premium, over-the-top item that seems overpriced. They’re more likely to seek out a Porsche Boxster than a 911. Or, a nice suite in the main building rather than that pricey, private villa.
Another important trait of the HENRYs is that they are looking for quality, craftsmanship and authenticity in what they purchase. They want to understand the backstory and history of your brand and the philosophies and details that differentiate your products and services from others they may be contemplating. Since they are less about acquiring and owning the trappings of wealth, there’s a greater emphasis on the experience and the lasting value and memories that experience can deliver.
Similarly, HENRYs are also looking for brands and products that reflect their distinct view of the world, so that their experiences become an extension of how they see themselves (or at least how they want to be seen). Letting travelers know your commitment to sustainability and the environment, and sharing how your business makes a difference in the world, are all things that HENRYs are likely to find motivating.
The beauty of travel, even at its highest and most luxurious levels, is that it remains relatively affordable when compared to many other categories of luxury products and services. As the middle class continues to come under increased fiscal pressure and finds itself with fewer dollars to spend on travel and other luxuries, our industry should look to set its sights on an audience that not only has the financial wherewithal to afford upscale travel, but that views it as one of the signs of both professional and personal success.
There’s never been a better time to welcome the HENRYs.