Millennials are approaching brand loyalty differently. They evaluate mission statements carefully. Cash rewards are less enticing. Experiences are more motivating. And once aligned to a brand, they are more resistant to competitors’ offers. According to new research we conducted with The Wise Marketer, 38% of Millennials buy exclusively from their preferred brands versus only 24% of Boomers who are as loyal.
But here’s the problem for brand marketers: Targeting a loosely defined group of 80 million consumers isn’t a viable strategy. Luckily, the secret to effectively leveraging this generation can be found by targeting one specific sub-segment – The HENRYs.
HENRY stands for “High Earner, Not Rich Yet.” This group is defined as: a household under 55 years old with an annual income between $100,000 and $250,000, but that has not yet amassed investable assets of $1 million. HENRYs technically span three generations, but Millennial HENRYs have rapidly become a brand’s most valuable target because of their current ability to spend, total lifetime value, and propensity for loyalty stickiness. So how are they reached?
Whether engaging with HENRYs at an overall brand level, or more specifically through a targeted loyalty strategy, their unique attributes provide a clear pathway on how do that effectively:
1. Focus on experiences: 78% of Millennials said they’d like to increase spending on experiences over material objects in the coming year. Tap into this sense of adventure. Your brand doesn’t need to offer the experience itself, but showcase your products elevating an experience or making it easier to attain. Remember, HENRYs are making purchasing decisions with their ideal self in mind, so help them envision an ideal scenario which features your brand.
2. Utilize scarcity: Implement the scarcity principle to perk excitement and give existing members a reason to check back in with your content often. HENRYs love being “in the know” and when they see novel content, they are more likely to share within their sphere of influence.
3. Keep it clean: Make information about your brand, product, and loyalty program clean and easy to digest. Growing up on the internet, they expect to find instant answers. If your mobile app or website is a disaster to navigate or loyalty program is layered with red tape, forget about it.
4. Make it about them: Most importantly, HENRYs care about brands that have the potential to improve their own personal brand equity. “When a brand's mission is to help me succeed, and their quality helps me accomplish that, I don't just want to be a customer, it makes me want to be an evangelist for them," says Matt, a 35–old HENRY in the communication industry. The ability to leverage this trait is paramount for a brand’s success. In fact, 18% of Millennials rank “seeing a company as a reflection of my lifestyle and/or values” as their #1 loyalty driver.
The bottom line is HENRYs are ready to spend money with your company right now. More significantly, as the most affluent group of their generation, HENRYs will be emulated by aspirational Millennials who are striving to find that same elevated level of financial success. Gaining the loyalty of HENRYs now is your key to capturing the attention of this whole generation for years to come.