Generation Y, Echo-boomers, Generation Me, The Peter Pan Generation; over the years this group has had many different names, but none more synonymous with their condition than the title coined in 1991 by authors William Strauss and Neil Howe: Millennials.
The Pew Research Centre state that anyone born between 1981 and 1996 (ages 23 to 38 in 2019) is a millennial. Other institutions stretch the cohort back as far as 1980 and forward as long as 2004. Something that no one is debating, is that millennials, who recently became the largest consumer generation in US history at 92 million, have a spending power that marketers can’t ignore.
Millennials in the US spend $600 million each year, but the way these millennials are spending is very different from their parents. As the first truly digital generation, they have outgrown traditional marketing tactics and marketers, as a result, are scrambling to adapt.
Targeting this huge group with a generalized message just won't cut it. Doing so overlooks the fact that millennials are the most diverse, tech-savvy, and in some cases debt-ridden, group in history.
So what is the answer to this 90 million dollar question? Well, as with most things at Hurree, we believe the solution lies in market segmentation. And what segment within the millennial cohort will be the most lucrative to your business? Drumroll, please...The HENRYs.
What are HENRYs?
In demographic segmentation, the acronym HENRY means High Earning, Not Rich Yet. According to The Wise Marketer, a HENRY is “under 55 years old with an annual income between $100K and $250K, but that has not amassed investable assets of $1M”. Between 2012 and 2017, this segment of the population grew by 26%, meaning that roughly 36 million households fall into this category.
Given that 27% of HENRYs are millennials, this affluent subgroup is a highly powerful market to delve into. The U.S. Chamber of Commerce estimates that millennial HENRYs have a purchasing power of approximately $200 million directly, and $500 million indirectly through parental-spending influence.
Source: The Wise Marketer
Millennial HENRYs are at the top of their generation. Targeting these bulging bank accounts will see more direct spending opportunities and have the potential to foster lifetime brand relationships. Plus, HENRYs are trendsetters; their purchases and lifestyle choices will see less-wealthy millennials reaching for the same products as they aspire to move up the financial ladder.
So what does it take to hack the millennial HENRY market?
It’s not as simple as ‘they’ve got money, let’s go take it’. Millennial HENRYs are fiscally savvy. Growing up during the 2007 recession, they watched as global crises after global crises swept their elders into financial trouble. As such, they seek value, craftsmanship, and guarantees before they part with their cold, hard cash.
Let’s look at some of the factors that you need to consider when targeting millennial HENRYs:
Traditional marketing tactics won’t cut it with this generation; failing to adapt to the mobile marketing landscape will render you irrelevant: Innovate digitally or expire.
It won’t come as a surprise that 94% of millennials own a smartphone, and it’s with these mobile devices that they make 36% of their purchases. So how do you reach a segment that is so ardently attached to their phone?
Source: Digital Commerce 360
Let’s start with the basics; ask yourself, is your website mobile-responsive? Accustomed to having all of the world’s information at their fingertips, millennial HENRYs expect your marketing to be an easy-to-access research aide. They might have the big bucks but they’re not above trolling the internet in search of the best deal. So even if your SEO is top-notch and they land on your homepage, they won’t stick around for long if half of your content doesn’t load or leaks off their screen. Ensure that your website makes a smooth transition from desktop to mobile browsing, or face the wrath of the HENRYs.
Next, design your content mobile-first. That means knowing which social platforms to focus on - after all, 88% of millennials are on social media! Deliver engaging omnichannel campaigns that leverage the latest mobile marketing trends such as live-streaming video, shoppable imagery, high-end-influencer campaigns and customer-centric blogs (yes, millennials still read!). Make creative, shareable and authentic content that is easy to access and valuable to this demographic during the research stage of their customer journey.
Remember mobile-first marketing isn’t just helpful for your audience, it also provides huge benefits for your business. Through vital social media and web analytics insights, you can track your target demographic’s behaviours and preferences and, in turn, craft campaigns that accurately meet their needs.
Understanding Personal Branding
Millennials grew up with Facebook, Twitter, and LinkedIn; they watched social media evolve, and in some cases, take over people’s lives. Social media has changed the way millennials present themselves to the world. They represent the first generation of personal branding.
The term personal branding, first utilised in 1997 by Tom Peters, refers to the continual practice of curating and maintaining an impression of the self within the psyche of one's peers and/or the outside world. The procedure has been accelerated greatly with the emergence of social media and the creation of a digital persona which is part aspiration, part reality and part fiction.
Millennial HENRYs are particularly preoccupied with their personal brand; each purchase is carefully considered, researched and reviewed to find the perfect fit for their VIP personas. Product choices are seen as extensions of their affluent brand, so elements such as high-quality materials, artisan craftsmanship and the pop-culture relevance of a product are all things that HENRYs will consider before making a purchase.
Traditionally, to convey personal affluence, individuals would choose legacy brands such as Rolex or Tiffany. However, for millennial HENRYs, luxury is more of an individualistic concept. Take a young New York City lawyer, for example: faced with his boomer-generation peers and their flashy Rolex watches, does he conform to the norm of his colleagues? Nope. Instead, he chooses a $100 Timex Triathalon watch that shows the world who he is: an athlete, a sportsman, an individual. Personal choice is the status symbol of a millennial HENRY.
Positioning your brand, products and services within the narrative of a millennial HENRY market means understanding that they are not the same as their parent's generation. HENRY millennials aren’t always looking for the highest ticket price to convey their wealth, rather they want a brand that understands who they are and that is emulated in modern marketing. That's why brands like Timex, who offer strong craftsmanship alongside customisable features and social-proof, are winning with this demographic segment.
Creating an Experience
Millennial HENRY’s have switched up the marketing game so extremely that some are saying fundamental marketing techniques, such as the 4Ps, are outdated. As the dawn of millennial spending-power emerges, so does the experiential economy and with it, the 4Es:
- Product >> has changed to >> Experience
- Place >> has changed to >> Everyplace
- Price >> has changed to >> Exchange
- Promotion >> has changed to >> Evangelism
To be fair, this isn’t a completely new concept, in July 1988 the Harvard Business Review reported in an article entitled ‘Welcome to the Experience Economy’, that “From now on, leading-edge companies – whether they sell to consumers or businesses – will find that the next competitive battleground lies in staging experiences.” These wise words couldn’t be truer today as marketers aim to focus on the entire customer experience.
Experience marketing is now far beyond that of Disney Land and Broadway. You don’t purchase dinner, you are transported to Italy to experience home comforts like mama used to make. It’s not just an Old Fashioned cocktail, it’s a whirlwind dive into the prohibition era complete with live jazz and red-district lighting all from the bottom of a glass.
But don’t worry, your brand doesn’t need to become an all-singing, all-dancing, Butlins-esque experience generator. The experiential economy for millennial HENRYs is all about brands showcasing how their products can elevate authentic, exclusive and luxury experiences. This is something content marketing strategies are perfect for.
Take the extreme weather retailer, Canada Goose, and their Live In The Open campaign, for example. The company's origins lie in clothing Canadian lumberjacks, however, through experiential marketing, they have become an authentically rooted, luxury streetwear brand for millennial HENRYs.
This 30 second long, highly cinematic example of millennial HENRY targeted content marketing features scenes of open natural landscapes, inner-city street art, and extreme sports. Not once is the product explicitly mentioned, nor price, nor place of purchase.
This luxury brand is speaking straight to the millennial HENRY market and through a short video, they open up a world of experiences for their audience. The individuals featured, all of which are real millennials that the brand has chosen to document, are shown carrying out their extreme lifestyles aided by the comfort of their Canada Goose clothing. Consumers are urged to ‘Live Without Limits...Fear...Boundaries’.
Authentically Tackling Social Issues
Being woke is so in right now, didn’t you know? Millennial involvement in social justice issues has skyrocketed in recent years. This is partly due to the internet making information more freely available, coupled with millennial efforts to personally brand themselves as caring or even as avid activists. Sofa slacktivism has turned to brand activism with 74% of millennials believing that brands should take a public stance on important social values.
Millennials are looking to larger corporations, and small businesses, to make a positive change with their platforms; ethical sourcing of materials and the treatment of workers are all under a microscope when HENRY goes shopping.
In fact, Deloitte’s Millennial Survey showed that this demographic believes business can be a “force for positive change”, which means millennial HENRYs want to invest their trust in the hope that brands will operate for more than profit alone.
But what issues should you be tackling? What do millennials really care about and how can you relate your involvement with this issue to your overall brand message? Here are a few of the most important issues you should be considering and the amount that millennials surveyed care about these issues:
Source: The Renewal Project
[Respondents were required to pick between 1 to 3 issues]
After all, one of the biggest mistakes you can make as a brand is wading into social issues from an ill-informed stand-point. Lest we forget the backlash Gillette razors faced after their #metoo blunder. In 2019 the brand ran an ad in which their famous slogan ‘The Best A Man Can Get’ was changed to ‘The Best A Man Can Be’. They intended to comment on the toxic-masculinity conversation, however, their customers did not take kindly to the message.
The world’s no 1 shaving brand took an $8 billion hit after the ad aired at the beginning of the year. This reaction came not because their message was wrong, but because their target audience took it as an attack on their masculinity.
Moral of the story? Choose wisely when it comes to getting involved in social issues, be authentic, because if the issue is not at the core of your demographic’s values there are millions of millennials ready to take to social media in revolt.
Fostering Brand Loyalty
Did you know it costs five times more to acquire a new customer than to retain an existing one? In fact, increasing customer retention by just 5% can increase profits by 25% to 95%. This is where customer-brand loyalty comes into play. But how do you make users become loyal to your brand?
Research from Texas A&M University shows that children become “brand-conscious” as early as two years old; as children, we develop positive, or negative, associations regarding particular brands as a result of our personalities, peer preferences, and parents' influence. This is all part of “consumer socialisation”. In fact, 63% of millennials say that they use, or are loyal to, many of the same brands that their parents were or are.
Some argue that brand loyalty is in decline or worse, is dead! But levels of brand loyalty have only dropped 6% from the baby boomer generation in comparison to their millennial offspring.The issue may not be a millennial lack of loyalty, but rather a change in the criteria and effort required to gain it.
Source: The Wise Marketer
Why is that? Well, it’s a combination of things: the rise of the internet, corporate distrust and changing expectations of customer service.
So what can brands do to make sure they keep those millennial HENRYs spending their bucks for years to come? It starts with understanding that this generation is impatient; the internet has ensured that HENRY millennial attention spans have been zapped to next-to-nothing. This high achieving cohort wants instant gratification which spans to almost every part of your transaction:
Another important thing to remember is that the VIP lifestyle is highly attractive to HENRYs, they seek it out wherever they go. As high-earners who are also fiscally frugal, they are attracted to a luxury deal with exclusive, or even free, benefits. For this reason, a key factor to modern brand loyalty is creative loyalty schemes which offer discounts, early access to products and member-only experiences.
To improve life-long customer loyalty among HENRY millennials, many luxury brands have introduced their own programs:
- American Express – Centurion
- Jumeirah – Sirius
- Star Alliance – Frequent Flyer
- Lancôme – Elite Rewards
- Saks – SakFirst
These loyalty rewards help to create a positive customer experience and retain those HENRY consumers who have more ability than ever to drift between brands and seek out better deals.
It’s all too easy to follow the herd in marketing nowadays, but is it always the most effective marketing strategy? Resist the urge to tarnish all millennials with the same strategy; use demographic segmentation to thin that herd into a lucrative and precisely targeted segment: HENRYs.
With a combination of high-end, luxury marketing strategies, such as an emphasis on quality and social-justice issues, and mass-marketing tactics like value-focused rewards, you can hack the HENRY market now and for life.
Get started on your journey to improved audience targeting with this FREE guide: The ABCs of Market Segmentation 💌 Don't hesitate to get in touch with me directly via firstname.lastname@example.org with any of your questions, or to let me know what is working for you in your marketing strategy!