HENRY: Your Future Best Client
Who is HENRY? HENRY stands for High-Earners Not Rich Yet, also often referred to as “affluent adults” or upper-middle-income earners. One of the key differences between HENRYs and “the rich” is that HENRYs earn relatively high incomes but have little accumulated wealth. Still, HENRYs have money to spend on things they value, such as good design and luxury items.
Portrait of a HENRY
Although they hold fewer assets than the rich, many HENRYs are on a trajectory to becoming ultra-affluent or wealthy and thus long-term customers of luxury goods and services. Many, but not all, HENRYs are young professionals and entrepreneurs, mainly in their late 30s and 40s. They tend to be well-educated, savvy consumers with a taste for the good things in life. They tend to live in high-end neighborhoods and, when they can afford them, purchase luxury homes. According to the Conference Board, about 40 percent of all consumer spending can be traced to HENRY purchases. Women control up to 80 percent of the spending in HENRY households.
HENRYs comprise around 13 percent, or some 17 million, US households. The original definition of a HENRY, from 2003, is someone with an annual household income of between $100,000 and $250,000, holding less than $1 million in assets. However, that range can shift considerably depending on where they live. Today’s HENRYs may have an annual household income of between $130,000 and $150,000 for those living in parts of the Midwest and South and up to $500,000 for those living in coastal metro areas. They have benefitted in recent years from rising home values and stock prices, but by and large, unlike the ultra-affluent, do not have large amounts of discretionary cash to spend—yet.
Get to Know HENRY
As an interior designer, HENRYs are a group you should keep an eye on. They may not be ready to splurge on a luxury or vacation home, but they already are spending on home remodeling and engaging professionals to help them. In the 2022 Houzz & Home Study, for instance, more than half of the participants were within the HENRY age, income and home value range.
For the past decade, HENRYs have been a target of luxury goods marketers, who view them as potential lifelong customers. Some things they have learned about them are:
- They appreciate a high level of service and want to work with pleasant people.
- They respond to stories.
- They are careful buyers. They appreciate quality, but also look for value.
- They buy premium products.
As first-time clients, HENRYs may not be willing to tackle a large or expensive interior design project. But, if they are satisfied with the results, they have the potential to become long-term clients, whose needs will grow as their wealth increases.
Baby boomers, who, along with the ultra-rich, have been a mainstay of residential design clients for many years, will gradually have less and less need for your services. Today’s HENRYs will continue to accumulate wealth and assets as they reach the peak of their professional careers, and in the second half of the decade will enter the ranks of the wealthy. Develop a relationship with them now. They may turn out to be your next best client.