64 million Millennials are expected to purchase a car in the U.S. in the next five years alone. A new study provides important insights into what the emerging Millennial Generation is really looking for when buying a car. The Millennials, once known as the “Baby Boom Echo” (or Gen Y), are the largest generation in history; given this enormous and growing buying power it is safe to say that few dealers will be successful in the coming years without cracking the code on how to best serve this critical demographic.
Our friends at Deloitte recently released their 2014 Global Automotive Consumer Study. Here is the most critical headline for dealers:
- Millennials care more about the buying experience than the design of the car itself: Millennials find customer experience three times more important than vehicle design when making their final purchasing decision
Why do Millennials seem to care more about the buying process than the design of the car? Here are a few thoughts based on our own research:
- Millennials aren’t that into cars: As we have discussed in earlier posts in this series, Millennials are a generation that is more into technology than cars – there just aren’t a lot of “car guys” and “car gals” in this age group. In our research we also found that Millennials tended to have much weaker brand affinity and product knowledge than older generations, leaving them with less excitement and anticipation going into the buying process. Enthusiasm for any purchase is dramatically enhanced by excitement and anticipation going into the purchase process – just watch the child who finally gets the Xbox they have been dreaming of for Christmas.
- Millennials have higher expectations for their purchase experience across all products:Because Millennials aren’t that into cars and haven’t necessarily been dreaming of buying that particular car anyway, their focus is instead on the buying process, which puts tremendous pressure on dealers to rebuild their process around this emerging majority of car buyers. As a generation raised on buying products on Amazon and music on iTunes, Millennials expect a streamlined, fact-based, convenient process, and find the idea of the stereotypical car buying experience repelling. When asked how far the current car buying experience is from what they expect, Millennials gave Deloitte an alarming response:
- Only 27% describe their recent dealership purchase experience as “positive”. And remember, more than half of Millennial buyers say that a negative buying experience would preclude them from buying from that dealership or manufacturer again.
So what can you do to avoid being in that 73% of non-positive dealership experiences and ensure that you are getting your share of the 64 million cars they are expected to buy in the next few years? Here are three of the most important ways to win with Millennials:
1. Speak Their Language: Don’t let your web presence feel like the negative stereotype of a car dealer with “car guy talk” in your ads. Instead gather as much objective “evidence” as you can from across the Internet to build value in each car and trust in your dealership.
2. Ensure Your Salespeople are Product Experts First: Few want to be “sold” to and most consumers feel that they know more from their online research than your sales “pro.” They will only embrace your sales “consultants” if they are truly product experts. For new cars, ensure your team is practiced and certified in the walk-around for each model. Pre-owned presents a much bigger challenge given all of the different variables for each unit (packages, Carfax, pricing, etc.). Make every sales person an “instant expert” with tools like MAX Digital Showroom and ensure they use it in every consumer interaction in the showroom, on the lot or even on the phone. Keep in mind that 65% of Millennials would prefer to buy a car without having to negotiate with a salesperson.
3. Make Mobile Your Ally, Not Your Enemy: Most salesmen panic when they see a consumer pull out a mobile phone on the lot to check the market. Millennials are online all the time. It is naïve to think that they won’t use the computer in their pocket to help them level the playing the field when spending tens of thousands of dollars. The best way to win on mobile is to be proactive and make a trusted third party tool like MAX available to consumers so that your mobile tools are fulfilling consumers’ needs on your lot instead of leaving it up to Google.
The best news? There are no headlines on getting rid of dealers or taking all of the profit out of the business. Millennials are focused on a high quality, convenient experience. Deliver on those needs with a “win-win” and they are happy to reward you with their business.