The Millennials Are Here—What Now?

The topic of millennials is popping up everywhere these days. It makes sense. With 80 million members, they’re the first generation to eclipse the size of the baby boomers and they’re fast becoming the most important group of consumers in the economy. The advent of the millennial generation has also coincided with sweeping changes in how we consume media, how we communicate with each other and with businesses, and the amount of information available to consumers. The size of the millennial generation and the growth of technology means that dealerships need to find new ways to communicate and market to consumers, or risk becoming irrelevant or worse…

There are a myriad of channels open to dealers to communicate with consumers right now: social media, chat, email, mobile websites, and many more. The question is: Which channels should you use and how. With an unlimited marketing budget, the answer would be all of them. In reality, however, even the most well-funded dealership marketing departments need to make choices about how they allocate their budget.

To help sort out this conundrum, we reached out to Ken Potter, vice president, TRUECar, Scott Pechstein vice president of sales for Autobytel, Susan Lovett senior director marketing communications for AutoPoint, and Marci Francisco senior director of automotive marketing and business development for CU Direct. They are on the front lines of bringing more millennials into the dealership and were kind enough to answer our questions. Take a look at what they’ve had to say and send us your thoughts on www.DealerMarketing.com/forum.

Dealer Marketing Magazine: What is different about marketing to millennials versus gen x or baby boomers? What is the same?

Ken Potter: What’s the same: Millennials like cars too! A recent study by Deloitte found that nearly two-thirds of millennials indicate that they “love their cars.” And like all generations, millennials like to be dealt with in a truthful and transparent way.

What’s different: Millennials are digital natives. According to recent research by eBay, 94% of millennials gather vehicle information online. They want to shop for a car in the same way they want to shop for other consumer products—in the comfort of their home, on their mobile devices. They want 24-hour access to information on their terms.

Scott Pechstein: Numerous studies show that Millennials (also known as Gen Y) think very differently about cars than their predecessors, but good marketing fundamentals still apply.

For starters, gen Yers aren’t lining up to buy cars in droves the minute they reach driving age. They’re waiting longer than baby boomers predominantly did to obtain their drivers’ licenses. Economic factors (the Great Recession) and financial obligations, like student loans, make for smaller budgets. And if you think about it, technology has impacted this segment of the population more than any other. They’re tech savvy and early tech adopters, which means shopping, visiting with friends, listening to music, watching movies—none of these things really require leaving the house anymore. In urban areas, in particular, gen Yers are opting for alternative means of transportation. And probably the key trend among millennials is that brand loyalty plays a much smaller role than it did/does among baby boomers.

Optimizing your website for mobile (at least) and device responsiveness (at best), are great first steps in tapping into this market. Enabling millennials to connect with you and ultimately your brand by way of social media, mobile apps, and the preferred method of text message communication (in a legally compliant manner) is becoming increasingly important too. Quick response times are also key. What’s more, asking the right questions, such as “Who is this car for?”, “How will you be using this car?”, and “What features do you find most important?” is essential in guiding people to the right vehicle, no matter the demographic. Ditching the old school sales pitch goes a long way, too, in helping marketers connect with millennials (arguably with all car buyers, really).



Susan Lovett: Marketers who hold onto to traditional “baby boomer” marketing strategies, like print advertising, radio, and TV spots, are missing the boat when it comes to reaching the 75 million-strong millennial buyers. Millennials, whose demographics range from 16-32 years of age, is the generation that outsizes the influential-but-aging baby boomers by at least seven percent; and is the generation of comparative shopping and decision making using social media through smartphones, tablets and laptops. Gen Ys are buyers that actively uses mobile devices and social media as their preferred method of shopping as they rely heavily on these sources for products and price comparing. Since 2011, 91% of millennials are regular internet users and spend 25 hours per week online, per Forrester Research.

Marketing to millennials requires us to abandon our traditional marketing tools and create a more social interactive experience that promotes online conversations, easy online purchasing, intelligent marketing, and create a shopping experience that encourages them to take notice. We need to do this because millennials are a consumer group who are willing to reward (or punish) products and services that provide a positive or negative shopping experience. Communicate with this buying group where they spend the most time, online. You should structure your marketing strategies using social media which includes (but not limited to): blogging sites, message boards, Facebook, Pintrest, Instagram, and Twitter.

Marci Francisco: You need to deliver relevant messages to each generational segment to create engagement.

For millennials who are very passionate about causes, connecting your brand to a larger mission or idea offers a great opportunity to begin building a relationship. Mobile and video are heavily favored by this group, so optimizing the user experience, leveraging mobile and video ads, and integrating mobile chat are great ways to reach them.

While gen x is also very active digitally, their motivations differ. As latchkey kids, they became very independent and skeptical (count me among them), so your marketing should touch on more individual themes—freedom, success, life events etc. With boomers, there is an enhanced loyalty to brands which is welcome news.

With all generations though, your online reputation make or break you today. Dealers need to continue to focus on reputation management as a key marketing tool to get into the consideration set and attract potential customers.

DMM: What do millennials want in a vehicle?

KP: They want a good value, but they are a bit more price sensitive and may be more payment shoppers. Cost-to-own factors like gas mileage and maintenance are major considerations. From a technology standpoint, they expect their car to work in harmony with their various devices.

SP: They want overall value, which doesn’t necessarily mean the lowest price tag. Essentially, they want the biggest bang for their buck. Cars that are affordable, efficient, and reliable rank highest with this segment. Eco and tech-friendly features are also important. And don’t forget about styling. A recent survey by J.D. Power revealed that drivers under the age of 25 see their cars as mirrors of their personality, with one in three saying they “completely agree” that they like their vehicle to stand out from the crowd. Developing content around the value of your brand and products, built on these key triggers, is smart marketing when it comes to tapping into the primary buying motivations among millennials.

SL: Ford Motor Company is a great example of an auto maker that is making a point to understand millennials and creating products that are appealing to this buying segment. Millennials, who don’t place the same importance of vehicle ownership as previous generations, want vehicles that they can relate to. According to Ad Age, there are several key points that Ford is doing well at getting millennials interested in buying their cars over the competition:

Individuality—Millennials want to make a statement. Ford acknowledges that one in six millennials have a tattoo, thus they allow consumers various options to customize their cars by offering choices of color and embellishments for both the interior and exterior.

Connection—Staying connected to the outside world with their cell phones is the life-line for millennials. Ford has designed their cars with cell phone connectivity as a standard not an option.

Dashboard Games-For the most part millennials were born with video controllers in their hands. Thus incorporating gaming dynamics into the vehicle’s dashboard is a natural element that appeals to the gen y.

Human Touch—Ford’s research shows that when millennials mention brand on social media they expect a human response. Millennials expect instant gratification and resolution. They want their concerns and needs to be met in person or by a live human being. They want to feel special and feel like their voice is being heard.

MF: For several years, we all heard the same story: millennials don’t care about cars. I disagree. Millennials are passionate about cars, just in a different way than other generations may be. It’s less about the brand, and more about how the vehicle leverages innovative technology to meet their needs. They may not care if it’s a Honda or Toyota, but they do care about blind spot monitoring or how the vehicle connects with their digital lives, smartphone etc. The ability to make a car one’s own through customization is important, as is a connection to a cause that they care about: the environment, fuel economy etc. Ultimately, I believe that millennials want a car that is an extension of its owner’s values: connected, socially responsible, community based and an outlet for their creativity.

DMM: What are the best marketing channels for reaching millennials?

KP: Online, mobile and social media.

SP: Gen y buyers rely heavily on peer advice and referrals, so providing a great customer experience that results in favorable reviews of your brand, store, and products is a great way to influence this segment. Mobile is also critically important in reaching millennials. They’re always on, and on the go, which means apps, mobile optimized/responsive design websites, text message communication, and text message marketing (only those initiatives that comply with TCPA regulations) are important when it comes to connecting with gen y buyers. The bottom line is that all consumers are trending to increased usage of mobile devices, but for millennials, it is almost their exclusive access to the internet. With that in mind, dealers need to have mobile websites that are action oriented, while also having the ability to have a text conversation with millennials in a controlled environment.

SL: In order to grab millennials’ attention, we need to be where the conversations are taking place. Millennials respond to authentic experiences and your content needs to hit the mark. Match your messaging to the proper platforms such as popular blog sites, message boards, Pinterest, Facebook, Instagram, Twitter. LinkedIn, Tumbler, Flickr, and Google Plus+. Create interactive experiences where gen Ys can either participate or feel they can visualize themselves buying and living with your product and services.

MF: While you do need to have a presence in all channels, millennials are all about the digital. Mobile, RED, social, video, and blogs all rank high.

DMM: How can you reach millennials with mobile marketing?

KP: Reaching millennials through mobile isn’t as simple as having an “m.” website. Being mobile means that you’ve got the tools, both for customers and for your employees, that help them navigate and facilitate a complete purchase experience. The majority of customers will be using mobile phones as a primary reference tool while shopping on the lot. Mobile must be embedded as part of the experience.

SP: An emerging trend we’ve noticed is that the gateway to millennials is by text, and to maximize this opportunity, dealers need to employ text message marketing by putting key words and short codes in their marketing campaigns, as well as on the lot. With gen y buyers, and increasingly with all buyers for that matter, text messaging is a preferred method of communication. Marketers should have the ability to communicate with their customers by way of text messaging, in a controlled and compliant environment.

SL: Using these four elements is essential to having a strong mobile marketing plan:

Content—Since more than 75% of millennials access the internet from their cell phones, designing a mobile site is imperative. Create scalable sites that format well on all platforms (laptops, tablets and smartphones). Tailor your content so it’s accessible via devices your audience uses most.

Messaging—Millennials like to feel special and that you are communicating directly to them. Create intimacy by delivering personalization and value as it will outperform other types of content. Leverage your customer data to predict their buying pattern or interests.

Apps—Mobile apps are useful when connecting to millennials, as 60% of this audience downloads them to their mobile devices (Pew Research, 2013). Strategize how your app will offer value and will become an integral part of daily life. Using the app to push notifications along with messaging will be effective to continuously drive traffic and notify users about updates.

Sharing—Gen Yers openly embrace social media. Millennials like to engage in brands in the same manner they engage with their friends. This audience wants brands that provide them relevant content and in turn they will share their experience with their social connections.

MF: There’s no doubt that mobile is king, and your mobile marketing strategy will shift if you’re looking at it as a channel for customer acquisition or as one for engagement and retention. I’m a big advocate of content across all channels, yet mobile leads with your website. Make sure that your website is mobile optimized, and your store has a mobile app to continue to build the relationship post-purchase and earn loyalty. Then, make sure that you are serving up contextually relevant information and location-based promotions for millennials that have that “shareability” factor. Finally, I’m an advocate for leveraging the great talent that’s out there in the vendor space. Strategic partnerships which allow you to connect with consumers throughout the purchase cycle can definitely extend your reach and/or your success in driving more sales.

DMM: How can dealers reach millennials with social media?

KP: The best way to reach millennials with social media has nothing to do with having a Facebook page or being on Twitter. Millennials seek advice from their social network nearly twice as often as boomers. The best way to reach millennials with social media is to deliver a top-notch customer experience. Building good will among customers will reap rewards through social recommendations.

SL: Create a strategy and start simple. Facebook is a great social site to start testing your campaigns, as advertising on Facebook is fairly inexpensive. When marketing on Facebook, decide up front what kind of results you want to achieve, such as:

  • boosting your posts and increasing your likes, comments, shares, video plays and photos viewed
  • building an audience on your Facebook page
  • encouraging people to visit your website
  • creating conversions that promote specific actions for people to take on your website
  • promote an event at the dealership

Additional social sites to consider are Pinterest and Twitter. These sites also trend high with millennials who are looking to make purchases or sharing ideas and experiences.

MF: When millennials engage with their social networks, they’re looking to engage with causes that matter, helpful information on everyday situations, advice from trusted sources, and discounts or promotions. So, focus on “show and tell”. Tell your story—how do you make things better and why choose your store? Millennials want to “do good work” in this world. Dealers do great work in the community, which ties directly into that broader narrative that millennials are passionate about. Share it, and make sure its visual: the “show” part. Pictures that capture a compelling moment and inspire an emotional reaction are more likely to be shared, retweeted etc. Don’t be afraid to have some fun and be a little quirky, if that’s you. Ultimately, to gain traction, you’ve got to be authentic. The art comes in delivering emotional and information-rich content, then mixing it well with your CTAs. I’d go 85% compelling story/automotive expertise and 15% special offers, maybe even a little less. After all, social media is about being social, not being sold. And don’t forget Google +. It has serious upside.

DMM: What is the most common mistake dealerships make marketing to millennials?

KP: Millennials expect authenticity. If your marketing doesn’t reflect reality, they’ll call you on it. They don’t expect perfection, but they do expect truth and transparency.



SP: The most common mistake dealers make is assuming that millennials are car savvy. In actuality, they haven’t been dreaming of their first car since becoming teenagers, and many do not find owning a vehicle important until well into their 20s. When they’re ready to buy, they shop multiple brands up until the week they purchase and they won’t waste time negotiating. That said, dealers need to take more of a consultative approach to help gen y buyers find the vehicles that best meet their needs. Millennials are accustomed to the Apple Store retail experience, with educated consultants who guide them to the right device. In this case, they want (actually, they expect) dealers to guide them to the right car.

SL: The biggest mistake businesses tend to make with this tech savvy generation is insulting their intelligence. This is a generation that can barely remember a world without the internet, smartphones, or Google and Yahoo! They are the most informed consumers and they do their homework before they ever make any major (and sometimes minor) purchases. You can be assured that they will have done their homework, researched it online; had conversations about it with friends online; and have read a substantial amount of reviews online. Be smart. Don’t create “too-good-to-be-true” offers or over price something just so you can haggle later. This consumer group will know your pricing and have a sense of your customer service long before they walk through your doors.

MF: The most common mistake I see is holding on too tightly to the reins, focusing on pushing a marketing message out, instead of joining the conversation. Millennials are out there making connections, building relationships and exchanging ideas. While we may have excellent marketing, millennials are out there defining our brands for us. The brands that most effectively engage this generation encourage creativity, ask for engagement and do it across multiple channels.

If you want to learn more about marketing to millennials, visit us online at www.DealerMarketing.com and if you want to see how “millennial” you are (regardless of when you were born) take this quiz: www.pewresearch.org/quiz/how-millennial-are-you and post your results on www.DealerMarketing.com/forum or tweet them to us @DealerMarketing.

Michael Bowen

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