How to Turn Gen Y’ers Into Gen Buyers

Industry experts from VinSolutions, Outsell, Netsertive, and izmocars reveal the secrets of landing loyal millennial customers

Millennial (a.k.a. Generation Y) car buyers are not the future—they’re the present. And the time to make marketing and catering to Gen Y’ers your priority is now.

In June 2015, the U.S. Census Bureau reported that millennials (people born between 1982 and 2000) surpassed baby boomers as America’s largest generation, topping 83 million and constituting more than a quarter of Americans. The oldest of the millennials are beginning to hit their stride professionally and financially, while even the youngest members of the generation are old enough to drive. The size and demographics of the generation make it the prime target for automotive sales and service now and for many years to come.

In recent years, many faulty generalizations about how Generation Y differs from past generations have been accepted as conventional wisdom: They don’t value material positions as much as their parents or older siblings, they don’t like going into physical stores to shop, and they’re not interested in cars or driving. By now, however, most of those preconceptions have been disproven or cast aside, and businesses owners realize they’re look at a buying generation of uncommon possibilities.

But questions remain: How are the millennials different from other generations of car buyers? What do they care about most, and how are they most effectively reached? And what types of marketing and selling worked with previous generations that won’t work with today’s social media–dependent, device-toting Gen Y’ers?


To tackle those questions and more, we asked four automotive thought leaders to share their thoughts and strategies about how to successfully market to the crucial millennial market: Dan Moore, senior director of digital strategy, VinSolutions; Craig Vore, insights manager—strategy and optimization, Outsell; Tej Soni, CEO, izmocars; and Gary Galloway, automotive digital marketing evangelist, Netsertive.

We thank them for their insight into what it takes to capture the hearts, minds, and loyalty of today’s predominant consumer generation.

Dealer Marketing Magazine: Are the stereotypes about millennials being radically different from previous generations of consumers true?

Dan Moore: Radical is such a bold word. Millennials are different, but I think we’re seeing these same stereotypes across many consumer demographics. Look at technology enhancements—social media, for example—and how easy these advances make it to communicate and get immediate responses in almost every aspect of life. This real-time engagement is what’s really driving this change, and what makes today’s consumer as a whole different.

Time has always been a major issue in the automotive industry. If you think about the biggest complaint from car buyers, it’s usually how long and drawn-out the car-buying process can be. People, millennials especially, now consume information incredibly rapidly, and the rate at which they can get feedback from influencers or their peers is even faster. This supersonic rate of communication makes millennials—and a lot of today’s car buyers—different from previous generations in that they expect faster, more efficient service in every aspect of car buying, from researching to buying to service.

Craig Vore: Millennials, born between 1982 and 2000, are the first generation bigger than the infamous baby boomers, and according to industry experts carry $170 billion annually in spending power. Highly educated, millennials may have a hard time getting their first job, but over the long term have huge value as consumers. Automotive brands that can capture their brand loyalty early are well positioned to earn more of millennials’ wallet share as they age.

The big difference to me is that millennials grew up with technology interwoven into many parts of their lives. They grew up with the Internet and mobile phones and texting. Technology is integral to how millennials operate on a daily basis. That has big ramifications for auto brands and dealers who rely heavily on traditional media such as newspaper advertising.

Tej Soni: Millennials are different from previous generations because it’s the first generation in a long time to face a recession. They are usually more educated and carry heavy debt because of college or credit cards. Add the aspect of social media and migration for jobs, and you have a demographic which behaves completely differently than their parent’s generation.

Millennials are brand conscious, but they like attributes which appeal to their needs and emotions. They are conscious of the environment, like better design, respond well to connectivity, and want their choice to reflect their individuality.

Millennials are increasingly looking at cars as transportation, and are not big on ownership. Carrying a high debt also influences their views. They are comfortable with new paradigms like Uber and live in a sharing economy. Automobiles are a big part of what is likely to be more shared in the future.

Gary Galloway: Many of the common stereotypes associated with millennials, namely their technology dependence and short attention spans, are having an impact on their consumer habits and their individual paths to purchase. In this way, as a generation, the millennial consumer is tasking auto dealers with making their marketing efforts faster, more digital, and targeted to the needs of this younger generation.

While boomers were easily influenced by traditional marketing, millennials average many touch points on their path to purchase, in part because of their fast-paced nature and need for instant gratification. They source product information from a variety of mediums: local retailer and brand websites, online ads, blogs, social media, and more. They are accustomed to and expect on-demand information that they can access anywhere, anytime, and on any product they are looking to purchase.

Their need for instant information is fueled by the technology that they have at their disposal. Millennials are more knowledgeable of technology than any generation before them. As a result, their use of technology to make purchases is dramatically changing the marketing landscape.

It is not just the use of technology that is causing major shifts in how millennials respond to marketing, however. They represent different buying habits than their generational counterparts. They demonstrate brand loyalty more than other generations, and are also more likely than any generation before them to apply their values to the market.

Millennials want engaging content and an interactive buying experience—one that connects with their values, allows them to interact with and customize a product, and easily share information about it with others.


DMM: What are millennials looking for in the brands and businesses they buy from, and what can auto dealers do to best cater to them?

DM: Ultimately, millennials want transparency and to be communicated with in the way they prefer. Dealers must be consistent across all mediums with their messaging, their pricing, and all aspects of their business. And when they communicate with millennials, dealers need to reach them via the channel and method they prefer. Some might prefer email, some might prefer text, some might want to live chat. Each person has their own identity and communication preferences, and dealers must be cognizant of these unique preferences and tailor their communications accordingly.

CV: Millennials don’t want to be sold to—they want to be listened to. They want an exchange of information, not a sales pitch or a lecture. Auto dealers that do a good job listening to the customer’s needs and then meeting those needs are going to do well with millennials. Here are some tips we share with the dealers we work with:

[First], get on social media and monitor your online reputation. Many millennials don’t make a move without consulting their social media network. If someone they admire likes your brand, you’re in. They are also much more likely to check out online reviews at sites like Yelp. Check out your profile and make an effort to raise your ratings. Respond to reviews—even negative ones—publicly to show that you truly care about the customer experience.

[Second], let them handle much of the research and buying process online. Your website should be crafted using responsive design techniques, meaning it looks great and functions well whether it’s viewed on a PC or a mobile device. First impressions count, and a bad first impression on the Web can mean a millennial never returns to your site. Worse, millennials will share a bad experience via social media, so the effect is amplified.

[Third], don’t spam. Email marketing can be extremely effective with millennials if it’s targeted and relevant. They expect a personalized approach that emphasizes customer benefits, not marketing-speak. But because many millennials don’t use email as frequently as other generations, auto brands and dealers should also explore mobile marketing.

Millennials tend to text far more often than they email. This can be a plus for marketers, because text messages have a 99% read rate—with 90% read within three minutes of delivery. Moreover, Outsell’s data shows that dealers enjoy on average a 31% response rate across their SMS campaigns. That’s a significantly higher response than a typical email.

[Finally], don’t worry, the salesperson is still relevant.Though millennials prefer to handle most of their research online, in the end they still want to drive a car before they buy, and they want a trusted advisor. That’s where your salespeople come in. Keep in mind that, as with email marketing, a transparent approach emphasizing benefits and not marketing-speak is best. This generation values frankness more than any other.

TS: Millennials look not only what the brand delivers in the product, but also whether it appeals to their social conscience. It’s not about being touchy-feely, but about connecting with their audience. Lady Gaga and Beyonce connected with the audience at the last Super Bowl while the older generation looked on and frowned at their antics. Dealers need to understand their audience. There are a couple of easy ways to do this—pay more attention to what their kids are doing or even hire younger sales people who would naturally be able to communicate with their peers.

However, we must all keep in mind that great content—and by that we mean slick and engaging presentation married with a great narrative—transcends all demographic and psychographic barriers. The challenge is not so much wooing millennials as it is leveraging the power of great content that speaks to the entire universe of potential buyers.

GG: Economic value of the vehicle: Millennials feel good about investing their money into a product that will help them save more, which is why they are drawn to cars with the most economic value. Auto dealers can best cater to this by creating online ads for cost-effective cars and making consumers feel like they don’t need to spend a lot of money in exchange for a quality car.

Technology that enhances vehicle safety: Safety is a priority, especially for those who have young children. Millennials are more likely to pay more for technology that enhances vehicle safety than any other demographic (J.D. Power, 2015). Auto dealers need to create online ads that emphasize safety features, so that consumers feel like their car is a good investment.

Online presence: Millennials expect to see information about the cars they want online, and preferably on their smartphones. Millennials also like to use online video more than any other demographic, and they prefer to see scripted content in an online video (comScore, 2014). Although millennials research products extensively online before making a purchase, 97% will buy from local retailers (BIA/Kelsey and ConStat, 2010).

But, unlike their boomer parents who expect to get most of their information about a product from their local retailer, millennials come into a store already well-informed about the products they want to buy. If dealers want to capture the attention of this tech-savvy demographic, they must have an online presence that conveys a consistent message across multiple platforms that meets millennials’ expectations for on-demand and up-to-the-minute information on their products.


DMM: Do you expect emerging automotive technologies—like electric and autonomous cars—to have a significant impact on the attitudes toward vehicles and future buying habits of millennials?

DM: Millennials are the connected generation. We’ve seen the impact technology has had on their attitudes toward other things: for example, choosing Uber and other ride-sharing apps over calling a traditional taxi. And we’ve already seen how significantly technology has changed the way millennials shop for and buy cars; e.g., doing the vast majority of research and decision-making online before ever stepping into a dealership.

I think it remains to be seen how much this will impact the types of cars they buy. I’m hesitant to paint millennials with a broad brush here, because despite all the technological advances in the world, there will still be some people—regardless of age—who will prefer to get behind the wheel of a gas-driven car, just like there will be those who want an electric car that drives itself.

And much of this will be predicated on what the industry actually produces versus the demand of individuals. Yes, hybrids and electric cars are in the market now, and they’re gaining steam, but gas-driven and hybrid cars still make up the vast majority of what’s available. We can predict all we want, but until manufacturers are producing things at a higher clip, we won’t know which types of car will actually have a higher take with millennials.

CV: Millennials may be more practical than we give them credit for. When gas prices were high, we saw younger car buyers flock to electric vehicles. When gas prices fell, electric vehicles sales fell along with them. I do think there is high interest among younger car buyers in auto tech innovation, and that may be what attracts them to a dealer. But in the end, they’ll buy the car that fits their needs. So again, dealers need to pay attention to what an individual car buyer wants and market to them accordingly.

TS: Electric, alternative-fuel, and autonomous cars are no longer emerging technologies. They are here and already reaching maturity in terms of technology. User adoption is already high where government permits it.

It’s less about trying to second-guess where the technology is going—it will go where the demand tells it to—and more about building and then marketing cars in a way that is likely to have that “a-ha! I’ve gotta have that!” moment that compels a purchase, and from there, brand evangelism and loyalty. A great product is certainly a key part of the equation, but so is presenting and communicating why and how it’s great.

Millennials will gravitate towards pay-per-use and be more inclined to share cars. Millennials are the opposite of hoarders. They share easily and this influences their decisions. Why buy when you can share or just pay for the ride?

GG: According to Nielsen, more than 50% of millennials are willing to spend more on products from socially responsible companies. Given that millennials have a strong tendency to buy socially responsible and quality products, this will impact the kind of cars they purchase and why. They want brands and businesses to not only provide quality products they need for their families, but they also expect them to have a positive social impact.

According to a 2014 report from the World Resources Institute, battery-electric cars have excellent acceleration, offer owners greater convenience and time savings, and are more efficient than gasoline or conventional hybrid cars, making them appealing to millennials on the go. As a result, we will see continued growth for hybrid cars, given that these vehicles are more environmentally friendly and give consumers more bang for their buck.

DMM: Social media is obviously essential in marketing to millennials, but it is now to older consumers as well. Should dealerships have multi-tiered social media campaigns to cater to millennials, or can a dealership’s social campaign resonate effectively across all demographics?

DM: The overall landscape of social media changes every day. Take Facebook, for example. The younger generation is phasing out, and the 40-and-over demographic is using it in growing numbers. Millennials are going to the newest, freshest social media platforms instead. Dealers need to continually watch their demographics and make sure social campaigns are reaching their target audiences on the platforms they’re most engaged in at the moment.

Social media for automotive is especially difficult because you are trying to sell something, and that’s not necessarily what social media is designed for. It’s designed for engagement and influencing and building advocacy. So how do you get social communities to talk about you? How do you get influencers and advocates for your brand? Ultimately, in order to be effective and reach the demographic you’re targeting, you need to influence your consumer base to advocate for your brand on these platforms.

CV: Dealers should let the customer choose which channels they want to use. Many younger car buyers may prefer text, but often, older ones do too. With digital marketing platforms, it’s easy to track customer preferences, and easy to customize your marketing for each individual customer across all the channels they prefer. Automation can remove a lot of the complexity around multi-channel campaigns, so dealers can focus on creating strong content and offers rather than the mechanics of delivery channels.

TS: Social media is big but it has also spawned an era of too much information. Attention spans are shorter and reading is reducing to scanning. In fact, reading is being replaced by seeing, as in videos.

Dealers should tread carefully in social media by not being too intrusive while serving the needs of their customers—very much like the staff of a three-star Michelin restaurant.

Use social media effectively to communicate service offerings, new model availability, and introduce dealer staff who can play a big role in being “social ambassadors” for the dealers.

GG: By the year 2025, 75% of all cars will be bought or owned by millennials. Given that millennials hold the buying power for things like car purchases, it’s important for dealerships to cater their social media campaigns towards this generation. Millennials’ preferred mode of communication is texting and social media, so a salesperson will have better success using these methods to draw this generation into their dealership as opposed to using phone or email.

Leveraging knowledge on specific preferences we know millennials have—such as the fact that over half of millennials say they are extremely or quite loyal to their favorite brands, according to Elite Daily and CrowdTwist—is imperative to a dealership’s social media strategy. They need to create multitiered social media campaigns that target this characteristic of millennials in order to increase car sales and strengthen customer relationships.

DMM: What are the unique financing issues and challenges that millennials present to dealers, and how should they be addressed?

DM: One of the biggest challenges dealers face is communicating the true value of what they’re selling. For example, if a dealer is selling a service contract, they shouldn’t wait until the buyer is in the finance room to tell them that they need it. Dealers need to educate the buyer on why the service contract is valuable long before that person walks into the dealership. Dealers should use their websites and social media platforms as educational tools that spell out how the extended warranty is especially valuable for X car that has this upgraded electronic system, or why prepaid maintenance actually saves the buyer more money over the life of X car. Data is showing us that millennials are willing to pay for these things; they just need to know why they’re important.

Dealers must be transparent in everything they’re discussing as it relates to financing for all car buyers, not just millennials. And transparency doesn’t mean dealers must offer the lowest price. It means they need to educate buyers on the value of what they’re selling, and that needs to happen early and often. There’s still a stigma often associated with the “secret financing room,” where buyers think they should automatically say no to everything the dealer offers to avoid buying add-ons they don’t need. However, people purchasing a TV will pay for a $300 warranty without thinking twice. If dealers start the value conversation long before the buyer reaches the financing stage, I think they’ll find they sell much more.

TS: Millennials have a heavy debt from college or credit cards. They have faced pay stagnation and difficulty in finding good-paying jobs. This makes them more likely to lease or share than to buy or take a loan. Dealers have to be ready for more lease [deals] and maybe even offer leases with full maintenance built in. Most brands are already offering this, but overall the trend is going to be more leases than sales.

Right now there is growth driven by easy credit and low gas prices, but this is an artificial high and will not last forever. Subprime lending is also at an all-time high. Dealers should try and be more conservative in deals and not carry the loan papers directly.

GG: Millennials demonstrate different buying habits than previous generations, which can create some challenges to dealers. One example is that millennials want quality and value, but not necessarily luxury when buying a car. Many of them are still paying off student debt as they are starting families and saving for or buying their first homes. As with many of the products they buy, they want the flexibility to personalize their cars through the ability to combine various options (Strategic Vision, 2014).

Millennials are digital natives. They spend an average of more than three hours online every day (Pew Research, 2015) and check their smartphones an average of 43 times a day (SDL Research, 2014). Unlike boomers, millennials don’t want a long and drawn-out negotiation on price and options in the showroom—they come ready to buy what they researched online.

DMM: Are the manufacturers doing enough to attract and cater to millennial shoppers with their products and marketing, or are dealers having to make up the difference to appeal to younger consumers?

DM: OEMs are doing a lot to cater to younger consumers, but it’s always going to be up to the dealers to communicate to their customers in the manner they prefer. So for millennials, that might mean text and social media versus phone and email. Both manufacturers and dealers should focus on reaching every customer with the right message at the right time, and providing the content that answers their questions before they ever set foot into the dealership.

I think it’s important to note that although millennials are a huge market, we still need to think in terms of all generations of car buyers. Dealers should evaluate how they’re attracting car buyers, not solely based on age demographics, but based on the time we’re all living in, a time when every car shopper wants fast, efficient, targeted communications. Everyone, not just millennials, wants to be communicated with in the manner they prefer.

CV: I think the manufacturers do a great job of messaging to millennials. It’s up to the dealers to capitalize on that great content, to make sure it gets down to the grassroots level, and is incorporated into their local marketing campaigns. That personalized, multi-channel aspect is important, and listening to the customer’s needs is absolutely crucial in order to make that work. Millennials don’t respond well to mass-marketing campaigns.


TS: Manufacturers are doing quite a good job in addressing the needs of millennials. At least most of the top brands. It’s not just about new models, but about brand positioning. Smaller, smarter, sexier is in.

GG: Neither the manufacturers nor the dealers are doing a good enough job to cater to millennial shoppers with their products and marketing. In fact, a large disconnect exists between the manufacturer and the dealer, which creates issues when trying to market to millennials. A survey by Borrell Associates and Netsertive showed that only 20 percent of dealerships said their co-op programs offered marketing support for reaching millennials, and found that nearly one in four dealerships haven’t configured their primary lead-generation tool (their own websites) to “speak” to millennials on their own terms (mobile media).

Without an effective co-op program or a well-designed website, dealers are unprepared to target millennial shoppers. Marketing to millennials shouldn’t fall on the manufacturer or dealers separately—it should be a collaborative effort that ultimately causes the consumer to purchase a car.

Kurt Stephan

1 Comment

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    John McKinnon December 09, 2016

    Great read again Kurt, thank you. On subject, Dealers are engaging millennials where they live (on their phone) with text message replies thanks to TextUps – generating leads 24/7 online and on the lot.


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