Millennial Buyers Have Arrived – Meet Them Online with a Transparent & Great Web Presence. You Will Not Earn their Business Online doing business as usual.
Millennials – roughly those born between 1980 and 2004 – are late in joining the car-buying market. In fact, they appear to be late to everything – leaving home later, getting married later and having families later. But the latest reports indicate that generation is finally entering the market en masse. Recent studies by Cox Automotive and Deloitte Consulting Services found millennials made up 36 percent of the lending market in 2016.
However, the millennial care-abouts and approach to purchasing a vehicle are very different from traditional car buyers. And those changes could mean profitability for independent dealers. According to Forbes, Cox Automotive and online news site Elite Daily: • Almost 60 percent of millennials set a budget before looking at vehicles, compared to 46 percent of Generation X and 40 percent of baby boomers. • 83 percent of millennials said an affordable monthly payment is very important when selecting a lender. • 62 percent are more likely to become loyal customers to brands that engage with them online. • 87 percent use two to three tech devices at least once daily.
THE COST-CONSCIOUS CONSUMER Millennials are budget-conscious because they have to be. With an average monthly student loan payment of $351 extending well into the future, they’re looking for vehicles that can fit within their budgetary constraints. A study last year from LendingTree. com reflected an increase in auto loans for drivers aged 18-34. But the average loan amount was $3,000 less than for those 35 and up. While an increase in disposable income could account for that difference, in general millennials remain cautious about taking on more debt. In the past, vehicles were viewed as an extension of a buyer’s personality or social status. Got a promotion? Get a luxury or a sports car. Millennials currently swamped with college debt don’t have the luxury of thinking that way. For now, a vehicle is a means of transportation – an easier way to get groceries home or ferry a growing family. In fact, according to a survey by the personal finance website NerdWallet, 43 percent of millennials said owning a car is a hassle.
MARKET-SHARE OPPORTUNITY! Because of their debt and budget constraints and economic concerns, millennials want reliable, affordable vehicles. And that’s where independent dealers thrive. The challenge with millennials is getting their attention. To really capitalize on their purchasing power, you must meet those consumers where they already are – online. Engaging with millennial consumers online is more than simply displaying your inventory on your website. To really connect and gain their loyalty: • Train your team to answer inventory questions over email, text, social media sites, etc. • Actively monitor and respond to dealership reviews. • Provide F&I product information online.
Here’s the secret dealerships that engage with consumers online don’t want you to know: Answering customer questions and providing F&I product information online can increase your unit sales, penetration rates and PRU. A recent Cox Automotive study showed improved transparency online boosts customer satisfaction, especially in F&I. On average, millennials spend 17.5 hours shopping for a vehicle – two-thirds of it online, using sites like CarGurus, Autotrader and Cars.com. They look at customer reviews. They browse your website. The companies to which millennials give their business either conduct all their business online or provide as much online transparency as possible with regard to their products and services. ONLINE TRANSPARENCY Millennials view their time as a form of payment. To that end, they don’t want to go to a dealership just to find out the history or condition of a vehicle. They want that information up front and online. Think about it. How many of the emails you send to consumers asking them to come to the dealership for more information actually result in a visit? Not as many as you’d like, right? That’s why answering consumer questions and responding to reviews online is so important. It helps create transparency by providing a two-way conversation between consumers and the dealership. In the traditional finance process, consumers know nothing about F&I products until they reach the finance office. And the fact they have no control and no knowledge of F&I products makes them feel somewhat defensive. That’s why many times their guard immediately goes up when they enter the F&I office. Dealers that offer F&I product information online give consumers the feeling of control. They’re also generating greater interest in the products and benefits by letting consumers take in that information on their own time, with no one there to pressure them into buying anything. Cox Automotive’s research found 83 percent of consumers are interested in learning about F&I products before entering the dealership, and 63 percent would be more likely to buy F&I products if they could learn about them on their own time before finalizing the vehicle purchase. Providing F&I product information online lets consumers enter dealerships with questions about – and interest in – available F&I products. Their guard is down. They want to buy. Now that millennials are in the market and looking for vehicles you have to offer, isn’t it time to capture that market share by increasing your online presence? BY GARY BISKUP