Selling to Millennials
Mastering the millennial market is worth your dealership’s time and effort. The ROI of studying the generation that has fascinated the market is pays off beyond the initial sale, in long-term warranties, service agreements, and a long-term partnership dealerships have only just begun to understand.
The generation referred to as “Digital Natives” is unique and comes with a few caveats. You will have to change the way you sell, market, build relationships as you reach out to them. It’s not hard, but it does require attention to detail and a focus on the digital experience.
FAST-PACED, DIGITAL, AND SMOOTH EXPERIENCE
The car buying process for millennials begins online. According to a 2015 report, 65% of millennials are using their mobile device to shop for their next automobile. According to Edmunds.com, millennials use their mobile device 80% of the time for at least one car related service.
55% of millennials visited a dealership in person after reading reviews online.
“Millennials are 262% more likely than the average shopper to be influenced by smart-phone apps.” - Jeff Fromm, Marketing to Millennials Reach the Largest and Most Influential Generation of Consumers Ever
Building a seamless online experience is no longer a “nice-to-have.” If you want to capture the millennial market, it’s essential.
A SURPRISINGLY DIFFERENT DEMOGRAPHIC
When it comes to millennials, you can forget about status. Choosing a car comes down to having a frictionless buying process that results in a good deal and a convenient service experience down the road. Consider this:
It’s not the brand, it’s what you’re willing to offer.
Millennials surveyed—half of them, in fact—are open to purchasing any brand. They’re less concerned with image or status and view cars as practical. In other words, what can you, as a dealer, do to improve the offer/their lifestyle?
They’ll pay more if they’re getting more.
70% of those surveyed said they would pay more for service if it was considered “quality service.” They tend to opt-in for longer warranty packages and want the dealership to take care of their car to keep it in shape. That’s huge!
“Millennials are poised to become the predominate consumption group in the automotive industry, making it key that automakers, dealers and marketers understand how their perceptions are changing the way consumers approach car buying.” - Jessica Caldwell, Executive Director of Industry Analytics at Edmunds.com
Tapping into the mindset of a market that spends more on service, is looking for a valued and trusted auto dealership partner, and is mobile and technology savvy is literally a goldmine. Do your homework with the links below:
Do your homework with the links below:
- Edmunds.com - Millennials Are Busting Car-Shopping Gender Stereotypes, According to Edmunds.com Study
- Forbes.com - Insight: Future Of The Auto Salesroom And How To Sell Cars To Millennials
- EMarketer.com - Millennials Go Mobile While in the Market for Automobiles
- Inc.com - 5 Tips for Selling to the Millennial Car Buyer
- Growwithcars.com - 2015 Millennial Outlook Report
- Dealertrack.com - How to Master the Millennial Market
If you’re not sure about digital retailing yet, well, you must not be selling very many cars. Why? According to Cox Automotive, “nearly all consumers (98%) want the ability to do at least some piece of the car shopping/buying process online.” As a result, it makes sense to include at least some parts of digital retailing technology into the buying experience.
Digital Retailing: The New Test Drive
But just what is it? Surprisingly, many people define digital retailing differently. From a consumer point of view, however, digital retailing includes some or all of these components:
- Take a 360-degree tour of a vehicle
- Apply for financing online
- Learn about finance and insurance products
- Use a chat box to talk with a salesperson
- Reserve a vehicle for a test drive
- Sign contracts online
- Negotiate online
This all boils down to a simple request: car buyers want to start the process online and set it up so that the dealership visit is fast and productive. It’s all about saving time and making life easier for the customer—and your sales team.
If you’re looking for additional ways to improve your customer’s digital retail experience, we suggest that you take these two ideas into consideration.
Your technology stack and website should allow you, and your salespeople, to start deals online. If they do, then you’ve assured that your customers can experience continuous engagement.
The more positive touch points you can have with your customer the more likely you’ll be able to close that final sale. When you think of online engagement think of customer capabilities like payment search, monthly payment calculators, trade-in vehicle appraisals, finance applications, and product browsing. These types of online services are guaranteed to keep your customers engaged in a positive way with your dealership.
The more you allow your customers to do from their computer, the more seamless the in-store deal will be. Try not to think of digital retailing as the “millennial way” of doing business. Think of it as you leveraging technology to enhance your customer service. In the end, that’s exactly what it is. Digital retailing is just a way for your dealership to find better, more efficient ways of communicating with your customers. It’s also getting them to recommend your business to other buyers.
“Retailers have realized that purchases are no longer one-time transactions. Instead, they should be one stop in the journey of the customer as they travel between different channels. Omni-channel marketing and sales enabled retailers to move to a more customer-centric retail model focused on creating a relationship with the customer.” Deloitte, Future of Automotive Study
Here are some valuable insights to improve your dealerships digital retailing efforts:
- Digital Dealer: Stop Chasing Squirrels: The More You Know, The More You Sell
- Cox Automotive: Three Keys to Building a Winning Digital Retailing Strategy
- Deloitte: The Foundation Of Future Automotive Retail
Your dealership’s reputation matters. Online reviews, customer satisfaction rates, and referrals drive repeat business to your dealership. When dealing with a highly charged, emotional buying decision—such as the automotive purchase already is—your entire sales team is treading in dangerous territory if they don’t find ways to improve the customer’s experience. But, according to the 2018 Cox Automotive Emotional Connections Study, customer satisfaction rates drop to 49% during the purchasing process.
“This valley of negative emotions occurs during steps that involve money and paperwork — trade-in appraisal, negotiating deal terms, vehicle financing, and evaluating insurance and add-on products. Compared to other steps, these have the highest anxiety, confusion, frustration or disappointment for consumers.” - 2018 Cox Automotive Emotional Connections Study
PROBLEMS VS. OPPORTUNITIES
The good news about the F&I process is that your dealership is uniquely positions to tackle each challenge as an opportunity. First, everyone buying a car already expects the process to be miserable. This is your chance to “wow” them and improve the experience. You can also:
Invest in training: Professional services can help identify areas where your F&I process lacks the skills to meet your needs and help you reach your goals. According to CBT Automotive Network, “Good training will also help your managers learn what questions to ask and help them feel more comfortable getting to know the buyer and their lifestyle as it pertains to offering the right products.”
Find a better fit: It may very well be that your F&I manager, though highly skilled, is failing to make a connection with their buyers. Since half of your bottom line should come from this department, you need to make a hard decision and find a better fit for this role.
Check out these hiring and retention tips and find the best fit for your F&I manager position with our guide, “8 Ways to Reduce Turnover and Improve Retention.”
OPTIMIZE PROCESS ONLINE
According the previously mentioned Cox Automotive Survey, 83% of respondents want some part of the financing process to take place online. Give your buyers the chance to complete paperwork electronically, online or in-store,reduces the amount of time spent waiting to take their new purchase home. Your customers’ wait time is not only reduced, but you now have more time to spend nurturing the next sale.
BIG DATA BIG OPPORTUNITIES
If you haven’t started building a relationship—and constructing a personal profile on each buyer—before they enter your dealership, you’re wasting everybody’s time. The day you meet a potential customer in person, you should have already done most of the legwork. The reason? According to Autotrader, buyers are doing theirs:
By the time you make it to the F&I process, the more data you’ve collected on each buyer, the faster you can speed through what is already an unpleasantly long and slow end of the day.