Millennials, born between 1981-1996, are moving toward car ownership and there are many economic, social and technological influences at play on this generation, that are quite different from the previous generations.

Here are some important considerations to take into account when marketing and selling to millennial car buyers.

1. SOCIAL MEDIA

This generation has grown up with social media so they are highly influenced by posts online from friends, celebrities, influencers and others.

Posts by others can highlight the best and most premium products, services and customer experiences. In some instances millennials will spend on something they hadn’t planned to buy, because of what they saw online. This generation will spend money on products and services that enhance their image or social standing, like the latest cool sneakers or upgrading to premium for the cinema or airline seats.

For vehicles, this is reflected in the sales of luxury cars. Sales of new vehicles in this category nearly doubled in Australia between 2012 and 2018, growing from 6.5% to 11%, or around 60,000 cars.

There are aspirational vehicles for millennials at every price point, which is evidenced by the success of cars such as the Mazda 3 and Fiat 500.

2. BIG DEBT AND NEW EXPENSES

It’s not just the car, but more the price that may impact car ownership. Value for money in terms of specs and features has really improved with many brands.

In the USA however, high student debt and cost of living, has impacted the purchase of new cars. There are many additional lifestyle choices that rank more highly than new cars, such as the latest smart phone or streaming subscriptions.

There is also a new trend for millennials  to use alternative payment lenders or deferred payment options allowing them to capitalise on the need for immediate gratification.

3.  FRICTIONLESS TRANSACTING

The Deloitte University Press study, “The changing nature of mobility” found that millennial drivers value the customer experience three times as much as vehicle design.

Millennials expect a smooth and frictionless transaction, similar to an online experience. However, as a significantly more important purchase, representing possibly the second highest value item a millennial may purchase, the process may be stressful and confusing. The touch element for buying car is still very important, but must flow smoothly from the online searching step.

Not surprisingly, the younger the buyer, the bigger drop in buyer satisfaction, which can be attributed to things like paperwork and long negotiation.

Tips to better engage millennials

1. High quality photos and video

Instagram and Facebook mean that millennial buyers expect high quality photos that connect emotionally. Dealers can now upload video to their listings on carsales.com.au, bringing the car to life building excitement and connection.

2. Message instead of dialling

Millennial buyers prefer to interact by messaging rather than phone calls, as they often view negotiating as daunting. SMS enquiries should be treated as seriously as phone and email, and buyers that enquire via this channel will expect an even faster response.

3. ‘Drive away’ pricing

Upfront, “drive away” pricing that is close to the fair and reasonable sale price, aligns with how millennials want to buy a car, rather than building in back and forward negotiation. 35 per cent of millennials say negotiation makes them stressed, while 45 per cent say they’d prefer to avoid it entirely.

4. Transparent borrowing

The changes to flex commission rules gives rise to an opportunity to increase rate transparency which may help increase finance penetration rates. Interestingly the volume of new car finance at Australian dealers is less than half of that in the USA so dealers are encouraged to provide transparent and easy-to-understand finance rates.

Source: http://autotalk.com.au/industry-news/millennials-cars

27 May 2019