By Michael Trasatti, CEO
Millennials are the next big segment of auto purchasers and are changing the car-buying process. According to www.autonews.com, they will become a serious force in the U.S. car market. TrueCar also reports that Millennials are expected to account for about 25% of the new vehicle market and generate sales of 4.24 million vehicles — the equivalent of $135 billion in purchasing power, which will only continue to increase. In fact, some estimates have them purchasing 75 percent of vehicles by 2025, so it will be important to understand the mindset of this next generation of Millennial car buyer.
Given that Millennials have grown up surrounded by internet-connected gadgets and technology, it’s certainly no surprise that they rely on the internet to inform their car-buying decisions. Industry statistics demonstrate that more than 90 percent of Millennial car buyers begin their journey on the internet. They visit an average of 18 sites, including Google, Facebook and other social media before visiting a dealership. In fact, a study from MTV shows over 80 percent of Millennials find buying or leasing a new car exciting, and three in four Millennials say they couldn’t live without their car. This most important fact should be considered when developing your dealership’s strategic plan.
So what can your dealership do to attract and adapt to this future car buyer? How can your dealership prepare for the future?
One approach is to create a digital marketing strategy that makes your dealership stand out from the competition and implement a different marketing plan for a different generation. Millennials are part of an “always on” culture. They’re comfortable with having overwhelming amounts of information at their fingertips. Getting a seat at this table means offering Millennials insights and perspective from your experience. Remember, the more you can offer these next generation car buyers a sense of empowerment and control over the sale, the higher their satisfaction will be. Your goal is to make the environment as friendly and transparent as possible. Breaking down the traditional barriers at the close of a sale is an important step in that direction.
Let’s be clear, speaking the same language through technology is certainly not a replacement for the time-proven expertise of a good finance manager. Technology in the hands of a skilled F&I salesperson will help empower the customer and create an immersive experience that will illustrate the benefit of the products you’re selling. Ultimately, these actions will improve your CSI scores while your dealership also builds lasting relationships.
The automotive industry has proven it takes a while to make whole scale changes. However, progressive, forward-looking dealerships, the ones that have a plan to cater to the Millennial buyer will thrive and succeed, especially as it relates to F&I. The processes and presentation must change to successfully sell to the Millennial buyer. Technology is critical to breaking down the barriers and crucial to the success of the Millennial’s car-buying process. Those dealerships jumping on the technological bandwagon and using a cutting-edge DMS, one that integrates new technology and evolves with the same speed to meet the needs of the Millennial buyer is one aspect of staying on top of the game and leading the pack to the future.