Five Ways Dealerships Can Win Millennials

Sep 07, 2017 | | 72 |

Five Ways Dealerships Can Win Millennials

By Grace Wepler

Millenials are turning to the internet for everything from groceries to furniture and even to find their next date. Needless to say, they spend a lot of time online. A large portion of their time online is spent doing research and getting recommendations on digital channels, such as Google, review sites and social media. Millennials are also unique in their expectations of the shopping experience: they expect authenticity, transparency, personalization and convenience and crave a good deal -- but they are willing to spend more on brands with integrity. Given their unique shopping habits and needs, it will become more and more important for retailers to adjust, especially as Millennials now represent a quarter of the U.S. population and $200 billion in annual spending.

The same could be said for the retail automotive industry. The results of CDK Global’s Millennial Automotive Purchasing Study suggest that a many Millennials are not happy with the current car buying process: 63 percent felt their recent dealership experience was negative. Slow processes, unfair and inconsistent prices, lengthy negotiations, lack of transparency and pushy salespeople were some of the recurring issues Millennials had with dealerships.

So, how can dealers modify their strategy to better meet the needs of Millennials? Here are a few tactics dealers can use, both on and off line, to attract this demographic.

Focus on Needs-Based Marketing Communication

More than anything else, Millennials need a car for convenience. For most Millennials, especially older ones, the need to buy or upgrade a car is triggered by a major life event. Primary marketing communication should focus on the practical benefits of owning a car. This could include emphasizing convenience features such as fuel economy, reliability, cargo space or added legroom for piling in friends for that all important road trip.

A significant portion of younger Millennials we spoke with want their cars to be a symbol of their professional accomplishments. To appeal to this group, dealers should also focus marketing efforts around the sense of enhanced social status that comes along with owning a car and how their new car will make them stand out among their peers.

Social Media Marketing and SEO Hold the Key

Dealerships need to revisit their marketing and advertising spend strategies to ensure they are giving adequate spend to Search Engine Optimization (SEO) and digital marketing. It is important for a dealer to implement SEO so they appear on the first page of a web search, or they risk losing the lead forever. Terms such as “Best car under 20K” or “Top value car” are popular among Millennials and should be included on VDP pages and in vehicle marketing.

It is also no surprise that Millennials are heavy users of social media. Dealers should consider developing digital marketing strategies to target specific segments of Millennials, such as personalized social media ad campaigns or paid Instagram posts based on major life events.

Five Ways Dealerships Can Win Millennials

Reputation Plays a Big Role

When it comes to car shopping, digital recommendations have put millennials in the driver’s seat. It is important for dealers to build an online reputation strategy that they can integrate into marketing activities, such as displaying customer reviews in online and offline advertising, brochures or in-store displays. Your reputation strategy should also include engaging with reviewers, even the negative ones.

Develop a Customer Centric Digital Storefront

Sixty percent of millennials reject automakers who have a poor website. Dealerships need to have a digital storefront that is up-to-date and easy to use for Millennials.

  • Websites must be clean and user friendly: It is important that your website appears sophisticated to Millennials - clean, free of pop-ups and easy to use.
  • Update your information regularly: Ensure that your website is up-to-date and integrated with in-store information.
  • Mobile-friendly is a must: Given that Millennials do most, if not all, of their shopping and research on their mobile device, dealers must have an engaging and mobile-friendly site.
  • Chat and text options : Eighty-five percent of Millennials indicated they would prefer to first speak with a dealership via an online chat tool or text. These tools should be connected to a person that can answer specific questions about vehicles and the dealership.
  • Pricing and financing calculators: A car pricing and financing tool puts an information-hungry Millennial in the driver’s seat, allowing them to discover the best pricing based on factors they plug-in themselves.
  • Display upfront, fixed pricing: Seventy-percent of Millennials would prefer to see a fixed price for car models across dealers’ information channels. Profit can be made up with relevant add-ons or service warranties, which Millennials are more comfortable discussing and negotiating.
  • Online deal structuring: Millennials value brands that enhance their lives, and a dealership that allows them to start the car buying process online would reduce the number of dealership visits and inherently save them time.
  • Customization options: Dealerships should consider adding online vehicle configurator or customization tools. Millennials want a vehicle that reflects their individuality.

Create a Stress-Free In-Store Experience

The interaction with the salesperson plays the most influential role in making or breaking a deal for Millennials, with 95 percent citing the attitude of the salesperson as the number one reason they had a negative dealership experience.

  • Focus on a “Peer” Relationship: Seventy percent of the Millennials we interviewed indicated they would prefer talking to a salesperson of the same age group. Dealerships need to create an environment where salespeople treat millennials as peers and speak their language.
  • Move Away From the Traditional “Sales” Role to that of an “Expert”: Millennials often come prepared, and have very specific questions from their research. Salespeople should be trained to be both car geniuses and financing experts.
  • Avoid Aggressive Sales Tactics: Millennials are extremely intolerant of high pressure sales tactics. Dealership employees should focus on a cost-benefit approach.
  • Five Ways Dealerships Can Win MillennialsCreate a Transparent and Collaborative Price Discovery Experience: Among the consumers that we spoke with, car shoppers of all generations felt the use of high pressure sales tactics was a top negative influencer when deciding which dealership to purchase from. Dealers should try to focus on a transparent and collaborative price discovery experience instead of price negotiations. This process should begin well before Millennials ever step foot in your store, by allowing your customers to discover the price on their own through an intuitive and flexible online tool.
  • Use Digitized Processes: Dealership employees need to employ a more digitized process during the sales and F & I processes. Millennials would rather work with dealers on an iPad or tablet to complete and sign forms, scan their personal items, discuss specification sheets or add-on options.

As outlined above, winning over Millennials does not mean dealerships need to completely overhaul their current process. Making just a few, strategic changes in your digital and in-store processes could mean big changes in how well your brand resonates with the next generation of car shoppers.

GRACE WEPLER
Grace Wepler is a Senior Market Research Analyst at CDK. For the past 11 years, she has been conducting market research across a wide range of industries and demographic groups. She enjoys the psychology that is involved in conducting her research, using data to better understand the “why” behind the decisions people make. In her free time, Grace loves spending time with her husband and two-year-old son exploring Southern California.

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