By Amy Corr
Reports on the death of Millennials buying cars are greatly exaggerated.
Depending on what research study you read, the future is either bright or grim for automotive manufacturers, which would in turn affect car dealerships.
In actuality, the answer is somewhere in the middle.
“The research is halfway in between,” said Robert Passikoff, Founder and President of Brand Keys, a research consultancy that specializes in predictive brand equity and engagement metrics. “This age cohort [Millennials] is doing things later than other age cohorts. Getting married, moving out of their parents’ house, having kids. They have developed a different schema on how they live their lives.”
Millennials are “waiting,” continued Passikoff, “from a lifecycle perspective. They are waiting for technology to advance until they make a purchase. Millennials have a high intent to purchase; the haven’t rejected car buying yet for Citi Bikes, Lyft and Uber, although environmental issues play a role in decision-making. They are looking for a seamless purchase process; good reviews of dealers; inventory that’s in stock now; environmentally conscious; and low cost.”
While student loan debts and environmental concerns remain points of concern for car-buying Millennials, it hasn’t stopped them from buying cars. A recent survey of American car owners commissioned by Nissan found that sedans are an overall favorite across all demographics, with 86% of 18- to 34-year-olds (comprising of
Generation Z and younger Millennials) who don’t own a sedan would purchasing one now or in the future. The number is similarly high for older Millennials and Gen X (35- to 50-years-old), with 81% interest in purchasing a sedan.
When marketing to Millennials, John Colasanti, CEO of Solve, a Minneapolisbased agency that counts Bentley and Porsche as automotive clients, finds the opposite of a cookie cutter marketing plan.
“There’s no simple answer for a type of creative that works best with Millennials,” Colasanti said. “Especially in the automotive category, it’s important a consistent brand personality is used throughout the vast purchase funnel. At the awareness level, messaging about a brand’s POV and values is key. This can be funny or heart-wrenching, as long as it’s viewed as being authentic.”
“Millennials are more savvy about corporate and brand behavior than ever before,” continued Colasanti. “They need to feel a genuine alignment with a brand before considering it further. Once they connect with a brand, their desire for rational information is strong; in addition to price, they want to know about mileage, emissions, safety, trade-in value, reviews, etc. It’s important to deliver this content wrapped in the brand’s spirit, across the broad media landscape (including national, local and dealer communications). Targeting Millennials is more of a one-to-one connection than the mass awareness approach used for other segments. Connected TV platforms like Hulu and Netflix are generally effective and a big part of the media mix.”
Margot Bogue, SVP, Director of Brand Planning at Cramer-Krasselt, a Chicagobased agency that serves as Porsche’s North American creative agency of record, added that research referencing Millennials should be viewed carefully, with an open mind.
“Everyone has their own agenda regarding research,” said Bogue. “Millennials are later to get their license and get married. They are buying cars and driving more than people think they are driving. It’s a general assumption that Millennials stay put and live in urban areas. In reality, Millennials are moving to the suburbs and having families.”
Results from a 2019 research paper from MIT’s Center for Energy and
Environmental Policy Research (CEEPR) found that “…while Millennial vehicle ownership and use may be lower early on in life, these differences are only temporary and, in fact, lifetime vehicle use is likely to be greater.”
CEEPR’s Research took into consideration variables such as marital status, income and rural vs. urban living; on average, Millennials drive 2,234 more miles a year compared to Baby Boomers.
“These results suggest that the changes in life choices among Millennials, relative to previous generations, is likely to have a trivial effect on vehicle ownership,” concluded the study.
The 2019 Brand Keys Customer Loyalty Engagement Index ranked the order of top-10 car brands preferred by Millennials, and undoubtedly meet their criteria in car buying.
- Kia / Toyota (tie)
For local dealerships that don’t have a national ad budget, how can they best effectively target Millennials?
Let’s start with experiences. A Harris Group study found 72% of Millennials prefer spending money on experiences rather than material things. This means brands and dealerships need to get creative with creative. And they have. Savvy dealerships took notice and are building brand loyalty in ways where the primary focus is not a car/specific model.
Take Ralph Lauren, for example. Bogue maintained that “instead of wearing the brand you can live it by visiting one of Ralph Lauren’s restaurants. Porsche has opened a driving school. Regardless of brand, rethink what it means for experience. How does the brand permeate all parts of life?”
Bogue noted that dealers should host events at a local level. “Make it less about the car and more about the events, DJ, and wanting to participate, engage in, become more social. Dealerships need to reinvent themselves to get people in the door. On a local level, traditional means, print in local magazines. Social… lots of social. Dealer websites have all these pop-ups and people want to talk to you. That’s where they are.”
Lexus of North Miami features spa amenities like manicures, pedicures, waxing, facials, a full-service hair salon and makeup consultations. There’s even an indoor putting green. Consumers will now look forward to bringing their cars in for service. A welcome change to an otherwise cumbersome task.
Passikoff stressed the importance of positive online reviews and social media usage when marketing to Millennials.
“Local dealerships should connect with Millennials via social media,” Passikoff said. “It’s a big thing with this group. Typical behavioral patterns where they look for information. They read reviews first on local dealers. Reviews are important. Social outreach is more important. A seamless process is more important. Make sure you have inventory. Millennials don’t want to wait three weeks for car to show up. Online chats work well. If they haven’t already, local dealerships should incorporate that on their websites. Millennials don’t want buying a car to be difficult.”
Passikoff concluded with the significance of good old-fashioned word of mouth “What do you know and what did you hear about this dealer? Local word of mouth, this is what can kill you locally.”
“If something is unique [personalized] and shareable – Millennials will gravitate to that more than anything else,” considered Christian Gani, Managing Director of Match Marketing Group.
Gani also encouraged dealerships to close the gap between where Millennials are buying cars: a report from MSN Auto that polled its audience found that 62% of Millennials will purchase their next vehicle from a dealership.
“This means that 38% are purchasing from somewhere else, likely in the used market,” said Gani. “If you dig into the current economics of the automobile industry, you’d find that used cars are in short supply at present often making it more economic to look at the new car market. If I were a dealer today, I would demonstrate the value, warranty, security, maintenance costs and personalization options of new cars to further entice this audience to consider new versus used.”
Bogue recalled going back to basics with Millennials when promoting Porsche: “We had to go back to brand story and belief. It’s not known within the Millennial group.”
When it comes to marketing to Millennials, it’s all the experience.