Introduction

Imagine you send and receive as many as 3,000 text messages a month, but make and receive fewer than 150 phone calls in that same time. Imagine you read reviews on blogs and other social media platforms before a purchase, instead of asking the opinions of friends or family. Imagine you share virtually everything that happens in your life on Facebook, Snapchat, or Tumblr. Can’t picture it? That’s probably because you’re not a Millennial or part of the iGeneration. Yet these generations are an enormous and exciting opportunity for your dealership; understanding them is arguably one of the most important things you can do to take your business to the next level, and survive and thrive in the years to come. Their numbers make the Baby Boomer generation look tiny, and their spending power is huge: over $200 billion a year by 2017, according to Forbes.

It’s no wonder retailers across the board are spending billions of marketing dollars to get on their radar. The irony is that these generations don’t trust traditional advertising – to them it’s just more of the same old spin. Instead, successful companies have taken the time to know this market and the channels they prefer. For example, AT&T decided to advertise on Tumblr because it reaches both desktop and mobile users. It created a sponsored post with a text message that read, “When you know what you want call me.” The decision to toss aside a traditional marketing message and instead go after a moment many experience in life spoke to these generations and had far reach. Another great example is Tide, which used short mobile videos to boast that its Pods “provide excellent results with minimal time and effort;” a message that speaks to the convenience and ease that many in this generation crave from a buying experience.

When it comes to the automotive industry, too few dealers are following the examples of these innovative brands. Perhaps because many dealers run generational businesses passed down from family member to family member and have little reason to question previous decisions, or because they just don’t know where to start, the auto industry lags behind in appealing to these multi-billion dollar demographics. That’s a problem because these generations are changing the face of vehicle buying and servicing. They are very progressive when it comes to technology, prefer to research and shop online, and come to your dealership armed with pricing information and ready to buy on the first visit. That presents a challenge: how do you get these lucrative generations in your store, and once they are there, how do you keep profits up when you don’t have a lot of room to negotiate on price? The answer lies in understanding what motivates these generations and how they prefer to communicate, shop, and buy; while at the same time, making smart technology investments to root out inefficiencies on the back-end and keep profits high. 

Who Are These Buyers?

To win the business of Millennials and the iGeneration, you first have to understand them. Millennials are commonly defined as born between 1980 and 2000. They are often referred to as “digital natives” due to always having technology at hand. They’ve seen it all when it comes to marketing – consequently only 1% say a compelling advertisement would make them trust a brand more, according to Forbes. They’ve grown up on social media and trust it, to the point where Forbes found that 33% rely on blogs before they make a purchase, and 62% are more likely to become a loyal customer if a brand engages with them on social networks. Research also shows that their values have been influenced by events like 9/11 and the Great Recession; perhaps accounting for why up to 75% say it’s either fairly or very important that a company give back to society instead of just making a profit.

The iGeneration (also known as Generation Z) are commonly defined as born between 1994 and 2004. Like Millennials, they share constant connectedness and are defined by their love of electronic communication and the individualized way they use it (no wonder their name is derived from Apple’s popular products). A 2015 study conducted by Worldcom Public Relations Group partners Schneider Associates and The Pollack PR Marketing Group found that this generation more than any other requires information on demand, and is inclined to trust the advice of “friends” or strangers who share opinions freely on social media platforms.

While most can agree on these facts and characteristics, there’s also been a lot written about Millennials and the iGeneration that is simply untrue. For example, the idea that these generations aren’t interested in owning a vehicle because they are part of the “sharing economy.” In fact, J.D. Power reported that millennials’ share of new vehicles purchased rocketed to 27% in 2014 from 18% in 2010. A recent study from AutoTrader backed-up this growing demand when it found that in the next 10 years, 40% of all new vehicles will be sold to Millennials. It went on to state that in picking cars, Millennials “consider what they identify as ‘practical’ vehicles, yet they aspire to brands they describe as ‘sophisticated,’ ‘innovative,’ and ‘stylish.’” This is exciting news for our industry – these generations are buying cars, and as digital natives looking for practicality with a little style, they are all but telling us how to sell to them.

How Do I Win Their Business?

With these preferences and habits in mind, you can win your share of this lucrative market and gain a steady revenue stream for years to come. Companies marketing the right way to these generations incorporate some or all of the following tactics:

Personalize everything – Many call these generations the “me” generations in part because they want to feel unique. That’s why a hyper-personalized customer experience is so important. A marketing platform that segments your customers and draws on data you already have will help you know your customers and what they need, so you can send timely and relevant sales and service communications.

Connect through social media – These generations live on social media so your dealership should be there too. They expect a Facebook page, Google reviews, a Twitter stream, and maybe even a Tumblr account. Social media offers real-time engagement and is a huge opportunity for your dealership to communicate and connect with these buyers.

Excite with content – Content is a mainstay of the Millennial and iGeneration lifestyle. They are constantly scrolling through news feeds and watching videos on YouTube. In fact, a 2014 Most Memorable New Product Launch survey conducted by Schneider Associates marketing group found that almost 50% of iGens turn to YouTube to learn about new products, compared to only 25% who read emails from brands. Videos, photos, and social media posts go a long way towards turning them on to your dealership.

Use mobile – It’s no surprise that these digital natives prefer a technology-based dealer experience. According to a 2015 J.D. Power study, dealerships that use tablets as part of their sales and F & I process achieved greater customer satisfaction than their old-school competitors. You can incorporate mobile throughout the buying experience – from configuring a vehicle, to payment options, to paperless contracting, menu selling, and after-purchase service appointments. Incorporating technology is a huge plus for your dealership too. The best solutions boost productivity and efficiency, so you can hold down back-end costs, hire fewer people, and do more in less time.

Give back to society – Giving back to their local communities is something dealerships have traditionally done very well. Go to virtually any town and you’ll see the local softball or baseball team sporting jerseys sponsored by the neighborhood dealership. Start talking on your website and social media about how your dealership gives back. Post photos and videos, testimonials from recipients, or other engaging content. These generations will appreciate that you’re not all about profit.

Focus on selling an experience – It’s difficult, if not impossible, to sell purely on price these days when all the information available on the Internet limits your negotiating power. Instead, sell the experience buyers can expect at your store. Whether that’s a completely mobile buying process, a service center that uses license plate scanners to greet customers by name and instantly access service records, or a waiting area with virtual reality vehicle simulators. Whatever you do to surprise and delight your customers should be prominent across your marketing channels.

How Can My DMS Help?

The right DMS can help you deliver the convenient and easy technology-powered buying experience these generations demand, while also rooting out inefficiencies to hold down back-end costs. This is increasingly important as modern buyers, unlike their older predecessors, educate themselves with easily accessible information and arrive at a dealership ready to buy on the first visit. This low-negotiating way of buying affects profits, so the experience you provide is paramount to win sales and loyalty.

Let’s look at the buying experience first. How do you know if you have the right DMS to deliver the personalized, easier, and faster experience that Millennials and the iGeneration demand? Ask yourself these questions:

• Does my DMS allow me to manage operations in every department, communicate with customers, desk deals anywhere, and service vehicles quickly, all from one platform?
• Do I have purchase history at a glance to speed transaction time and create a personalized experience based on stored photos, preferences, and past interactions?
• Do I have efficient, menu-based workflows to speed up the in-store process?
• Can I work with the third-party providers of my choice to take advantage of new innovations in efficiency and functionality?
• Do I have streamlined desking to shorten the sales process?
• Do I have tablet-enabled menu selling for an interactive and enjoyable F & I process?
• Do I have the ability to completely sell a vehicle via mobile devices – including vehicle configuration, history reports, payment options, desking, and menu selling?

Now take a look at your back-end processes.  Do you have the right DMS to increase operational efficiency and hold-down costs? Ask yourself these questions:

• Does my system have an intuitive design and logical workflows to simplify my daily processes?
• Do I have deep-dive capabilities so I don’t have to open multiple screens?
• Can my Sales Manager track and trend deals to coach the team and capture sales?
• Can I manage my inventory and create VDPs on the fly?
• Do I have automated end-to-end processes for invoice approvals and other accounting functions?
• Can I easily access trade, loan, and auction values for quick buy and sell decisions?

A “yes” to these questions is a good indicator that you have a DMS capable of helping you attract and retain Millennials and iGen buyers, and root out inefficiencies that cost you money. Too many “no’s” and it may be time to start researching other providers.

Conclusion

Millennials and members of the iGeneration are a whole new type of buyer – digital natives schooled in constant connectivity who expect from companies the instant information, convenience, and real-time engagement they’ve come to expect from the Internet. Dealerships that take the time to understand what motivates these generations, and create an experience  that appeals to how they prefer to communicate, shop, and buy, will rise to the top and earn business from this lucrative demographic. At the same time, savvy dealers will invest in smart technology to help root out back-end inefficiencies and counteract a drop in profits that results from widely available pricing information. Autosoft is prepared to help dealers capitalize on the huge opportunity these generations hold with an open, dynamic, and intuitive DMS.