Generation X is at peak buying power with the lucrative Millennial generation not far behind. Marketing to both of these generations is a smart, long-term play. However, another big buying group is ready to give its predecessors a run for their money: Generation Z.

Born between 1995 and the mid 2000s, Generation Z accounts for slightly over 20 percent of the US population and holds around $44 billion in buying power. Sure, many of this generation are teens and tweens. Why market to them now?

Turns out, they have a lot of power: up to 73 percent influence how their parents spend money on household goods and big-ticket items. Plus, they’re digital natives. They navigate online channels much better than their parents and grandparents, so they often run the show from product evaluation to purchasing methods.

They are also inching closer to peak buying power every day. Develop marketing and engagement strategies now so you can attract this generation as they develop habits and brand relationships that they may take into adulthood.

Like the generations before them, Gen Z has their own set of retailer expectations and unique way of shopping. How can you build a strong brand relationship with this new crop of consumers?

Market where they spend their time. YouTube is their platform of choice to be entertained or cheered up, according to a survey by Google. But that’s not all. 80% say YouTube has helped them become more knowledgeable about a product or service. Create a YouTube channel with videos that are entertaining and informative for a wide-range of consumers. A video about what to expect from your financing department is helpful when researching with parents. A video offering driving tips or how to get a license in your state appeals directly to Generation Z and sets you up as a trusted resource. The ideas for videos are endless. Use your imagination and don’t be boring!

Offer mega-mobility. It boggles my mind that even in our current age of COVID-19, so many dealers still don’t have digital retailing tools that are optimized to every device. You’re especially missing the boat with Generation Z if you’re not giving customers all the information on their smartphones that they need to make decisions. Along with digital retailing, they need to be able to access videos and interact with your dealership quickly from a mobile device. Video and text is where it’s at.

Build a dealership app. Some forward-thinking dealers have an app for their stores that every customer has access to. Customers can do multiple processes through it, including texting salespeople, watching vehicle videos, and scheduling service. The dealer can also push out messages like a “happy birthday” or notifications about service specials. Including games is a great way to get those younger Generation Z’s involved, too. I play a game with my kids when we’re driving where we count motorcycles. It gets them to focus on the road so that when they start driving they’ll be conditioned to be aware and cognizant of what is going on around them. Get all this relevant, interactive content in one app and you become the go-to source for the whole family. Building an app takes some technical training, but more open source app building software on the market makes it easier and cost-effective. Here’s a good review of the best free app builders.

Explore community partnerships. Community partnerships can be a great way to get your brand in front of a younger audience. How about partnering with a driving school? You promote their services and they promote yours. That’s a great way to build relationships with teenagers and their parents. Or take some marketing dollars and invest in your local high school. Both driver’s education classes and mechanics classes are sorely needed but often the victim of budget cuts. Help a school bring back those programs and you’re the “car guy” for future generations. Dealers recruit for mechanics; why not recruit for drivers? As this Washington Post article argues, bringing back driver’s education could be just the thing to get teens behind the wheel, and into your dealership.

Generation Z is on the cusp of peak buying power. Start putting in the work now to meet their expectations and win them over. Embrace technology and forge meaningful community partnerships to provide quality content that will inspire loyalty in this key demographic.

The New Year is shaping up to be a good one for dealers. According to a report by the Economist, new car sales will be up by 15 percent in 2021.

I think we’re all happy to have 2020 in the rearview mirror. Now it’s time to refuel, refine and ride into stellar sales numbers. Get every department in your dealership in tip-top shape and drive into profitability with the following five tips:

Tip 1: Market to new audiences

This year, commit to reaching new audiences. Millennials and Generation Z (those born between 1993 and 2007) are rapidly gaining buying power. Generation Z alone is estimated to have direct spending of up to $143 million, according to research company Frost & Sullivan.

These digital natives prefer to do their vehicle research on YouTube, and spend their days using apps like WhatsApp and Snapchat. It’s smart to add these channels to your marketing mix. When it comes to messaging, authenticity and transparency are critical to them. They don’t want to be sold, they want to be informed. In their minds, your role is a consultant, helping them to find the best vehicle for their needs.

Many dealerships are outsourcing their marketing, which makes a lot of sense. An outsourced firm has many employees with different ideas and skill sets who can help to vary your marketing messages for different audiences.

Tip 2: Manage leads with an outside BDC

Furloughing staff helped keep profits up during the pandemic shutdowns. At the same time that stores were running lean, online and phone leads spiked. It’s likely that leads fell through the cracks.

If your on-site employee numbers are down and you are struggling with lead management, lean on an outside BDC. A professionally trained automotive BDC can expertly handle an influx of leads, as well make CSI and service calls. All lead information flows into your CRM so your salespeople can spend time closing the best opportunities.

Outsourcing is also a solid cost control move because you don’t have to pay high employee wages plus benefits. Yet, you get all the benefits of a professional team who will work long hours and never call in sick.

Tip 3: Sell with digital retailing

The pandemic proved that shoppers are ready for rapid digital change. Dealers with digital retailing tools experienced a spike in activity that’s likely to stay. It seems shoppers like to search inventory, take a 360-degree walk-around, review all pricing options and get trade-in information, without stepping foot in the dealership. Yet only 15 percent of dealerships offer this online experience. Digital retailing tools that offer “the Carvana experience” and seamlessly interact with salespeople to create quick and accurate quotes are needed badly. Dealers who continue to insist that shoppers come into the store will lose out to more forward-thinking competitors. 

Tip 4: Build your service techs

As of late June, vehicle travel steadily ascended to pre-pandemic levels as most states and municipalities reopened. It follows that dealerships all over the country were, and continue to be, flooded with repair work. That’s a problem if you need additional service technicians. Techs  are increasingly hard to come by, and hard to keep due to cutthroat competition.

The answer is to build your own technicians. Hold an event or volunteer to speak at a local high school. Bring in someone young that you can train in your core values and processes. Then value them for their work. Younger generations thrive on praise and positive reinforcement. Hold daily or weekly meetings to talk about wins and single out top performers. Competitive pay plus recognition can stop attrition in its tracks.

Tip 5: Train employees to wear multiple hats

Leaner operations likely mean employees are wearing multiple hats. You may have a service marketing person taking over sales marketing. Or a service advisor who’s now in the service drive. Don’t throw these employees to the wolves. Offer some type of training so that employees don’t get frustrated, and so that customers receive a uniform experience. Consider job shadowing or informal one-on-ones. Always reward good work with some kind of recognition since you are asking employees to go above and beyond.

Wave goodbye to 2020 and get every department ready for a profitable New Year with these five tips. The dealerships that learn from the events of last year and adapt will survive. Be one of those dealers!

Remember when industry experts were predicting that millennials weren’t interested in owing vehicles? Turns out, they were wrong. The millennial generation with close to 80 million members is expected to account for 40 percent of all new-vehicle purchases over the next ten years, according to research by Deloitte.

All of those vehicles will need service. That’s a huge opportunity for dealership service centers – but only if they can create a pro-millennial experience.

Millennials aren’t like the generations before them. They are digital natives, and therefore more informed. They are also more cautious, thrifty, and skeptical – especially when it comes to an industry with a less than stellar reputation. To earn their business, you have to convince them your shop is different – in every way. Otherwise, they’ll skip your service drive.

When I was the Fixed Operations Director at a store in Washington, I was able to grow our millennial customer base. Here’s how:

• Make your service department fun. You have to make your service department experience fun to get millennials to come back. Get rid of the drab 20-year old couch and blaring TV. Offer tablets with WiFi in the waiting area, good coffee and an assortment of snacks and drinks. Put on a current music channel that appeals to a younger generation. Don’t eat at your desks or allow staff to smoke outside and then walk in smelling like an ashtray. Put on what we used to call “the Disney show.” That means big smiles, a friendly greeting and a welcoming presence.

• Put transparency first. Millennials will price out services and they won’t bother with a dealership that tries to hide costs. Not only that, but if they’re dissatisfied, they’ll take their opinion to the internet. They also won’t just take your word when it comes to needed repairs. Invest in a mobile, multi-point inspection tool with photo and video capabilities. This way you can show them what needs to be done, instead of telling them. Explain the process they can expect once they are in your shop and be as precise as possible with time estimates.  All of this will help build trust so that you’re top-of-mind on their next visit.

Unless you show them proof, your millennial customer may think that you’re trying to push work that doesn’t really need to be done. Conducting a multi-point inspection every time helps you engender trust and reduce skepticism. For example, let’s say last time the customer came in, their tires were worn but not in the danger zone. Now they’re back in your shop and the tire treads are in the red danger zone. You prepared them by being transparent and open last time. This information is not a shock so they are more likely to approve new tires.

• Streamline with technology. 86% of millennials expect an integrated, seamless experience where they are effortlessly moved between smartphone, computer and physical store. The ability to easily schedule an appointment online, receive service reminders and updates through text, and pay the bill virtually will all resonate with this generation.

• Consider one point of contact. This may be controversial, but consider implementing a single point of contact service model. The same person checks in the customer, walks them through the inspection, delivers updates and handles payment. This can help with the cloud of misconception over many dealerships that employees will push every service and repair under the sun. Interacting with one person using a transparent inspection process helps take away that cloud and builds trust.

• Market using social media. You can’t count on email or old-school advertising to reach millennials. They are on social platforms like Instagram and TikTok. Most stores don’t market there, so you have an opportunity to really stand out. However, don’t be pushy. Nothing turns millennials off more than a hard sell. Instead, play around with service teaser posts that talk about your shop without looking like you’re trying too hard. Here’s an example of how Starbucks teases their audience by introducing seasonal drinks without trying to force people to buy.

Think outside the box for ways to get customers to advertise for you. For example, our service department used to pull a list each month of the top five spending customers. We sent these customers a bobblehead or another trinket for a local sports team as a thank you. The majority would snap a photo, post to Instagram or another social platform and tag our dealership. That type of advertising goes a long way and it’s inexpensive.

• Implement loyalty programs. There’s a common perception that millennials aren’t loyal, but that’s definitely not true. The difference is, they want you to earn their loyalty. A study by Accenture found that 95% of millennials want brands to actively court them with personalized, targeted promotions and discounts.

When creating promotions think about what’s important to millennials. Many are socially aware and want their dollars to do good in the world. One promotion that worked for us was donating a portion of every repair ticket to a rotating list of non-profit organizations. Pick three organization per month and allow customers to choose which receives a portion of their payment. It’s an easy way to give back and differentiate your shop from competitors.

Millennials have massive buying power and they’re entering the vehicle market in droves. Now is the time to re-think your service department to prove to these savvy, digital natives that your shop is different. The reward will be loyal customers for years to come.