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No doubt about it: the patterns of car buying and car ownership have changed. Six years after the Great Crash of 2008, the wobbly recovery still hasn’t found its way into most consumers’ wallets. The result? Older cars are spending a longer time on the road before being replaced. The reason? Changing consumer demographics. New car ownership, once the ultimate baby-boomer status symbol, has become insignificant among the younger generation, with the 18-to-34 crowd preferring to spend their $200 billion in annual purchasing power on high-tech gadgetry rather than a new set of wheels.
Faced with an extended bout of unsettled economic times plus a generational shift in consumer habits, many auto dealers find themselves at a loss as to how to respond. In today’s blog, we’ll discuss how dealers can thrive and benefit from longer-term car ownership, by uncovering the trends and discovering what is truly fueling them and staying on top of what is in your control: satisfying customer need.
The Greenest Generation
Granted, auto dealers don’t have the power to change these trends alone, but that doesn’t mean we have to be at their mercy, either. The first step: Understanding. The reluctance of the 18-34 demographic to invest in auto ownership is not just about an appetite for smartphones, but that it also has preference for “green initiatives. In a recent survey, 76% of Millennials considered the ecological consciousness of brands to be very important, and most of those surveyed would be willing to pay more for a product if they knew they were investing in an environmental cause.
So, how do you target this wired, eco-conscious market? Hybrids are an obvious answer, of course, but what about other types of vehicle ownership? Cars are increasingly being driven by multiple owners, so how can your dealership market to the burgeoning car-share market? Now, you can provide the best of both worlds, by advertising those features of your brands that bring this generation’s coveted connectivity into the car itself and offering alternatives to traditional car ownership? By informing yourself about these trends, you can make smart, targeted marketing decisions that will get you riding the generational wave pipeline, rather than getting left behind, surfboard in tow.
Long-Term Loans and Customer Need
The average car on the road today has been in service for nearly 12 years and the term of the average auto loan has swelled to 72 months, up a full six months from just two years ago. Not surprisingly, refinancing terms have gone in the same direction. On the surface, this should spell bad news for auto dealers: more older cars on the road mean fewer new cars being sold. And again, this trend is not something you can control.
But what is entirely in your hands is the response you choose to make to customer need. This means running targeted marketing campaigns that address consumers as individuals, using modern data tools to anticipate their needs and make proactive offers. It means creating customer loyalty over the long term by providing great customer service that extends for the life of the dealer-client relationship. And finally, it means cultivating a wide net of local contacts that can buck any downward trends that may arise on the national or international level. If Tip O’ Neill was right that all politics is local, then why should that be any less true for auto marketing?
Focusing on What We Can Change
In the auto marketing world, as in life, the key is to be able discern what is truly within our power to change. Generational changes are not in our control, but a creative, ecologically sensitive response to them is. Global downturns are not in our control, but our choice to build local, recession-proof networks is. By making this very important distinction, we are freeing time, energy, and resources to devote to what is genuinely important, empowering ourselves to create long-term, sustainable sales, whatever the external circumstances may be.