Did you know that Baby Boomers are no longer the largest generation in the U.S. workforce? As of this year, Millennials (or Generation Y) have taken that spot according to the Center for Generational Kinetics. This also means that Millennials are now the largest generation of consumers.
If you remember the headlines from a couple years ago, everyone in the auto industry was concerned with Millennials simply not wanting to buy vehicles. Headlines abounded with articles discussing the migration to urban centers with walkable commutes, the rise of ride sharing, and the “inevitable” doom of personal ownership. All these fears turned out to be unfounded when it turned out that the reason Millennials weren’t purchasing vehicles was not because they weren’t interested in owning their own vehicle, but rather because they simply couldn’t afford the purchase.
Now, however, times are changing. This demographic is getting older and settling into careers. Their debt-to-income ratio is becoming more balanced. However, that’s not to say that this demographic is as well off as their Baby Boomer parents were at the same age. According to Northwestern Mutual’s 2018 Planning & Progress Study, those Millennials between the ages of 25 and 34 have an average of $42,000 in debt. In addition, more than 44 million Americans are saddled with student loan debt averaging $33,000.
This means that those Millennials in the market for a vehicle will still be very budget-conscious, and dealers need to be prepared to work to secure less expensive vehicles for this demographic now, to sell them more expensive vehicles later.
According to Entrepreneur.com, more than 50 percent of Millennials say they are extremely loyal or quite loyal to their favorite brands. This is largely due to the link between branding and identity. Since the 1970s, psychologists have theorized that brands help people reduce discrepancies between their actual and ideal selves, increasing their self-esteem. For example, all vehicle advertising speaks to the fact that consumers buy certain makes and models because they want to be the type of people who own those vehicles.
In the recruiting sphere, Millennials want to work for brands that share their same ideals. Ask the following questions honestly:
- How quickly does my dealership respond to consumer reviews?
- Do I have more positive or negative reviews online?
- Is my team antagonistic or understanding when responding to negative reviews?
- Are my team members rewarded for being cut-throat or for being collaborative?
- My marketing messages say that my dealership is active in the community and is a family business, but when was the last time I helped raise funds for a community project or gave my team a day to for volunteer work?
All of these questions point to what your real brand presence is in the market. To this new generation, marketing messages hold little to no weight. What matters are behaviors and actions. We all know the phrase, “actions speak louder than words”. So, determine what your actions are and utilize them to get Y-lingual®, because that’s how Millennials will view your dealership.
With more than 40 years helping dealerships overcome the challenges of the day, EFG Companies knows how to equip your dealership to cultivate profitable opportunities with the growing Millennial market. Contact us today to find out how.