Automotive Marketing: Millennials Won’t Buy Cars? That’s Not Actually True.

DCG News –  July 9, 2019

By Amy Corr

Depending on what automotive marketing research you read, the future is either bright or grim for automotive manufacturers and the dealerships that sell their products.

In actuality, the answer is somewhere in the middle.

“The research is halfway in between,” Robert Passikoff, founder and president of research consultancy Brand Keys told DCG News. “This age cohort [Millennials] is doing things later than others: getting married, moving out of their parents’ house, having kids. They have developed a different schema on how they live their lives.”

From a lifestyle perspective, Millennials are waiting, noted Passikoff. They’re waiting for a seamless purchase process that includes good reviews of dealers, inventory that’s in stock now and low cost. And while they are more environmental-minded than their parents’ and grandparents’ generation, they haven’t yet rejected car buying in favor of Citi Bikes, Lyft and Uber.

While student loan debt and environmental concerns remain points of concern for car-buying Millennials, it hasn’t stopped them. A recent survey of American car owners commissioned by Nissan found that sedans are an overall favorite across all demographics, with 86 percent of 18- to 34-year-olds who don’t own a sedan indicating they would purchase one now or in the future. They do, however, want to be marketed to in a different way.

John Colasanti, CEO of Solve, a Minneapolis–based agency that counts Bentley and Porsche as automotive clients, told DCG News that younger car shoppers won’t respond well to a cookie-cutter marketing plan.

“There’s no simple answer for a type of creative that works best with Millennials,” he 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 authentic.”

Millennials are savvier about corporate and brand behavior than older generations, noted Colasanti. They’re looking for a genuine personal alignment with a brand before they consider purchasing. 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 and more.

“It’s important to deliver this content wrapped in the brand’s spirit, across the broad media landscape, including national, local and dealer communications,” said Colasanti. “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.”

Ignore the Stereotypes

Margot Bogue, senior vice president and director of brand planning at Cramer-Krasselt, a Chicago-based agency that serves as Porsche’s North American creative agency of record, added that research referencing Millennials should be viewed carefully and with an open mind rather than stereotypes and assumptions.

“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 versus urban living. On average, Millennials drive 2,234 more miles a year than 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.

Market Experiences to Millennials

For local dealerships that don’t have a national ad budget, it’s important to direct marketing efforts carefully. Research conducted by Harris Group found that 72 percent of Millennials prefer spending money on “experiences” rather than material things. This means brands and dealerships need to get creative with their creative. Bogue noted that smart dealerships are building brand loyalty in ways in which the primary focus is not a specific vehicle model, but a lifestyle image. This might include sponsoring local events.

“Make it less about the car and more about the events, the DJ, and wanting to participate, engage in, become more social,” said Bogue. “Dealerships need to reinvent themselves to get people in the door.”

This means more social media, and more services that create a brand experience. Lexus of North Miami, for example, features spa amenities such as manicures, pedicures, waxing, facials, a full-service hair salon and makeup consultations, and even maintains an indoor putting green. The goal is for consumers to look forward to bringing their cars in for service.

Passikoff stressed the importance of positive online reviews and social media usage when marketing to Millennials. Dealers should connect with Millennials via social media and direct them to reviews and information about how to make the purchase process seamless, as well as the dealers’ solid community relationship. Millennials like to engage in messaging with vendors, so be sure there’s a chat function on your website. Also ensure that you have the vehicles they want to look at.

Make sure you have the inventory,” added Passikoff. “Millennials don’t want to wait three weeks for car to show up.”

Focus on Social Media

Millennials rely on social media for more than just chatting with friends. They will also seek advice and recommendations there, so all marketing efforts should be shareable by the dominant social media companies such as Facebook, Snapchat and Instagram.

“If something is unique [personalized] and shareable, Millennials will gravitate to that more than anything else,” Christian Gani, Managing Director of Match Marketing Group told DCG News.

Gani also noted that dealerships need to work to pull more Millennials into their stores. A study by MSN Auto found that 62 percent of Millennials will purchase their next vehicle from a dealership.

“This means that 38 percent are purchasing from somewhere else, likely in the used market,” he said. “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 economical 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 noted that Porsche’s tactic is to go back to basics with Millennials.

“We had to go back to brand story and belief,” she said. “It’s not known within the Millennial group.”

When it comes to marketing to Millennials, it’s less about making assumptions and more about providing an ownership experience.