For decades, there was a traditional automotive dealership model throughout America, one that was standardized and replicated no matter how large or small the dealership may have been. A cookie-cutter approach to print, television, and later online marketing, as well as a formula to follow once a customer set foot into the showroom was the norm. It was direct. It was loud. It was sometimes aggressive. And it got the job done.
However, what was effective fifty, forty, or even ten years ago, is quickly losing its ability to attract new customers and close deals. The one-size-fits-all marketing tactic has begun to fall flat with the younger generations whose approach to making important purchasing decisions such as a new vehicle has become far more involved and thoughtful than simply, “I want a shiny new car.”
But, again, it is no longer about developing a blanket approach to your marketing strategy that you can apply to everyone, young and old. To effectively reach multiple sectors of the population, your marketing must be flexible, fluid, and conscious of what is important to each sector. In this blog we’re going to highlight three of the generations with current buying power: Gen X (born 1965 to 1980), Millennials (born 1981 to 1997), and Gen Z (born 1998 to 2012).
Over the past few years, the industry has seen a decrease in Gen X customers. This is largely due to financial struggles, as well as growing job uncertainty and inability in certain sectors to advance enough to keep up with inflation. Due to this Gen X consumers often adopt the following tendencies and habits when it comes to larger, life-changing purchases.
• Gen X consumers will spend from several hours to days researching the product they intend on purchasing – Google and other reviews are very important.
• Quality, endurance and dependability of a product is extremely important – they do not have the money to constantly repair or replace an item.
• While not as “brand loyal” as their parents, the Boomer generation, they do generally tend to stick with a brand they feel they can trust. Emphasis on TRUST. Once the trust is broken, it’s extremely hard to get their business back.
• But they are short on patience and quick to walk away from an uncomfortable purchasing experience – they do not like high-pressure sales.
• Customer service is at the top of their list.
• They hate spam, but do tend to pay more attention to email blasts mentioning sales or Discounts.
• Tend to hold onto a car until it’s paid off, and then for several years after that – they need a sound reason to have to buy a new car.
In addition to the Gen X customers who are more cautious and hesitant to make large purchases, research has shown that the Millennial generation have also drastically slowed their overall purchasing habits. A few of the reasons for this trend are:
• Financially unable to afford to purchase a car due to soaring costs of living.
• Concerns about financial stability for the future – they may be able to afford a payment now, but what about six months from now?
• Many have grown up utilizing rideshares and now either still prefer rideshares, or have begun sharing a vehicle with friends or a family member to save money.
• Millennials have a sense of “dread” about the idea of confrontation with high-pressure salespeople.
• They are waiting to see what the trends will be between gas and electric vehicles – if the future truly is all electric, they would prefer to wait until that is more viable and affordable.
• They are, overall, downsizing their lifestyles with a segment moving towards the “van life” due to soaring costs of rent and real estate.
• They place great importance on the brand behind the product – is the brand doing good in the world and being environmentally conscious? Is it not tied to corrupt organizations or politics, or any other negative impacts on the world, etc.?
• They want a brand that is about positivity and improving society and the environment.
• Personalization is essential – whatever vehicle they buy should be as individual as they are.
Surprisingly, Gen Z is now emerging as one of the top purchasers of new cars. This is an important segment of the population to focus your marketing efforts on, but what exactly are Gen Zs looking for in a brand? And why?
• Gen Z does not remember a time before computers or social media.
• They are EXTREMELY savvy when it comes to finding the best deals online.
• They will do nearly all research online before making a purchase.
• When they do purchase, they are more likely to order a car online and have it delivered than engaging with a dealership, etc.
• You must provide a seamless, fluid, and extremely transparent financing process online.
• Gen Z wants to be IN CONTROL OF THE DEAL. They make the rules – not the salesperson.
• They will shut down and go elsewhere if they sense dishonesty or price swapping.
• Gen Z is the “woke” generation – they research a company’s values as much as they research the car they are looking to buy.
• They are NOT loyal to brands.
• Social engagement, community involvement, and social causes are very important.
• If they can’t feel like their purchase has done something good for the world, they won’t make it.
This post sums up the overarching purchasing habits of the three of the primary consumer segments in the automotive world currently. In some of our future posts we will begin talking about how this research can translate into actual marketing and advertising efforts you can implement in your dealership, as well as how it applies to your social media engagement.