Compliance and the drive toward a digital sales and F&I process were top-of-mind at September’s Industry Summit, but something else seemed to creep into most discussions: Millennials. And the more I heard recommendations on how to connect with this demographic, the more I wondered if our industry has stumbled on the very reason we get a bad rap.
There was Peter Chafetz’s declaration that the Millennial buyer “is going to revolutionize the way you do business.” The Allstate Dealer Services executive said we need to learn what motivates them, that F&I managers need to cut their spiel in half, stick to the facts, make them laugh, and ditch those stuffy presentations.
“It’s got to be fun,” he said. “It’s got to be genuine.”
Hey, this Gen Xer wants fun, and I’m sure you Baby Boomers wouldn’t mind it, either. But I do appreciate the discussions these younger generations have inspired, because Chafetz is right: This 80 million-strong group, which will spend more than $200 billion annually by 2017, is changing the face of retail.
But David Robertson of the Association of Finance & Insurance Professionals was also right when he noted, “It’s easy to be a Millennial when you’re out of college living in your parent’s basement.”
Hey, the oldest Millennials were just 27 when the Great Recession hit. That’s why, as “Mad” Marv Eleazer pointed out during one session, they can’t qualify for vehicle financing with terms beyond 60 to 72 months, which is a problem considering today’s record transaction prices.
But as the most educated generation in history, Millennials stand to earn a lot more over their lifetime than past generations, which is why they’re getting so much attention.
And this group does like to shop. Problem is, half of the Millennials surveyed by The Intelligence Group said they like to browse without intent to buy. That’s why conversion rates are lowest among this group, at least according to research firm NPD Group.
But here’s something to consider: According to Annalect, 52% of the Millennials the data analytics firm polled said the technology a brand uses is the most important factor when making a purchase. What they want is a smooth transition from what they do online to a retailer’s showroom. But we all know that. And, hey, this Gen Xer wants that, too.
I asked F&I product provider execs during the “From the Boardroom” session I moderated how they buy cars. And you know what? Their tendencies weren’t much different than how younger generations shop.
Resource Agent Group/First Extended’s John Luckett, a Boomer, said he starts his search online. Once he lands on a few vehicles, he’ll go visit dealerships after hours or on Sundays to do a walkaround of the cars he’s interested in. “That’s so I wouldn’t be ‘upped,’” he noted. “Then I’d call the dealer, and he’ll tell me to show up on Friday to pick up the car. I don’t think I’m much different than a lot of consumers.”
Protective Asset Protection’s Tim Blochowiak admitted he’s more of a buy-on-a-whim consumer, saying he woke up one recent morning and decided he wanted a new car. So he looked online, found five cars at dealerships located five hours away, jumped in his car, and started driving while negotiating his deal via text.
“They tried calling,” he said. “I wouldn’t take their call. I just wanted to work the deal while driving.”
No, Tim isn’t a Millennial.
GSFSGroups’ Alan Bond, a fellow Gen Xer, said he prefers to deal with the same dealership and salesperson. He’ll make his vehicle selection online before heading to the showroom, and the price he’s quoted is the one he pays.
IAS’s Eric Mélon ruined my experiment when he admitted he buys from clients who ask for his business. But he did say something I strongly agreed with: “We need to focus a little less on the ‘e’ business and a little more on the ‘we’ business. You want a great experience at your dealership? Make your people feel good about it.”
I also agreed with Marv when he said, “I think we get a little too carried away with this Millennial chit chat.”
See, I think Millennials are forcing us to come to terms with the “us vs. them” mentality that has long plagued our industry. And that goes for salesperson-to-customer, management-to-employee, and F&I manager-to-salesperson relations. Because at the end of the day, aren’t we all after the same thing? A great experience that keeps cars rolling off our lots, the F&I office humming, and the service drive lined with loyal customers.