Times have changed. 15-year-olds no longer have posters of cars on their walls – many are not even counting the days until they get their driver’s license. Driving is seen less as a rite of passage and more as a convenience. In fact, Millennials are more excited by their first smart phone than about getting the keys to their own car – after all, a smart phone gives them access to the exact data or tools they want and can be completely personalized to their needs and preferences.
In 2010, a mere 28 percent of 16 year olds had driver’s licenses, compared with 44 percent in 1980. So if a car is no longer seen as freedom from parental oppression, a symbol of adulthood, and a representation of personal identity, how does this change the way marketers approach this demographic? Carmakers need to use the massive amounts of data that this group generates to deliver highly relevant interactions that provide real value for customers.
As Motivations Change, So Must Messages
Millennials are not driven by the status of car ownership, much less the status of particular car brands. They focus on getting from point A to point B – functionality, features, sustainability and cost of ownership matter more to them than styling or the logo on the back.
This is true for entry-point cars now, but will also be true for mid-range and luxury brands as today’s teens and young adults mature. Since entry-point cars have always been more functional than prestigious, the current shift is less of a challenge for these brands. Upstream brands (particularly luxury makers) need to learn these lessons now or they will not be able to move customers up the brand ladder effectively. Luxury brands will never be able to sell completely based on functionality, but they will need to incorporate these messages, if only to help consumers justify to themselves their desire for a vehicle that goes beyond the utilitarian.
When engaging Millennials, knowing your customer is more important than ever. If prestige isn’t the primary driver for your demographic, it is up to you as the marketer to figure out what is. Technology features can be a significant differentiator, particularly when it comes to connectivity. Displaying relevant, real-time information such as prices at nearby gas stations will become more common in the near future.
Many younger drivers are also very ecologically conscious. While high efficiency vehicles such as Toyota Prius and other hybrids may be out of reach for entry-point consumers, messages around sustainability still resonate, whether it’s highlighting great gas mileage or touting zero-landfill manufacturing practices. Finally, reliability and total cost of ownership are key considerations for utility-focused consumers.
Providing Value Beyond the Logo
Once you define the messages that will resonate with customers, you have to communicate them. Direct interaction with consumers can be a challenge for automotive brands since the actual transactions occur with the dealer, who has more interest in filling the pipeline with immediate leads than fostering a lifelong relationship that moves the customer up through the brand portfolio. Tesla has abandoned the dealership model entirely, partially because it wants to be able to communicate with customers directly rather than risk a negative experience with a third party. Short of scrapping dealers, car brands need to find ways to invite customers to engage with them.
Leaders in other industries have found ways to address this issue. For instance, Samsung mobile phones are sold primarily by carriers and big box retailers, not directly by the company. The company has found a way to add value, engage customers and control the brand experience by creating the Samsung Owner’s Hub – an online community that enables customers to connect with each other as well as the company. Customers can use this forum to get answers in a Samsung-branded environment, rather than going to their local Sprint or Verizon store where Samsung cannot control the experience.
Brands can also work through the dealership to ensure that the brand experience adds value. BMW meticulously manages the customer experience at every touchpoint, particularly with its no-cost motoring warranty. The company migrates customers up through the portfolio based on income, milestones and purchase history so effectively that the lifecycle for repurchase is only about 3.5 years.
Using a Customer Engagement Engine to Drive Results
The first step in learning about and communicating with customers is to capture as much data as you can. Beyond basic demographics such as age, gender, location and income, you should know their channel preference, purchase history, life stage, attitudes and point on the customer journey. Carefully evaluating this data will enable you to generate meaningful customer insights that tell you who your best customers are, how they behave and why.
Once you have these insights, you can use them to serve up specific, relevant messages that that provide value to customers. By tracking how consumers respond to these messages, you can optimize the program in real time. Successful brands will also deliver a single, integrated experience across numerous touch points and devices. That means the search a customer performs on the manufacturer’s website will directly affect the way he or she is greeted when visiting a dealership, as well as the digital messages they receive. This requires the manufacturer and dealer to work together to focus on the customer – eliminating the traditional barriers between the two.
In addition to influencing messaging and customer experience, a data-driven approach can provide functional value for customers. A vehicle will be able to communicate with a driver’s device and deliver updates on distance traveled traveled, carbon footprint, fuel consumption, current distance from home or loved ones, the vehicle’s performance and more.
The days of kids festooning their walls with pictures of Ford Mustangs or Porsche 911s may be waning, but if auto brands focus on gathering deep customer insights on their key segments, using that information to tailor very specific messages, communicating directly with consumers and providing a superior brand experience, they may just be able to turn these indifferent drivers into members of the family.
