Dealers should be shifting their marketing strategy to appeal to the segment likely to dominate their business for some time. BY JODY DEVERE
Luxury car dealers, do you know your audience?
If you’re like most dealers whom I’ve spoken to, you may be selling cars with the wool over your eyes, assuming that the affluent male buyer is your crème de la crème, with some wealthy widows, high-ranking female executives and women entrepreneurs rounding out your target market. However, the latest research seem these assumptions just aren’t supported any longer. As CEO of AskPatty.com, a website dedicated to providing automotive resources to women and helping auto dealers like yourself attract and retain more women customers, the findings surprised me as well.
The “Shullman Luxury, Affluence and Wealth Pulse, Autumn 2014” report from The Shullman Group, a niche marketing research firm, offers some very intriguing findings on who is actually buying in the luxury vehicle market. First of all, it’s not just affluent people. In fact, 61 percent of buyers with a household income of $250,000 or more don’t own a luxury car!
And interestingly, it seems that the millennial generation of women is driving more luxury vehicles than is commonly assumed. While dealerships following an orthodox approach have continued to target an older buyer demographic, they may have been taken unaware by decision by many millennials that they are more interested in a luxury lifestyle than are baby boomers or Generation X.
Stats On Millennial Takeover
According to the study, “The $75,000-$249,999 affluent segment is the primary buyer of all the luxuries consumer spending , including luxury vehicles. The second-largest buying segment for all luxuries was mass-market America [those with less than $75,000 in household income]. The very high-income buyers [those with $250,000+ incomes], although fewer in number, typically spend the most on average for each luxury bought and tend to buy more luxuries per adult than the other two income segment …
“The number one luxury buying generation today, according to this survey, is the Millennial generation [18-34 years of age in 2014], who constitute 45% of luxury buyers.”
So, let’s take a moment to consider the target market for dealerships in the luxury segment – the new target, the millennial woman.
If dealers are going to effectively sell luxury cars to millennial women, they need to understand more about how they think and operate. These are not baby boomers or Gen-Xers, so marketing approaches oriented toward those older demographics will ring false with these groups. (It’s also worth noting that, in my experience at least, a high proportion of the millennial segment is actively working in advertising much of the time. This is yet another reason to avoid outdated or trite marketing and advertising. They know all those tricks!)
Profiling The New Luxury Buyer
Today’s millennial women are a technologically connected, diverse and educated generation. They prefer the speed and convenience of smart phones and e-mail over live phone conversations or walk-in business.
In terms of work, they tend to have more job market equality than in previous generations, and are earning four-year degrees at a higher rate than their male counterparts are. This higher individual income translates to higher overall household income for their families, which points to a new kind of American family – one in which the mother is the sole breadwinner.
Opinions These Customers Value
Millennial women do have some traits in common with boomers and Gen-Xers. They tend to be “brand influencers” who are quick to share their opinions with friends, family and their online communities. A majority of social media outlets have predominantly female users, who use those outlets to speak their minds.
Millennial women generally insist on being included in any important conversations, and rebel against being told what to do or what to purchase. They value inspirational messages and important causes, and most significant of all, they tend to support brands they feel support them.
When it comes to advertising to millennials, remember that this is the generation of the “meme.” In other words, iconic, engaging and visual marketing plays an important role in ad messages that resonate with them. Luxury car dealers should not shy away from humor, and should focus on making their messages instantly accessible and simple.
Ever looked at Pinterest? It’s literally just a wall of photos, but to many millennial women, it’s a wall of ideas, conversations and opportunities to do something amazing. Consider this: Fifty-eight percent of them look to Pinterest or Instagram for inspiration on everything from meals to make-up to home décor.
Most of all, these women are “social shoppers,” meaning inveterate users of social media who value the opinions expressed by their social media peers more than anonymous reviews or snappy slogans.
Be Sincere With Causes
Cause-related marketing also works with millennial women, as long as you take care to ensure that your cause means something. Millennial women are usually quick to spot specious practices like “pink-washing” (that is, coloring a product pink for breast cancer awareness month but not actually providing any meaningful support for the cause). So, choose your charities wisely and remember that transparency is key.
When your dealership does commit to a cause, it should embrace your entire company. For example, consider TOMS Shoes. The company’s message is clear, simple, cause-driven and instantly accessible: For every pair of TOMS Shoes purchased, the company will donate a pair to a child in need. This clear and concise message, coupled with transparency and accountability, has made the company an absolutely huge hit with millennial women; to date, it has provided shoes to more than 10 million children.
Back To The Core Question
Now, let me ask you again, luxury car dealers: Do you know your audience?
Are you shifting your target-marketing practices away from the older executives and widows and toward the generation of Pinterest projects and Tumblr blogs? If you’re not approaching your marketing plans with the goal of making instant accessibility the core of your brand, then you could be missing out on the No. 1 buying segment of luxury vehicles today.