Trying to categorize the millennial generation under a neat label is a struggle. Some might think that millennials are addicted to smartphones and tablets, while others might praise their entrepreneurial spirit during a stubborn economy. Whatever the proper description is, there’s no question that for better or worse, they’ll soon be the generation in charge of this country.
The statistics reflect this: According to Advertising Age, millennials are set to become the largest spending generation in terms of volume. This demographic will reach the $200 billion yearly spend mark by 2017, and over their lifetimes, they’ll part with more than a cumulative $10 trillion.
Millennials are quickly building the buying power capable of making or breaking any business, but many other factors go into their purchasing decisions, too. If you thought technology was a critical issue in automobile sales today, just wait until millennials become the dominant spending force in the U.S., because as research from social marketing firms Ipsos Media CT and Crowdtap shows, a separate shift toward user-generated online reviews might be even more influential on buying decisions.
A jury of their peers
For decades and decades, TV, radio and print advertising dominated the advertising world. But as Bob Dylan said, “The times, they are a changin’.” The audience that those techniques proved effective for is growing older and just isn’t spending as much anymore. But if dealerships aren’t going to make headway with millennial consumers on traditional advertising platforms, where can they turn?
As the Ipsos and Crowdtap report showed, it’s not so much about what dealerships can give to their customers, but what consumers can give to one another. When it comes to perceiving trustworthiness in product reviews, 68 percent of millennials ranked peer reviews as the most reliable source of information. Millennials will also check social networks like Facebook and Twitter, as well as blogs and community-specific online forums for advice on purchasing decisions before they think to go to a company’s website.
“More than 50% of millennials admitted online user-generated content influences what they buy.”
Known as “user-generated content,” online reviews, ratings and rankings are becoming social currency in the emerging millennial economy. More than half of millennials surveyed as part of the study openly admitted that online user-generated content influences what they buy, compared to just 44 percent influenced by marketing through traditional media and a paltry 23 percent by Internet banner ads.
Anticipate, don’t react
One way to think of this millennial shift toward user-generated content could be in terms of honesty. While there’s nothing inherently dishonest about a business advertising itself online, many millennials think that other customers with no vested interest in selling them products are more apt to steer them straight. If a desire for more straightforward approaches to doing business is really behind this trend, then dealerships are going to want to start transforming themselves into online review-friendly brands as soon as possible.
After all, dealerships that make an honest effort now to solicit and foster online reviews are forming relationships with their customers. Dealerships that do the same thing 10 years down the road are just reacting to a trend, and millennials will smell this cash-grab from a mile away.