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How to dissect the millennial wallet and score the sale

How to dissect the millennial wallet and score the sale

Published February 2017

A business card with the title "Chief Inspiration Officer," several credit cards with worn down chips that can no longer be read, a driver's license that still reads "Under 21 Until," a multitude of reward and membership cards for discounts, and a single dollar bill.

Millennial Driver

To older generations, a millennial's financial habits can be a worrisome thought. A millennial's wallet, however, may set the scene for this year's top-rated Hollywood thriller. Regardless of the scare factor, it's important to understand that millennials aren't doing their finances wrong - they're doing them differently. The "largest living generation" in the U.S. is changing the world of finance and investment, which will, in turn, change the face of consumer-focused marketing and sales.

What does this mean for you as a dealer? It means it's time to dissect the millennial wallet and become fluent in your customers' financial status and habits. Here are four tips that will have your millennial customers signing on the line and feeling confident they made the best possible decision.

  1. Understand their budget

    According to a CNBC news article, "eight in 10 millennials have a budget, compared with 61 percent of boomers." This younger generation has been hit with some difficult markets when it comes to large purchases and investments, so it's understandable why they feel the need to set goals and limits. Ask questions and get familiar with your customers' spending and saving habits, specifically when it comes to a desired vehicle. The worn-down credit cards in their wallets have seen better days, so staying within a budgeted range will be an asset when it comes to ensuring an application approval.

  2. Discuss their life stage and know their desires

    This may seem like a no-brainer, but being interested in where your millennial customer is in life and what they're looking for in a vehicle will help you assess what you're going to be able to provide for them. Millennials are those born between approximately the early 1980s and mid 1990s, which means they could be in their 30s with a young family or they may just now be breaking into the workforce post-college. This is the difference between a third row-donning GMC Acadia for the wholesale rewards member and a more youthful Chevrolet Cruze for a cycle studio's newest member.

  3. Millennials are highly visual learners and purchasers, and they prefer experiences

    Get them behind the wheel as many times as possible. Let them test drive until they're fully satisfied. Paint a picture of how the vehicle will meet their needs should they take it to a music festival, a quick trip home for the holidays, or a cross-country move. Teach them all the ins and outs of the extra features they can afford in a specific vehicle so they can experience the full-functionality of these features first-hand. Experiencers like to reminisce, and with your help, they'll soon be reminded of the time they drove their brand-new Buick Envision to Destin, FL for a beach vacation.

  4. It's not uncommon for a millennial to have a "cash phobia"

    That single dollar may look lonely, but it may not be a testament to the owner's actual financial status. Mounting student loans, easy-access online payment portals, and the need for a credit score are all driving factors in the "I only use my credit card" habit of the stereotypical millennial. These vehicle purchasers will be open to both the lease and retail installment sale options, as long as there is full transparency. They'll want to know ahead of time that extra charges can be associated with excess mileage on a lease but that monthly financing payments may be lower. They will want to understand all of the benefits of leasing, financing, and paying in cash. So be mindful of your millennial customers' propensity for credit transactions, and understand his or her purchasing style.

Following these four tips will help you better understand what your millennial customers truly want. You will be more prepared for the necessary supporting role when it comes to approval and the final purchase, and it provides a more remarkable experience for the customer.

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