The millennial generation, those born between 1980 and 1994, is the biggest in history, even bigger than the baby boomers. Financially, this group won’t reach their peak earning age until 2020. However, millennials already control a large chunk of liquid assets, an amount that is forecast to grow to $7 trillion by 2020. By 2025, they are expected to generate 46 percent of all U.S. income.
This generation is very different than their elders in several ways. Millennials are the first completely digital generation, living almost entirely on their smartphones. Their spending habits are vastly different as well. According to a Goldman Sachs Research report issued this year, millennials are far less likely to purchase something because it’s convenient. Quite the opposite. They will delay a purchase in search of a lower price or a better deal. While they do spend money – they focus on value rather than impulse.
Making the sale
As a powersports dealer, selling to this new generation may cause some initial headaches. But selling on value is never a bad proposition. You simply need to focus on “need” vs. “want”.
Owning a bike for the daily commute has more appeal to millennials who do not live in an urban core, or have no access to public transit. But the bike they will prefer must communicate value much more than status. With their reliance on the internet, expect this customer to have done their research before ever entering your dealership. In fact, they may only enter your store to finalize the sale. Does your team have a digital communication strategy?
Reliability will also be a key selling point. Offering VSCs, tire protection or a CPO program on a used bike are important tools which can lock down a sale. Make sure your team clearly communicates the value of these items.
Focus on financing
Millennials focus on value for a reason. The average worker in the 24-36 age group earns $10,000 less than their parents' generation did at the same age, which equates to roughly 20 percent less purchasing power. Meanwhile, the average student debt for a millennial is double that of the previous generation. Outstanding student loan debt stands at $1.31 trillion, spread out over 44.2 million Americans. The average monthly student loan payment is $351. While a baby boomer customer might have paid cash or purchased a bike with a credit card, the millennial customer is looking for financing.
Just as they shopped for value in a bike, they also demand value in their loan provider. Are your lender partners available during your store hours to discuss various options, or structure a loan to meet a millennial’s needs? Make sure you work with your lender partners to understand how they can support these buyers.
And speaking of lender partners, many credit institutions are also challenged to meet the needs of the millennial and are concerned with financing this in-debt generation. By including consumer protection products in the deal package, you position your shop as a preferred customer for the banker.
There’s no doubt that millennials will soon become the dominant consumer. And, their care-abouts are unlikely to change. Become a value-added resource – and put some value in your pocket.
Glenice Wilder is the vice president of Powersports for EFG Companies. A 33-year industry veteran, Glenice is responsible for growing and developing EFG’s action and powersports market channel. She combines her passion for motorcycles and her dedication to serving EFG’s customers to develop solutions that consistently exceed their expectations. Glenice acts as a strategic partner to assess her clients’ areas for improvement and how EFG can fill that role. She provides insight in how to increase productivity by pairing the right products within the right markets for the greatest return on investment.