Millennials are known as the toughest sell for lenders and auto dealers alike. Thanks to a balance of education and nascent careers, this generation is in a state of flux while trying to figure out how to finance their lives.
Superlatives abound for this generation. They are the most ethnically and culturally diverse generation in the U.S., they are influencing popular culture, and they are steeped in technology. They are not however, all created equal, according to Tom Lazenby, senior vice president, Regions Bank Dealer Financial Services.
Lazenby told attendees at the recent Auto Finance Summit 2014 that this group is often painted as a generation made up of consumers who – to older generations, at least – feel entitled to financial success. At 30% of the population, millennials are a large part the potential consumer pie, and as with any segment that is this large and varied, Lazenby said, they should be targeted based not on what makes them similar, but on what sets certain sub-segments apart.
College Grad Millennials vs. Less Educated Millennials
In the next year, millennials with a college degree are more likely to have their first child or extend their family, make a major home improvement, change to a better job, and lease or buy a car than their less educated counterparts, Lazenby said. Furthermore, contrary to prevalent stereotypes, 84% of that group is employed, and 87% of those people have a full-time job with an average annual income of $52,700.
Recent college graduates not only have more money to play with, but are more conservative and confident in their finances than less-educated millennials. They also dislike being in debt, and think before they spend.
Debt, however, can be a measure of financial maturity. Without the savings older generations have accumulated, college grad millennials have had to find other ways finance their lives. And while this particular group is 3.4 times more likely to have education loans, 32% have mortgages, and 35% have car loans, they are also 36% less likely to have credit card debt than non-grads, Lazenby said.
Mobile is the center of their universe
It is not enough to know the profile of a college graduate millennial, according to Lazenby. The next step is to know how to engage them. With 77% of this generation owning a smartphone, 35 hours of the millennial’s average week is devoted to digital channels, said Lazenby, and they are age group most open to engaging with brands and even receiving advertising through their phone.
All of this equates to one plain and simple way to target millennials, according to Lazenby: A mobile-first strategy is the most efficient route to reaching this consumer where he or she is already spending a significant amount of time.