The descriptive term ‘Millennial’ can paint different pictures in people’s minds. For some, a Millennial is a member of an entitled generation who is lazy and wants to take the easy path. To others, a Millennial is a socially conscious and tech savvy go-getter.
It’s hard to talk about Millennials (also known as Gen Yers) without stereotypes. They are children of Baby Boomers (who were once agents of change) and the grandchildren of the Greatest Generation, two population groups noted for their supposed diligence, hard work and can-do attitudes. In reality, Millennials are many things and each Gen Yer is his or her own person, just as with all individuals from all demographic groups.
For the tire industry and today’s tire dealer, Gen Y represents a new breed of both consumer and employee. Understanding, even in generalizations, the next generation can help grow a business for the future. Failing to understand Millennials could leave a business badly behind.
Who is Gen Y?
Historically, generations are defined in hindsight, so who Millennials are as a generation continues to be defined and redefined.
The size of the Millennial generation is comparable to that of the Baby Boomer generation. According to the most recent Census figures, there are roughly 80 million Millennials in the U.S. In comparison, there are about 82 million Baby Boomers (give or take a million, based on age brackets).
Dr. Kit Yarrow, a professor of psychology and marketing at Golden Gate University and a noted Gen Y expert, points to several things that make this generation unique.
“They’re the first generation to grow up from day one in a digital world,” says Yarrow. “There has also never been a greater focus on a generation of youth as this one. The combination of their ability to use technology and their parent’s attention has made a massive difference on them psychologically.”
Yarrow also explains that compared to other generations, Millennials have a less realistic connection between what they do and what they get as a result. She says, however, Gen Yers tend to be more cheerful and optimistic than previous generations.
With a huge gap in ages between Gen Yers, there can be differences within the generation itself. Yarrow, who conducts focus groups constantly, says older Gen Yers often touch on these “perceived” differences.
“Every time I would talk to an older Gen Yer they’d tell me about themselves, and I’d make comments about Gen Y just waiting for a reaction,” she says. “Sooner or later someone would say ‘Whoa, whoa, whoa, wait a minute; my younger cousin, brother and sister, whatever, is nothing like me. Those kids…’ and then they’d describe the things they said about themselves ramped up times 10.”
The important thing to remember about the differences within the Millennial generation is that things aren’t slowing down from a technology standpoint, Yarrow says.
“What I see is a very immediate, a pending acceleration of everything that we’re talking about,” she says. “If you think it’s like this now, seriously, wait until next year. The pace of change is accelerating. You need to be proficient online, to be fast and symbolic in your communication. All of these things become more and more paramount for the success of business as the years go by.”
When it comes to the workforce, the size of the Millennial generation has a huge impact on the dynamic of the workplace, according to Dr. Nicole Lipkin, a psychologist and business leadership consultant. Estimates vary each year, but roughly 36% of the current workforce is comprised of Gen Yers, and by 2020 that rises to 46% of the active workforce, she notes.
“According to the research that’s been done, Gen Yers really want what we all want. It’s just that they’re part of a larger generation and more outspoken about it,” she says. “This generation, because they’ve been raised and shaped a certain way, are more likely to say, even though it might seem ridiculous to some, ‘Hey, I want a raise;’ ‘I want flexibility;’ ‘I don’t want to work eight hours;’ or ‘I want to work from home.’ The rest of us didn’t necessarily say it, but it’s not like we didn’t want it.”
The Millennial Customer
Technology has always had a role in Millennials’ lives, so it makes sense that technology is key when trying to reach this customer group.
Yarrow co-authored a book on Millennials and retail – Gen BuY; How Tweens, Teens and Twenty Something’s are Revolutionizing the Market – and has tracked their shopping trends.
She says it’s critical for retailers to have an active, updated website, and tire dealers specifically should try to have a mobile-optimized website and a presence on social media.
Yarrow notes that adopting new technology will help drive your business when it comes to the Millennial customer.
“You can impress this generation by how willing you are to adopt new technologies. So whether you actually sell a lot of tires online is irrelevant. The fact that you’re willing to try, that’s relevant,” she says. “What really matters is you’re trying to make life easier for the consumer through technology and online resources.”
Dean Schwartz, co-owner of Lloyd’s Tire Service in Santa Cruz, Calif., notes Millennials use the shop’s online quoting system and well knows that they use the Internet far more than older generations.
“It seems like the majority of younger people use online quoting,” he says. “When they come in they’re definitely more knowledgeable about pricing, about what they need and what they expect.”
Christine Croucher, who owns Rainbow Tire, sees a difference in online consumer habits between her two stores – one in rural Masontown, W.Va., and one in Morgantown, home of West Virginia University.
“In Morgantown, if we didn’t have a website I don’t think we’d have any business,” she says. “Whereas in Masontown, they don’t give two hoots about our website.”
Croucher says 90% of the dealership’s online price quotes come from the Morgantown location. Her younger consumers there are also more likely to come in with product information from the Internet as well as coupons on their smartphones.
Noticing the difference between her consumer groups, Croucher now offers a text marketing campaign. Customers can text ‘TRLDY’ (Croucher’s known as The Tire Lady) to a specific number and get a promo offer in return.
“What happens is once they text that short number, every month they get a text message saying that ‘OK, our promotion this month is $10 off an oil change.’ All you do is bring your cellphone in and show that you have received this text,” she says. “It keeps the customer involved and we have their number in an active database now.”
Croucher is also exploring sending her customers text messages after a service instead of calling them following a suggestion from a younger employee. “He said calling them was a pain for the customer; we’re interfering in their life. We should just text them that their car is done. That way they can respond at their convenience,” she says.
At age 29, Nick Lenhart, general manager of Lenhart’s Service Center & Tire Pros in North Huntingdon, Pa., is a Millennial. He says when trying sell to his generation, he thinks about what he and his friends would like.
Lenhart sees social media as a key tool to stay in touch with the community, but not overwhelm followers with advertisements.
“Trying to hard sell Millennials is not a good thing,” he says. “ I know I don’t like things rammed down my throat. If I like a company on Facebook and all of a sudden my newsfeed is bombarded with ads, sales and coupons, I’m going to unlike them because it’s an invasion of my personal space.”
Before making big purchases, Lenhart says he goes online to research, so maintaining the shop’s online reputation through reviews is important. Besides having a positive online reputation, just being easily found on the Internet is key.
When redesigning the shop’s website, Lenhart explains that it was important to him that the site function on mobile devices, as well.
“We’re in the know all the time. When you want to know something, you pull your phone out and you know instantly,” he says. “If someone needs tires they’re going to pick their phone up while they’re at work or on their lunch break, or driving down the road and they’re going to Google ‘tires’ in their town. If you don’t come up, then you’re going to be missing an opportunity.”
When it comes to purchasing tires or car service, Millennials may seek advice from someone who knows more about the subject. Gen Yers are willing to ask their parents for advice on where to go or what to buy, or they will seek out an “expert’s” opinion, Yarrow says.
“Twenty years ago, the expert opinion might be the local dealer, but people have a little less trust in businesses now,” she says. “The expert is now someone like them. The old expert opinion has eroded. What Millennials trust is the opinion of other people like them.”
Since the expert has changed, it’s important for small businesses to cultivate online reviews such as those on Yelp, Google and Angie’s List, Yarrow says. Retailers should be aware of what’s out there and respond positively to negative reviews.
Both Lenhart’s Service and Lloyd’s Tire list all reviews of their locations on their respective websites.
“If you ask younger people how they heard about us, they will often say from reviews,” Lenhart says. “One of the things that people do when shopping for tires is look on Michelin’s website or Continental’s site and find us. Then they go to our website and research the reviews, and then they’ll come in and say, ‘Well it seems like you have a lot of positive reviews so we thought we’d give you a try.’ ”
Lloyd’s Tire also sees an influx of customers due to reviews, Schwartz says. “I’ve actually heard comments from people saying ‘Oh, I’m here because you have a lot of good Yelp reviews.’ That’s definitely the younger generation … that doesn’t happen with the older people,” he says.
A big benefit for businesses trying to reach Millennial customers is the generation’s eagerness to participate, Yarrow says.
“If a retailer is able to kind of capture the interest of the Gen Yer, you get 10 times more back than you would from other generations,” she says. “They’re willing to literally help sell your products to their friends, and they can do it because they have a big mega phone in the form of social media.”
Promotions that engage a Millennial’s creativity or align with their interests can be extremely successful. If a dealer is struggling to come up with ideas to reach Millennials, they should enlist help from a group of Gen Yers, she says.
Moving forward, Millennials will continue to play a larger role in sales for a business.
“We’re really moving into an era where Gen Y will have the most spending power of any generation. That’s really only a year or two away,” Yarrow says. “Any business that wants to stay viable going into the future has to understand this is a really different type of consumer. All the rules that worked before, some of them will still work but you have to add a few new tricks to the bag.”
The Gen Y Employee
By 2020, Gen Y will make up nearly half of the U.S. workforce population. Understanding what Millennials want and expect from an employer can help a dealer find and retain qualified employees from this generation.
Lipkin, who co-authored Y in the Workplace: Managing the “Me First” Generation, notes that it’s a competitive advantage to embrace new ways of thinking when it comes to running a business.
“We know that 46% of the workforce in six years is going to be a completely different age group that wants everything that everyone else wants, but is just speaking out more publically about it. Knowing that, to not consider new ways of approaching the workforce would be insanity,” she says.
In today’s society, businesses can’t expect to retain good employees without being flexible with time or without investing in an employee’s development, Lipkin says. Additionally, businesses can’t hire old school abrasive managers and expect to retain employees, she notes.
Lipkin, who also wrote the book What Keeps Leaders Up at Night, says good managers and owners actively engage their employees. Engaged employees are more likely to stay around and work harder than what they’re being paid for, she says.
A recent study by Gallup found that an engaged workforce has a positive impact on a company’s bottom line.
Gallup’s “State of the American Workplace” study, based on data from 2008-12, found businesses in the top quartile in employee engagement outperformed bottom-quartile units by 10% on customer ratings, 22% in profitability and 21% in productivity. Companies in the top quartile also saw significantly lower turnover (25% lower in those companies with historically high-turnover, 65% in those low-turnover organizations), 37% lower absenteeism and 48% fewer safety incidents.
“Some of the companies doing it right are focusing on how they’re rewarding and recognizing people. And they’re focusing on things like quality of life or quality of work, and not just compensating with more money,” Lipkin says.
One way to engage Millennials, and other employees, is to provide work schedule flexibility. Lipkin says providing employees with flexibility to take their kids to practices or appointments leads to happier employees.
“For me it’s always nice to have a good solid paycheck, but I’m not driven by money personally. I like my time,” says Dusti Clarke, 33, an automotive technician at Lloyd’s Tire. “I like where I work and I like that I get the time when I ask for it. To have a flexible schedule is nice for me.”
Providing a flexible schedule can be hard sometimes, but Lipkin encourages not turning down employees’ requests all the time.
“Instead of immediately saying no to folks, give people the opportunity to earn that flexibility,” she says. “What you’re doing as the boss or the owner is saying ‘I recognize you have more than just this job,’ and what this does is lead into greater engagement.”
Croucher has worked with her employees to be more flexible with schedules, she says. While her employees are still looking for a standard 40-hour workweek, some would like a 12-hour shift one day and then a six-hour shift the next, she notes.
“I work with my people on their schedules because it makes them more productive,” she says.
Croucher also says flexible scheduling works for her shops because sometimes things are very weather dependent at the store. Everyone is okay working when it snows because they know they’ll be given time off later, she says.
If a dealer can’t be as flexible with time, there are other ways to engage Millennials. Lipkin divides external motivation into either quality of work or quality of life rewards, noting that monetary compensation can only motivate an individual to a point.
“When you leave a company and you talk about a company on a positive note, you don’t talk about your salary or the paycheck. You talk about all the great experiences you had, the friendships you made and the cool things your boss did or your colleagues did,” she says.
A quality of work reward might be providing an employee the opportunity to head a team or spend time working in a different department, Lipkin says. Other rewards could be more vacation time, or getting to take a training course as part of the employee’s own management or leadership development.
Quality of life rewards include things like giving an employee a spa day, having their house cleaned or providing tickets for a concert or event. Some of the most impactful rewards have come in the form of handwritten letters, she said.
Each reward should be uniquely tailored to the individual, Lipkin says. “It’s about really sizing up where that individual is, who they are, and how they want to be recognized and rewarded,” she says. “You have to be careful to do it correctly, because you might have an introvert who has no interest in being publicly rewarded. They might really just want a pat on the back.”
Outside of understanding how to motivate Millennials, dealers might experience challenges with multiple generations working together. Establishing relationships early can mitigate these challenges.
“People butt heads with others when one party is not being empathetic or understanding where the other person is coming from,” Lipkin notes. “I think we all have so many stereotypes of each other because we like our own generation and think our generation is the best and everyone else is going to screw it up for the rest of us.
“But that’s just not the case.”
Lipkin encourages businesses to establish mentorship programs, coaching or teams that span the generations. “We all can learn a lot from each other. I find twenty-somethings are very willing to be mentored and very eager to learn,” she says.
“There’s a lot of mentorship that can happen from older to younger generations. And twenty-somethings really have a lot to teach the rest of us about technology, integrating technology or new perspectives on how to sell. You can learn a lot if you stop getting annoyed with each other and open the discussion.”
Millennials are here. Now. They clearly are affecting the marketplace and influencing the workplace. Their generation’s impact is only going to grow.
Your business will benefit most from embracing change, not fearing it.