F&I Meets Generation Y

Those of us who do dealer development and work with F&I managers are hearing more and more questions about a somewhat frustrating and confusing group of buyers that is usually referred to as “Generation Y.”

Who are Generation Y buyers?

The term usually refers to those young people born between 1980 and 1994; in other words, between 20 and 30 years old.

Gen Yers may sometimes seem unfocused, but they are not stupid — not by a long shot. They’re the best-educated generation in American history. They are knowledgeable and intellectual. But they make their own rules, and they like to do business in a different way than older generations.

It’s easy for members of older generations — and if you’re over 30, you are now “older” — to view this group as impatient, casual, flippant and, often, disrespectful. They seem to older folks to lack social skills. You hear cliché stories about members of this group who attend seven years of college to get a four-year degree and then move back into Mom and Dad’s basement.

So why worry about them? They can’t buy anything anyway.

We need to focus on those who are responsible and gainfully employed, because they will be buying cars for the next several years.

And there will be a lot of them. Gen Yers are now the largest generation in the United States, numbering about 85 million, their annual spending power is approaching $1.5 trillion. They are the next generation of adults.

How do we help our F&I professionals deal with them?

I have gleaned a little firsthand knowledge about this generation. Over the past decade, I have worked closely with some of its best and brightest members. Every year, we hire a group of interns to help with various projects. These are second- and third-year MBA candidates. These “kids” are sharp, and they have provided us with a lot of insight into their thinking during the development of our current Package Option process.

But they are still just kids in many ways. For example, one of the brightest young ladies we have ever had as an intern is at work in our offices now. She’s only 22 years old and she’s already being recruited by several major companies. During a recent scheduling meeting, she asked, quite sincerely, “Isn’t the Fourth of July supposed to be on a Monday?”

While we will be learning a lot more about this group in the future, there are a few simple principles we have found that can help make working with Gen Yers a lot easier and more successful.

1. Make the F&I process easy, simple, and fast.

One of the things that has made our Package Option method especially effective with this group is that it allows them to buy everything easily and quickly. Gen Yers are in a hurry. They have little patience for longwinded presentations. They believe that every transaction should be as quick and painless as picking a combo meal at McDonald’s. They don’t know whether a No. 1 costs less than ordering the contents individually. They don’t care. It is simply a function of expediency.

2. Respect them.

Gen Y was raised on self-esteem and told that each one of them is special and unique. ... And they believe it. Let them know that you respect them. Don’t talk down to them. And don’t get put off if they appear too casual and unconcerned. They might be answering text messages throughout your presentation. Don't be offended. They aren't trying to be disrespectful. In their world, it’s perfectly respectful to text your friends, even while they're on a date.

Always remember that if you seem negative about their behavior, they will react negatively. One F&I professional told me, “It sounds like we should just treat them like everybody else.” That’s true, but with even more tolerance and patience.

3. Be honest and be yourself.

Don't try to act any younger or hipper than you actually are. You will lose all credibility with this group. Be up front with them and let them know their options. Don't try to hide or disguise information; instead, divulge and disclose everything. Let them choose.

4. Be careful with technological devices.

Generation Y probably knows more about your computer and iPad than you do. In our recent field testing of various on-screen and mobile presentation devices, we noticed that it was very easy for the Gen Y subjects to focus on the gadgetry and end up missing the product message. Make sure that any technology you use is simple, to the point, and operated only by you.

5. Inform them, don’t “sell.”

Generation Y doesn't have much experience with making decisions. They respond to information rather than sales pitches. Explain to them, in as simple and direct a way as possible, what your products are and, more importantly, what advantage they offer them.

6. Don’t be afraid to involve Mom and Dad.

Members of Gen Y, even the adult ones, consult their parents for advice on purchases — especially such “adult” purchases as automobiles and F&I products. Be prepared for a parent to become involved. Welcome their participation and assure them your products are in their child’s best interest.

7. Focus on them, not you.

Members of Generation Y are interested in hearing about what matters to them. “Why is this important to me right now?” and “What can this product do for me?” matter much more to them than older folks’ learned opinions.

There will be many more F&I strategies emerging to deal with this group as they make their presence felt in the marketplace. And adapting our dealers’ processes to Generation Y will be an integral part of our research and process development functions over the next several years.

That’s simply because we recognize that one of the keys to F&I success in the next decade will be honing the F&I process to match the expectations of this huge, emerging group of buyers.