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Automakers should use mobile to target millennials: Microsoft

Online customization, mobile alerts, self-service kiosks and other high-tech channels are preferred by millennial customers when shopping for cars, trucks and SUVs.

This was the key finding of a study by Microsoft that found that technology may be the key to engaging the estimated 80 million people of the "millennial generation." The Microsoft "Millennials in Automotive Survey 2009," conducted by Washington, D.C.-based KRC Research, found that millennials have heightened expectations as to how automakers should interact with them via high-tech channels.

"Automakers and dealers are facing significant challenges such as steep declines in auto sales, operational costs, a credit crisis and an aging workforce," said Ted Ladd, senior public relations manager, U.S. commercial industries, Microsoft Corp. "The millennial generation is made up of an estimated 80 million people, and they are beginning to enter the workforce and purchase their own vehicles for the first time.

"As the largest wave of consumers entering the market since the Baby Boomers, millennials represent a great opportunity for automakers to tap into a new customer base," he said. "The Millennials in Automotive Survey 2009 sought to determine millennials' views on the automotive industry in general and as an employer."

Washington, D.C.-based KRC Research conducted the Microsoft "Millennials in Automotive Survey 2009," from Jan. 5 to Jan. 1. The study garnered responses from 400 young adults in the United States born 1980 to 1990.

Portions of a previous KRC Research-conducted survey, the Insurity/Microsoft "Millennials in Insurance Survey 2008," were also referenced in the study.

According to the Microsoft report, millennials represent an untapped market for many automakers, as these younger adults are now entering the workplace and buying vehicles on their own for the first time.

However, for automakers to court these tech-savvy consumers, they need to embrace newer technologies as a way to communicate and sell more effectively to them.

Millennials reported using a wide variety of technology tools in their day-to-day lives, such as social networking sites (77 percent), instant messaging (IM) (71 percent), and wikis (59 percent).

Half of those surveyed subscribed to more than one social networking site, 64 percent frequented them daily and 33 percent reported spending 30 minutes or more for each visit.

Because of this proclivity toward using technology in their personal lives, millennials have similar preferences in interacting with companies and brands.

"The mobile channel is well-suited to engage millennial consumers because they have been marinating in these sorts of technologies since birth," Mr. Ladd said. "Millennials favor mobility in general, both in terms of workplace expectations and in terms of how they consume information."

In the Microsoft survey, 91 percent reported that it is important for auto manufacturers to offer Web sites that give a full view of purchase options and service history, while 86 percent and 87 percent, respectively, said that Web-based auto financing and service requests and customization of car options, such as color and add-ons, were important.

Beyond the Web, millennials in the survey reported wanting to interact with automakers through IM (56 percent) and other popular high-tech channels, such as mobile.

For example, 74 percent want to be able to visit automotive company-hosted blogs to post concerns or ask questions; 52 percent want to get mobile alerts regarding new car releases, price drops and more; and 44 percent sought to network with other auto enthusiasts through automotive company-supported social networking sites, Facebook or MySpace groups.

When comparison shopping for a car, the majority of millennials prefer to visit dealers in person (91 percent), but roughly half (52 percent) would prefer to use self-service kiosks or mobile devices at the dealership to automate the shopping process versus talking to a person.

In addition, 89 percent will compare products, services and rates on company Web sites, while large percentages of millennials report they will seek advice from third-party consumer Web sites (65 percent), third-party consumer blogs (45 percent), friends or colleagues via social networking sites (61 percent), and friends and family (87 percent).

"Mobile devices can address challenges for automotive brands, such as the need to drive product to market faster, to communicate and collaborate efficiently in an increasingly distributed and global environment, and to increase production and efficiency in a difficult economic climate," Mr. Ladd said.