Millennial Marketer

Owning a car - your own car - has been a key part of the American Dream for 100 years now. Now fast forward to today, where $4 gas prices and urgent environmental impact concerns have people changing their attitudes. In addition, the automotive industry is coming to a stark realization that the Millennial generation “does not aspire to car ownership” like their Baby Boomer parents did. This is because owning a car used to be the key to freedom, but now younger generations are seeing car ownership as a liability that ties them down.

While many American businesses and consumers are stretching their budgets to the breaking point just to fund their cars, a company with a brilliant business model has found a way to adapt through renting cars by the hour. The company is Zipcar, and they have been incredibly successful in targeting and connecting with Generation Y drivers.

Carsharing 101

Living in the city and owning a car is a painful experience, both financially and logistically - especially when you are young and on a tighter budget. AAA now estimates the average cost of car ownership will be $8,121 for 2008. $676.75 a month? There has to be a better way to get around! This is where Zipcar comes in.

The Zipcar concept: If you live in or near a major city with public transportation available, ditch your car and engage in carsharing instead. Use public transportation, cycling, or your own two feet to commute back and forth to work. When you do need a car for going on weekly grocery store trips or driving out to visit a friend in the suburbs, rent a Zipcar by the hour. It’s easy - Zipcar includes gas, maintenance, parking and insurance. The cost to rent an average ZipCar? About $8.50/hour after a $50 annual membership fee.

This clean, simple, and affordablepricing structure is of particular appeal to the cost-conscious Gen-Yer. But this isn’t just about price…accessibility, green benefits and cool cars help seal the deal with young consumers.

18-to-25 Drivers: An Untouched Segment!

A few years ago, Zipcar made a very smart move by working with colleges around the country to park Zipcars on campuses for students to use. For a long time, the car rental industry has made it nearly impossible for college kids to rent cars. Even recent college graduates are excluded from most rental companies’ minimum rental age of 25.

ZipCar has done the opposite, however, by making their program available to anyone 21+. In early ‘08 they broadened their reach even further by lowering their minimum age to 18 for most college students.

And guess what…it is working like magic. Young people are flocking to use Zipcars while in college, and that makes this service one that they are likely to continue using after graduation as well. In a recent INC Magazine interview, Zipcar CEO Scott Griffith emphasized the importance of young consumers in building the company’s brand, stating: “We’re taking a page from the Apple playbook, really creating awareness early on.” INC Mag goes on to note that 2/3 of Zipcar’s 180,000 members are under 35.

Spreading Buzz; Building Evangelists

Could Zipcar reach their target audience of young urbanites through traditional marketing methods such as TV advertising? Not a chance. This company has followed the likes of other cult brands (like Apple and Ikea) by creating a product/service that comes with a network of others that share a common philosophy. Zipcar is not just about renting cars…there is an entire community that comes along with every membership.

Most companies that try to build a community of Gen Y evangelists around their brand fail quickly. Here is how Zipcar has made it happen:

• Designing a truly cool product that is better for the environment and the local community - two values that are extremely important to Generation Y.
• Hiring the brand’s biggest fans to promote it (authentically) to their peers
• Ensuring nationwide consistency in service, but very local, customized marketing that fits the vibe of each neighborhood.
• Hosting great local parties to get Zipcar members together.
• Listening to what their customers are saying online, such as when they refunded this blogger after he rented a Zipcar to give New Yorkers free rides during a transit strike (see comment #11).
• And instead of producing professional TV ads, they encourage Zipsters to create their own commercials to post online. This one from a Chicagoan tells it all:

These unique efforts to target and build the brand with Gen Y have proven to be incredibly successful for Zipcar. Their timing is also spot-on, as there is an increasing demand for carsharing as fuel prices go through the roof. It is becoming easier to see why Gen Y is choosing Zipcar in record numbers instead of owning a car.

Yet even as they grow, this company continues to connect with their customers in a personal and meaningful way. How would I know? It worked on me when I joined last month. I am one of their many evangelists - not paid or sponsored at all by the company, but so genuinely thrilled about this service that I want to spread the word.

Harnessing Word-of-Mouth with Gen Y

Implementing Zipcar-style grassroots and WOM marketing is one of the most challenging, yet most effective ways to build your brand with Generation Y. With more than 70 million members in Gen Y, Zipcar realizes that this is a group worth targeting. Smart companies understand that as a group we are incredibly social and quick to tell our peers about the brands we really love.

Gen Y’s buzz-spreading ability is a key business builder behind the scenes at zipcar, and it is evidently working well for them - 40% of new Zipcar members are referred by their friends.