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Dodge, Ram, Audi, Mazda, GMC, Volkswagen, Acura and Mercedes-Benz are all in the heat of a “nomad retention challenge” in the U.S., a report from S&P Global Mobility shows.
The eight brands face the challenge of keeping conquest customers from being “one and done” and going elsewhere after one purchase, the market research firm said.
The brands are one of three major groupings identified in the S&P Global analysis of retention and defection of so-called nomadic customers with unidentifiable loyalty patterns.
On the other side of the challenge are Tesla, Subaru, Jeep, Kia, Hyundai and BMW — brands with a high share of nomads returning to market and higher retention. Tesla was a standout, with a share of first-time owners at 83 percent and the lowest one-and-done rate of all the measured brands at 39 percent.
Finding greater loyalty from conquests is both a short- and long-term necessity, S&P Global’s report said.
“Brands that fail to transform nomads into loyalists not only lose out on the immediate sale to the nomad but also the future loyalty benefit they could have provided as loyalists,” said Erin Gomez, associate director of consulting for S&P Global.
Ford, Toyota, Chevrolet, Honda and Nissan made up the final grouping, all with fewer first-time buyers and lower one-and-done rates.
The brands struggling with conquest loyalty are part of a larger industry trend, with a decade-high recording of about 58 percent of nomads leaving their previous brand in the 12 months ending July 2022.
In the past, brands with a presence in fewer segments, such as Ram, have tended to have higher “one-and-done” rates. Subaru, Volkswagen, Hyundai and Kia have all had success at lowering defection rates by launching products that fill a gap in their portfolio.
As a demographic, S&P Global found that nomads live in suburban areas, have a high disposable income and are likely to “chase the latest trendy product.” Identifying and retaining these customers, they urged, requires a flexible approach.
“Aside from the massive, long-term undertaking of creating products in new segments, there are other ways automakers can increase loyalty from their current nomads,” Gomez said.
“By understanding the loyalty makeup of their customer base, and where their nomads are going, brands can take a more targeted and efficient marketing approach to retain them.”