• “Nomads” change brands of cars frequently
• “One and Done” rate at highest level in ten years
• Tesla convinces many new customers – and is able to keep them
Winning over new customers and retaining existing customers is always a priority for car manufacturers. In order to achieve this, different marketing strategies are used in each case, so a vehicle manufacturer could decide to enter a new market segment in order to acquire new customers. But in addition to new customers and those who remain loyal to a brand, there is also the group of car buyers who jump from brand to brand and never remain loyal to one car manufacturer for long. This group of buyers is also known as “nomads”.
According to S&P Global Mobility, nomads tend to be affluent, highly educated, suburban households with high disposable incomes.
If a customer buys a certain brand of car once and then never buys it again, this is called “One and Done”. According to the analysis company S&P Global Mobility, which specializes in car data, the rate of these so-called “One and Done” buyers has increased in the last twelve months (to the end of July 2022) with 58 percent to the highest level in ten years.
How different car brands perform
Automakers can counteract this trend by serving multiple market segments. S&P Global Mobility writes that Subaru, Hyundai, Kia and VW were able to open up a new market segment between 2017 and 2019 by launching new models and thus reducing the customer churn rate. In general, there are automakers that are seeing a higher rate of nomads who, after purchasing one brand, will look to another vehicle manufacturer for their next vehicle. According to data from the analysis company, these include Mercedes-Benz, Volkswagen, Acura, GMC, Mazda, Ram, AUDI and Dodge. On the other hand, there are brands that manage to convince more and more nomads, so they are very popular with this group of buyers. These include Tesla, Subaru, Hyundai, BMW, Kia and Jeep. And then there are those brands that don’t have a high proportion of nomads, but also don’t have a high “one and done” rate, like Lexus, Nissan, Honda, Toyota, Chevrolet, and Ford.
However, according to the data specialist, a higher proportion of nomads among car buyers is not necessarily a bad thing. Logically, younger car brands often have a larger proportion of new customers and fewer returning buyers, since the company simply hasn’t existed that long. What is clear, however, is that if a car manufacturer counts many nomads among its customers, there is a greater risk that they will migrate again. The high rate of “One and Done” buyers also shows that car manufacturers currently have a good chance of snatching customers away from other brands. Of course, an important goal for the car manufacturers is also to convert the nomads, who were once won over as buyers, into loyal, returning customers.
Tesla convinces new customers and also convinces in the long term
One brand doing this better than any other automaker is e-pioneer Tesla. The group recorded under the leadership of Elon Musk a new customer rate of 83 percent in the last twelve months, which is not really surprising as a relatively new brand. What S&P Global Mobility calls remarkable, however, is the fact that the automaker also manages to successfully retain these new customers. For example, the “One and Done” rate at Tesla is only 39 percent, while that of the entire industry is 58 percent. Incidentally, the second best brand is Ford with a rate of 50 percent.
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