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Limiting Loyalty Defection with Conquest
Marketing: What You Need to Know
Amplified Nomadic Behavior During Downturns
A nomad is not loyal to any individual brand historically and jumps from brand to
brand when buying a car. Data available through IHS Markit
TM
shows us that brand
loyalty is challenged during times of economic downturn, which is when nomadic
consumer behaviors tend to emerge.
The good news is that the auto industry brand loyalty rate is at a historic high point
from within the last 15 years at 55.3% across all major brands. However,
nomadic behavior began to peak in the second half of 2009 following the 2008
recession, dropping loyalty rates from 47.5% to 42.1%.
How Much Conquest Opportunity is Out There?
IHS Markit data shows approximately 9 million nomadic households will be in-market for a new car in
2020, making up the highest volume of the mix at almost 53%. That means a dealership's current
customers are potential flight risks, but also that they have a massive opportunity to grow their
business if they can get ahead of the curve with personalized and effective conquest marketing.
Looking back to historic data from the 2008 recession gives us some insights into what may potentially
come for the remainder of 2020 and beyond. OEMs and dealerships alike need to be laser-focused on
limiting brand and dealership defection as consumers return to the market for a vehicle purchase.
Conquest marketing will be an integral part of maintaining market share and accelerating recovery
throughout the remainder of the pandemic and beyond.
EVERY 1% IN
LOYALTY RATE
DECREASE
=
AN AVERAGE OF 90
SALES UNITS LOST
NEAR-TERM BUYERS
OPEN TO SWITCHING
56%
59%
RETURN-TO-MARKET MIX
BY HOUSEHOLD TYPE
29%
53%
19%
IHS Markit
Time Period: February 2020 R12, IHS Markit Autotrader
