hero honda focuses on crm

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Hero Honda focuses on CRM; may slowly slash advertising news

Mohini Bhatnagar

23 April 2003

Mumbai: Hero Honda Motors, the joint venture between Munjal promoted Hero Motors and

Honda Motor Co of Japan, is focusing on its customer relationship management (CRM)

programme to drive growth.

The company has secured over 1 million members in the last three years with the Passport

Programme, which involves offering members a small card/booklet that looks like the Indian

passport, complete with ''visa'' stamps for points, similar to those offered by credit card

companies and airlines. The only difference in this programme is that the member need not

always spend money to obtain points, say company officials.

With the passport programme, each time a Hero Honda customer visits a service centre, he gets

points and depending on the profile submitted by the customer, he gets benefits like free passes

to a cricket match sponsored by the company.

Hero Honda Motor India vice-president (sales and marketing) Atul Sobti says under the

programme a customer can collect points by merely visiting the service centre, which he wouldhave done in the normal course of things. "Hero Honda scheme rewards customers even for free

services."

Whatever you do as a normal customer entitles you to some gift, he says. "We prefer the

Passport Programme because we can talk to our customer on a one-to-one basis, rather than put

up a big ad and hope that out of 10 lakh people, 1 lakh will respond. The company will, in the

long run, increase focus on the CRM programme and cut down on print and TV advertising to

expand the programme and its freebies."

Membership to the programme comes for a nominal fee of Rs 95 for three years. Not just this,

along with the programme a customer gets a Rs 1-lakh accident insurance policy for which

Hero Honda has tied up with New India Assurance Company.

At present the company has allocated just about 5 per cent of its advertising budget towards

building up the Passport Programme and Sobti says this could go up to 10 per cent very soon.


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"The company factors in the costs as part of its advertising and media spend budget."

Another customer service initiative to be launched jointly by Hero Honda and State Bank of

India is a co-branded credit card. This time SBI Cards & Payment Services (SBI Card) is

teaming up with Hero Honda Motors to offer the Hero Honda SBI Card, the first card for the

two-wheeler industry in India. SBI card is said to be India''s No 1 Visa card-issuer with over 11

lakh cards issued. The co-branded card is designed to strengthen Hero Honda''s Passport

Programme.

Company officials say the co-branded initiative will allow SBI Card to reach out to Hero Honda

customers (a vast middle-class segment and possibly first-time users of credit cards). In the first

phase of rollout, the co-branded card team, comprising executives from both Hero Honda and

SBI Card, will target four cities - Delhi, Kolkata, Chennai and Pune. In the second phase 66

cities will be covered and in the third phase 100 cities.

Hero Honda Motors recorded a 25-per cent increase in its net profits to Rs 581 crore and a 14-

per cent higher turnover at Rs 5,195 crore for the year ended 31 March 2003. The company has

also announced a 900-per cent dividend for the year, which includes a dividend of 500 per cent

and a special dividend of 400 per cent. But for the fourth quarter ended 31 March 2003, Hero

Honda''s net profit fell by 2.36 per cent to Rs 148.96 crore from Rs 152.56 crore a year ago.

Total sales also went down by 3 per cent year on year to Rs 1,248 crore from Rs 1,286 crore.

Net sales were also lower by 3.2 per cent at Rs 1,215.40 crore during the January-March quarter

against Rs 1,255.50 crore in the same quarter of 2001-02. This was mainly due to a nearly 1-per

cent drop in motorcycle sales which slipped to 3,96,193 units from 3,99,200 units last year.

The Hero group and Japan''s Honda Motor Company each have a 26-per cent holding in Hero

Honda while the remaining shareholding is with financial institutions and the public.

When Hero Cycles and Honda Motor Company of Japan inked their joint venturein India in April 1984, only few could have imagined that the two would go on tocreate history and become the subject of a case study at business schools,internationally.


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In a little over two decades, the world's largest manufacturer of bicycles and theglobal leader in motorcycles have created not only the world's single largestmotorcycle company but also the most endearing and successful joint venture forHonda Motor Company worldwide. The company has sold over 31millionmotorcycles and has consistently grown at double digits since its inception and

today, every second motorcycle sold in the country is a Hero Honda.

Hero Honda bikes currently roll out from its three globally benchmarkedmanufacturing facilities. Two of these are based at Dharuhera and Gurgaon inHaryana and the third state of the art manufacturing facility was recentlyinaugurated at Haridwar, Uttrakhand. These plants together are capable ofproducing 5.0 million units per year.

Hero Honda's extensive sales and service network now spans over 3000customer touch points. These comprise a mix of dealerships, service and sparepoints, spare parts stockists and authorized representatives of dealers located

across different geographies.

Hero Honda values its relationship with customers. Its unique CRM initiative -Hero Honda Passport Program, one of the largest programs of this kind in theworld, has over 5.4 million members on its roster. The program has not onlyhelped Hero Honda understand its customers and deliver value at different pricepoints, but has also created a loyal community of brand ambassadors

YES AWARD INDIA

Objective:-The Honda Young Engineer and Scientist Award in India (YES Award in India)program is designed to strengthen Japanese ties with India through provision offinancial aid to young engineers to encourage specialized study in ecotechnologyas well as provide an opportunity to acquire higher professional education inJapan. This is part of the Honda Foundation (HOF) efforts to strive for a moreenvironmentally balanced development of the industrial and science-basedmodern civilization including India, which has enjoyed fast-paced growth ineconomy since its liberalization in 1991.

BENEFITSThe Award would recognise brilliant students who would drive future societytowards an ecotechnological orientation. Each YES Award recipient will receiveUS$ 3,000 (US Dollar Three Thousand only) in equivalent Indian Rupees.

Every YES Award recipient becomes eligible for the YES Award Plus, anadditional award, if, within three years after he/she received the YES
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Award prize, he/she is admitted to, and pledges to attend within one yearafter admission, either of the following:

1. A credit-granting internship program offered by a Japanese company orresearch institute's summer program for two and half months. Internshipparticipants will receive US$7,000 (US Dollar Seven Thousand only) or

equivalent Indian Rupees as theYES Award Plus.

2. A masters or doctoral course at a Japanese graduate school. Thesestudents will receive US$10,000 (US Dollar Ten Thousand only) or equivalentIndian Rupees as the YES Award Plus.

How has SAP helped automotive companies and dealers to serve the end consumer better?

SAP Computer Software maximizes the value for each customer by decreasing service cost s through greater

efficiency, and increasing service revenue. With SAP CRM, automotive customers can provide service professionals

with the information and tools they need to effectively and profitably plan, execute, and analyze service processes.

This helps to track service contract entitlements, to eliminate service leakage and achieve service-level

performance metrics. It equips agents with the tools they need to resolve customer issues on the first contact,

boosting customer satisfaction. The application supports field service professionals for quick and effective

resolution of problems in remote locations and provides 247 self-service for online customer support at a fraction

of the price of regular phone support. With the applications service analytics and SAP Business Object s Business

Intelligence (BI) solutions, automotive customers can make smart business decisions.
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hero honda focuses on crm

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