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Hero MotoCorp Boosts Topline with Customer Engagement

Anup Varier June 12, 2012
Hero MotoCorp Boosts Topline with Customer Engagement
The GoodLife loyalty program has gained more than 10 million members and contributes directly to Hero MotoCorp's revenues.

The automobile sector is not best known for its customer loyalty programs. Engagement levels aren’t like in the retail industry where customers visit the stores on a weekly, fortnightly or even a monthly basis. Buying a two-wheeler in India is usually considered a one-time affair and it is believed that there is very little the manufacturer has to offer once the vehicle is bought. After the initial period in which the company offers a couple of free services, the riders prefer to entrust their vehicles in the hands of cheap and untrained road-side mechanics who would in turn rely on duplicate spare parts.

Hero MotoCorp, the largest selling motorcycle manufacturer in the world with quarterly sales of close to 15 lakh (1.5 million) two wheelers, wasn’t satisfied with such an unenthusiastic engagement with its customers. The company wanted to build traction with its customer-base and offer them the specialized care that their vehicles deserved. They believed that trained technicians at its authorized service centers equipped with genuine spare parts could be of much better service to customers.

Off the Block

The need to be in constant touch with its customers gave birth to one of the first loyalty programs in the automotive sector named ‘Passport’ in 2001. Under this scheme the enrolled customers were provided with a booklet that resembled a passport. Each purchase of spares and service would be marked as stamp in this booklet and led to the accrual of loyalty points. The points could then be redeemed against gifts or used for discounts on subsequent purchases. But such a paper-based program had its limitations.

With millions of customers joining the program, it became increasingly difficult to maintain a record of the transaction data and the loyalty points. “The manual processes of Passport were difficult to manage and there were always challenges in ensuring authenticity of the data,” says Vijay Sethi, VP and CIO, Hero MotoCorp. Real time communication of information was also a challenge and there were considerable delays and discrepancies in transferring data from dealerships to the company. These inconsistencies made the analysis of the customer data very difficult. Add to this the worry of the number of trees felled to produce the booklets and the management had an issue on its hands.