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Loyalty Programs In The Success Of Hero Honda Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 2819 words Published: 1st Jan 2015

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“Customer loyalty is when an organization receives the ultimate reward for the way it interacts with its customers. Loyal customers buy more, buy longer and tell more people – that’s true customer loyalty”.

Although customer loyalty is often achieved through offers, discount coupons, rebates and other kinds of rewards, long-term customer loyalty can only be created by making your customers feel that they are your number one priority. Competitive advantage can be achieved through customer loyalty. This is the way to gain the best kind of customers, repeat customers. Repeat customers tend to spend more money and provide the best word-of-mouth advertising. Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior – behavior which is potentially of benefit to the firm.

Customer loyalty, not customer satisfaction, is key to the success of an organization, and customer loyalty is fostered when an organization excels along two dimensions:  

Design of its Products – including its Service Products

Operational Execution – or Conformance – to the Design

Many companies focus on rewarding customers who have repeat purchases. Such reward programs have their place in assuring customer loyalty. However, if the product or service doesn’t meet customer needs, no reward program will keep them returning. For success in the long run, an organization must:

Continuously improve

Quickly identify and resolve problems to the customer’s satisfaction — or more

The first step in customer loyalty research programs is formulating the objectives. Next, the current state of customer loyalty needs to be documented. That is, what is the satisfaction level and the defection rate? Then, data collection projects, such as survey questionnaires and other research tools, must be developed. The goal in these tools is to find out customers’ satisfaction level and how many customers are defecting.

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Customer Loyalty has become a catch-all term for the end result of many marketing approaches where customer data is used. We can say Relationship Marketing or Database Marketing or Permission Marketing or CRM, and it is trying to increase customer loyalty – getting customers to choose to buy or visit more. All of the above approaches have two elements in common – they increase both customer retention and the LifeTime Value of customers. Customer loyalty is the result of well-managed customer retention programs; customers who are targeted by a retention program demonstrate higher loyalty to a business.

About Hero Honda

Hero Honda’s mission is to strive for synergy between technology, systems and human resources, to produce products and services that meet the quality, performance and price aspirations of its customers. At the same time maintain the highest standards of ethics and social responsibilities.

Hero Honda is the only two-wheeler company in the country with a 100 per cent motorcycle exposure. Although its sales have grown at a good clip over the past year, a bigger motorcycle pie and greater competition has resulted in a fall in the company’s market share-51 per cent in August 2001 to 47 per cent this August.

 To counter the competition, the company is looking to create an intermediate category with its latest model, the 133-cc Ambition. This bike is targeted at users who wish to move to a high-end model but wouldn’t like to shell out premium model prices. Hero Honda is taking it easy on launches. Besides Ambition, it is looking at a 200-cc bike next fiscal and a relaunch of CBZ, which has been steadily losing out to Bajaj’s comparable offering Pulsar. Says Sobti: “We will move into launch mode only when we believe there is a demand for new products, not as an attention-getting tactic that will uselessly crowd the market.”

Instead, the company is focussing on maximising sales of its existing product basket. To this end, the company has upped ad spend over the past year. It offers a two-year warranty on all its motorcycles (the only two-wheeler manufacturer to do so). Another key initiative is a customer loyalty programme, “Hero Honda Passport Programme”. Subscribers are entitled to discounts on spares and service.

Customer loyalty Programme in Hero Honda i.e

“Hero Honda Passport Programme”

Hero Honda Passport Programme

The Hero Honda Passport Programme is open only to Hero Honda motorcycle owners/customers who are resident Indian nationals. It is not open to non-resident Indians, employees of Hero Honda Motors Limited, and its advertising agencies (Result: McCann and its respective subsidiary companies).

The Hero Honda Passport will be issued in the name of an individual only, and not in the name of a company, corporate body or association of persons.

The Hero Honda Passport will be issued only to individuals who are 18 years of age, or older.

There is a non-refundable registration fee for the programme.

Two passport-sized photographs must be attached to the application form.

The Hero Honda passport is non-transferable.

In case, an applicant is the second or subsequent user of the Hero Honda motorcycle, he/ she is required to submit a copy of the registration booklet, duly transferred, along with the Hero Honda Passport Application form.

If any Hero Honda Passport holder loses his/her Hero Honda Passport, a new copy of the same will be issued to the member, on payment of the requisite fee.

The Hero Honda Passport is valid only for three years from the date of issue.

It will take minimum of 4 weeks, from the date of enrolling for the Hero Honda Passport Programme, to deliver the Hero Honda Passport.

On becoming a Hero Honda Passport Programme member, the applicant authorises all the organisations, with which Hero Honda Motors Limited may finalise arrangements (including Hero Honda Motors Limited), to use data submitted by him/her for marketing and communication purposes, to enhance performance of the Hero Honda Passport Programme.

In case of non-receipt of the Hero Honda Passport, it is mandatory for the applicant to intimate the Hero Honda dealership within 45 days from the date of application.

In case of loss/theft of the Hero Honda Passport, the member must inform the Hero Honda dealership immediately.

Hero Honda Motors Limited reserves the right to reject any application at its sole discretion, without assigning any reason.

Hero Honda Motors Limited is not responsible for any damaged/mutilated/lost -in transit/incorrectly filled forms.

All Hero Honda Passports, even after their issuance, remain the property of Hero Honda Motors Limited.

Hero Honda Motors Limited will not accept responsibility for circumstances that are beyond its control, and that may cause a delay or inability to fulfill requests of the Hero Honda Passport holders.

Hero Honda Motors Limited holds out no warranty, and makes no representation about the quality of the goods and services provided by partners in the Hero Honda Passport Programme, and will not be responsible if the goods/services are defective/ deficient/unsatisfactory, in any way.

Hero Honda Motors Limited is not responsible for any liability incurred by the Hero Honda Passport holder, with respect to any aspect of the Hero Honda Passport Programme.

In case of any disputes of differences in connection with the Hero Honda Passport Programme, the same shall be decided by arbitration. The arbitrator shall be the Managing Director, Hero Honda Motors Limited, or any person nominated by him. The arbitration shall be conducted as per the prevailing arbitration laws rules in New Delhi.

Hero Honda Motors Limited shall not, in any way, be liable, or be under any obligation to the participant, if the Hero Honda Passport Programme is withdrawn or modified due to statutory enactment’s, and judicial/ quasi judicial orders.

Hero Honda Motors Limited reserves the right to add, modify, withdraw or delete any of the rules, terms, conditions or the duration of the Hero Honda Passport Programme, with or without prior notice.

How to use your Hero Honda Passport?

Each time you visit an authorised Hero Honda dealership or service center, make sure that you carry your Hero Honda passport with you.

Customer can accumulate points against purchase of spares, accessories and service at Hero Honda authorised dealerships / service centers.

The Hero Honda passport will serve as a record book for keeping an account of the points accumulate by you.

Each rupee you spend, at the dealership / service center, entitles you to one point.

Customer can also earn bonus point when you come for a free service you visit the dealership ( at least thrice a year ), and make purchases worth Rs. 50 per visit.You refer your relatives and friends to purchase a hero Honda motorcycle.

At the time of setting your bills, ensure that your Hero Honda passport is endorsed with the earned points.

The more you earn your points, the more benefits you receive.

What are the benefits of owning a hero Honda passport ?

The accumulated points can be used to enjoy a host of special privileges and benefits from time to time.

The moment customer receive its hero Honda passport, he is automatically covered for one year Accident Insurance RS 1 lakh.

Customer become entitled for special rewards and discounts, the moment you accumulate the specified points, at any of the authorised hero Honda dealerships / service centers.

Customer can also receive invitations to exclusive local events, such as movie shows, musical nights and carnivals.

Periodic updates will be sent to you, from the hero Honda programmed center, with your point status. Special information and tips regarding your motorcycle, hero Honda Passport Program happenings and exclusive offers from other brands will also be sent to you along with the updates

Hero Honda CRM programme

Hero Honda has covered two million customers under passport programme. The passport programme builds enduring relationship with customer. It was rolled out nationally in 2001. According to the scheme, every rupee spent by the member translates into a reward point. These reward points can then be redeemed for gifts, the release adds.

Hero Honda GoodLife Program

We invite you to our ‘Rishta Dil Ka’ bond to give us an opportunity to share what we have in store for you. All you need to be a resident Indian national, aged 18 years or above and you should be an owner of Hero Honda scooter or motorcycle to be a part of One of the largest customer relationship program in India. The Hero Honda GoodLife Program offers you great rewards, benefits and a range of exciting gifts, chosen especially for you. Becoming member of this exclusive program is simple and easy. All you need to be a resident Indian national, aged 18 years or above and you should be an owner of Hero Honda scooter or motorcycle. Simply follow the steps outlined below and you can start experiencing the privileges of being a member of India’s largest rewards program.

Fill the fresh online application at the dealership. If you are a Hero Honda Passport member, kindly submit the Passport at the dealership.

For three years membership and one year insurance cover pay a nominal membership fee of Rs. 150, or for three years membership and 3 years insurance cover pay Rs. 250.

To know more call 1800112255 or write to us at goodlife@herohonda.com

On successful enrolment, you will receive a Hero Honda GoodLife membership card which will help you earn points on all your spends at Hero Honda dealerships and service centres. You can accumulate points and redeem them for a range exciting milestone rewards.

Rewards And Benefits

The Hero Honda GoodLife Program is your very own passport to the good things of life. It brings you an easy to use privilege card that offers a host of special rewards and benefits. Providing you with fabulous returns on your spends, it is surely the most convenient way to complement your good life.

Your world of rewards:











Be A Hero Honda Good Rider

Loyalty is demonstrated by the actions of the customer; customers can be very satisfied and still not be loyal. So, as a CRM strategy and for customer satisfaction they promoted themselves as Socially responsible company. Therefore as a socially responsible company they urgecustomers to join them in making this world a safer, healthier and more environment friendly place. At Hero Honda they like to promote the three E’s.

Engineering – which is the right technology, specifically designed for Indian customer requirements, and road conditions. It is exemplified in the 4-stroke Hero Honda engines that give you amazing reliability and fuel-efficiency, year after year. We have always manufactures 4-stroke engines, ever since inception in 1985.

Environment – which is about ensuring that the high technology 4-stroke Hero Honda motorcycles continue to meet the most stringent pollution control norms at every level – as they have since the very beginning.

Education – which is about promoting comfortable and safe driving, through a wide dealer network and service centres; as well as in educating people on road safety, in association with the traffic police and the transport department. Do remember that you and your family are not only riders, but pedestrian as well.

It is as part of the Hero Honda family that ‘We Care’ to drive home the message of Road Safety and a Healthy Environment.

Your Hero Honda, the environment and you.

It is a three-way relationship that you should nurture, to reap the benefits for years to come. A well tuned bike keeps the environment healthy. Good riding practices will keep you healthy. Taking good care of your bike will always keep your bike healthy.

Here are simple steps to a healthy bike, healthy environment, and a healthy you.

Health and Environment


Facts and Information

Social Responsibility

We are certain that you too will take pride in being a true Hero Honda Good Rider .

Success of loyalty program to the Hero Honda

For the success of loyalty programme the organisation have to answer these parameters….

Identify the key processes in building a loyalty program

Create and map the loyalty business case by engaging all internal stakeholders and getting executive-level sponsorship

Gain maximum internal support that drives truly commercial performance

Turn customer insights into actionable marketing strategies

Apply advanced customer segmentation and propensity modeling techniques

Implement various financial planning tools for your loyalty program

Maximize the marketing ROI of relationship chain and branding with your loyalty program

Confidently reap the rewards of the loyalty program and, demonstrate and justify the success of your loyalty program


Customer Satisfaction and loyalty plays a major role in developing and promoting the company. Customer loyalty is an important factor, which affects the Financial position and Goodwill of the company. Customer demands are dynamic, but its consideration is necessary for every company to make existence into the market. Loyalty programs are increasingly gaining popularity in the Asia Pacific region. And company uses the various loyalty programmes like “Hero Honda Passport Programme” in Hero Honda. It is the CRM initiative taken by the company to:

Brand awareness of Hero Honda motor cycles.

Know about the time in which customers usually purchases bikes.

Know about the effect of promotional schemes on customers.

Purchase pattern of customers

To know about the media through which customers come to know about the bikes

For database.

Encourage, loyal buying behavior – behavior which is potentially of benefit to the firm.

So these all loyalty programmes are very helpful in success of HERO HONDA.


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