The Hindu Business Line : Car makers bank on customer referral to push sales

Word-of-mouth advertising is not just free, but it could also be rewarding. Auto companies such as Honda Siel Cars India, General Motors and Maruti Udyog Ltd are looking at offering incentives to their customers for referring their products among their friends and relatives. Be it in the form of an extended warranty, some accessories or gift vouchers.

For a company like Honda Siel that does not give discount to its products or advertise aggressively, it has fewer ways to attract customers. But the company is banking on its existing customers’ references to boost its sales. Honda had one such programme that was launched in June-end and is expected to continue up to October.

“Our basic approach is target marketing. We neither offer discounts nor advertise aggressively except when there are new product launches. But we have customer referral programmes as they are our only brand ambassadors,” said Mr Jnaneshwar Sen, Senior General Manager, Marketing and Sales. He said that about 300 cars were sold in last two months, making it about 4 per cent of the company’s overall sales.

Target marketing

A Honda dealer said that about 30 per cent of its sales are through such schemes. It not only offers accessories, free services to its existing customer but also offers similar incentives up to three of its references that get converted into sale.

Similarly, General Motors also had such a programme during Rakhi and Onam recently.

“With Chevrolet marketing revolving around building relationships, we emailed our customers on our loyalty programmes in which we were offering them accessories worth Rs 5,000 on referring Spark in their social circle,” said Ms Anisha Motwani, Director, Marketing, General Motors India.

While such an initiative is not merely for sales but also to build a reassurance among the customers for choosing Chevrolet brand and recommending it to others, she added.

Maruti Udyog too has its auto-card programme that allows its customers to earn extra points when their references get converted into sales. Launched in 2006, the company has issued 2.78 lakh auto cards. “The programme has started showing encouraging results now,” said the company spokesperson.

A leading Maruti dealer attributes 15-20 per cent of sales through such programme.

More Stories on : Cars | Strategy | Maruti Udyog Ltd

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