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 would have 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. "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.