Indian motorcycle manufacturer Hero MotoCorp and its Kenyan partner Ryce East Africa have launched free personal accident cover for riders with every motorbike purchase, in incentive marketing designed to increase sales and market share in a rapidly evolving market.
“Bodabodas are increasingly becoming the most favoured and used means of transport in both urban and rural areas in Kenya, while employing tens of thousands and contributing up to Sh400 million to the economy on a daily basis.
This new product is designed to protect riders from financial losses arising from accidents,” said Mr V.N Srinivas, the Ryce East Africa managing director.
This kind of incentive marketing could see the companies increase their customer acquisition as consumers are more likely to refer others to a product when they are offered an extra incentive.
According to a 2014 study by research company Software Advice, direct, monetary or material incentives encourage customers to refer a friend or colleague to use the product or service of a brand.
“The results showed that material or monetary incentives have the most direct impact on customers’ likeliness to give a referral.
39 per cent of consumers that we surveyed said that they are more likely to refer a friend or colleague when offered such an incentive. So if companies had to choose a single strategy to increase customer acquisition, offering incentives would be an effective low-effort choice,” read the report.
Indeed, incentive marketing provides a strategy for brands to engage with consumers in a beneficial way for both.
“It is a ploy that brands embrace so that their brands can relate to their consumers; it has the added advantage in that it can lead to advocacy in consumers increasing customer acquisition,” said Bruce Gumo, a marketing analyst at Biztrace, a marketing solutions agency.
An example of a company that successfully employed this strategy was UK’s health food retail shop Holland & Barrett International. In a bid to appeal to the younger Ireland consumers, it launched Rewards for Life mobile application that enabled customers to collect points as they shop and win prizes.
By 2016, more than 600,000 consumers were actively using the programme to shop in the 50 stores countrywide daily.
“This suggests that 13 per cent of the entire population of the Republic of Ireland is shopping with a Holland & Barrett Rewards for Life card.
The scheme is so popular across the country that now over 70 per cent of transactions in Ireland are completed with a Rewards for Life card,” according to the study conducted by Irish retailers organisation Retail Excellence Ireland.
The incentive marketing strategy can also serve as a research tool for companies seeking to improve their products to meet consumers’ demand.
“Our Rewards for Life programme is invaluable for us as a way to provide our customers with the best possible shopping experience, both on the high street and online.
Not only does it help us to reward Holland & Barrett regulars for their loyalty but it also helps inform us which new product trends our customers are looking for and pick the best possible offers to achieve our goal of making healthy living affordable for all types of shoppers on the high street,” said Tim Lawrence, director of customer marketing for Holland & Barrett.
In the case of Hero MotoCorp and Ryce East Africa, its initial phase into the motorcycle personal accident cover could provide insight on the recurrent financial losses that boba boda riders incur as it seeks to roll out its cover for corporate customers in its next phase.
- African Laughter