What has been the most interesting sales promotion you have engineered so far?
I would say the Rapid EMI Holiday Offer, which we started in 2012, has been an interesting promotion given that it allowed us to give an attractive offer to our customers without reducing the price tag of the car. Our research shows that 70 per cent of customers in India buy cars on finance schemes. This segment is taking loans from financial institutions to fund their vehicles.
It was evident Skoda would have to look at an interesting finance scheme-related sales promotion to benefit not just the customer but also the company. Under the Rapid EMI Holiday Offer buyers could drive away with a Rapid sedan without paying anything for the next one year after which they could avail of unique EMI offers from Skoda Finance to make the payments.
Who did you primarily target with it - new or existing customers or both?
Rapid is pegged in the market as the entry level sedan and the sales promotion to 'buy in 2013, pay in 2015' looked at new customers who were looking to graduate from a hatchback to an entry level sedan. The idea was to allow this new set of customers to consider our brand as well.
We were also targeting customers to leapfrog directly to a sedan through this campaign that allowed an 'EMI holiday' for a year. This was our core target customer though many of our existing consumers got interested in the scheme.
What kind of promotion was it?
It was a finance scheme led promotion and the offer was around the "value" attached to the car. We stayed away from the idea of giving a discount on the car; we did not want to reduce the value on the car. Instead, we added value to the scheme and according to our customers who availed of this offer, the value addition was immense.
Why was it designed so?
You must remember that December is a month of high stakes for car manufacturers. By this time, customers have already purchased their vehicles and manufacturers are under pressure to get rid of the remaining stock before the year-end. This is a reason why many car companies start offering promotional offers for their respective brands around this time. As I mentioned earlier, this particular offer was not designed to bring down the price of the car.
However, Skoda was committed to give customers an attractive offer to come and engage with us and experience the brand. We firmly believe that a person who comes to us, ready to spend Rs 10 lakh, is not going to be taken in by discounts of Rs 3,000-5,000. The attractive financial offer allowed us to interact successfully with that customer.
What were the challenges?
The overall auto sector in India is on a decline and our biggest challenge was to arrest the decline and turn it around for us. The Rapid EMI Holiday Offer worked well in our favour. Given that not many in the market offer such promotions, there was an initial challenge to convince our customers that this promotion was genuine and they really didn't have to pay EMIs for a year.
Who partnered you in it?
We offer finance and insurance solutions through Skoda Finance and for this scheme - like for all our other similar promos - we tied up with it.
How effective was the exercise?
The success of this promo has shown that the discerning car buyer is always looking for hassle-free and efficient ways of getting their vehicles financed. The enquiries - post the announcement of this campaign - have doubled and though I cannot share the data on the number of units sold through this scheme, the fact that we have started the second phase of this campaign last week clearly shows the promo was successful.
Don't sales promotions incur high long-term costs for the company?
Not when the company doesn't bank on just that one campaign. We don't have just one or two finance schemes running at Skoda. This campaign allowed people to come and interact with our brand and buy into other bouquet of schemes too.
Cars will not sell on the back of just one random scheme. People have purchased Skoda brand of vehicles through other finance schemes even though their entry point of interaction with our brand was through the Rapid EMI Holiday offer. If we did feel that the campaign wasn't working or we had incurred high costs, we would not have started its second phase. For us it was a crowd-drawing campaign with no long-term costs for the company.
Rapid EMI Holiday Offer
Aim
To enable customers leapfrog directly to a sedan segment
Target
New customers who are looking to graduate from a hatchback to an entry level sedan
Plan
It is a finance scheme-led promotion and the offer is around the 'value' attached to the car. Under the Rapid EMI Holiday Offer, buyers can drive away with a Rapid sedan without paying anything for the next one year after which they can avail of unique EMI offers from Skoda Finance to make
the payments
Outcome
The enquiries - post the announcement of this campaign - have doubled. We have started the second phase of this campaign last week. This shows the promo has been successful
