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The Pager Madness

Why can’t you buy anything without getting a pager free?

The Pager Madness
outlookindia.com
-0001-11-30T00:00:00+0553

THE grand pager sale is on. Pick up almost anything—Whirlpool appliances, Videocon washing machine, Bajaj scooter, ANZ Grindlays credit card, Shriram Honda genset, Godrej-Pacific business machine, Essar cellphone, even groceries and cinema tickets—and walk away with a pager absolutely free. What’s going on?

True, the festival season has always seen a blitzkrieg of promotional schemes. Old-for-new offers, discounted prices and freebies are nothing new. But what makes the free pager scheme different are two factors. First, the zeal with which diverse companies, from garment retailers to electrode welding shops, are offering free pagers. The reason: the pagers are being offered at the sole initiative of paging firms so that the instruments come absolutely free to a Whirlpool or Videocon owner. As Sunder Hem-rajani, vice-president, Whirlpool, puts it: "It’s a good deal when you consider that a pager is a utilitarian product that adds value to the lifestyle of our customers." The second factor which makes the pager promotion scheme different is that it is part of a well-thought out marketing development strategy by paging service providers. Says Dilip Pall, senior vice-president, Mobilink: "To dismiss the free pager exercise as a festival season promotion exercise or a result of competitive pressure would be wrong because we are looking at it as the start-off to a long-term marketing plan." What’s that plan? For one, demolishing the price entry barrier for new customers and then converting them into serious users. The free pagers, incidentally, come in a package deal that requires the customer to prepay an annual charge of around Rs 1,900. "The greatest challenge is to get a customer to try sending a message. Once he sees the ease and utility of the pager, he is unlikely to give it up. In that sense, the current promotion mela is a very effective strategy to get customers," says Mohan Menon, sales director, Motorola. Almost all paging operators are following up free-pager transactions by actively tracking the consumer through telemarketing exercises. "We are currently doing a research exercise to monitor customer expectations, difficulties-ties and satisfaction levels," says Avneesh Khosla, product manager, RPG Paging. "We are using the new database to disseminate information on the auto paging and voice mail service that we are offering with numeric pagers. The idea is to get the customer used to the cost efficacy and utility of a pager so that it become a part of his lifestyle," says Pall. Through these hand-holding exercises, paging companies hope to consolidate their markets.

Free-pager schemes are also providing paging operators ready distribution channels for their products. Unlike developed markets, in India, a pager is a push product. Pager companies are either directly selling to corporates and government or relying on the friendly next door consumer electronics dealer to sell them. However, unlike TVs or fridges, pagers are not self-moving items. Setting up a retail chain also requires huge investments in real estate, dealer development, training and so forth. The business returns cannot be commensurate with the investments. Retail is therefore going to take a long time to be a viable route for paging companies, says Khosla. Consequently, it is making sense for pager operators to take the promotional route. "Today we are incurring an X amount of loss on free pagers. Our realisation is going to come from the service. For the next one-and-a-half years, we don’t make any money on a person. The cost of the pager is subsidised by the service charge paid upfront," adds Khosla.

Another benefit of the schemes is that they are helping operators reach consumer segments that may not easily be accessible. "When you give a pager free with a washing machine or a refrigerator, you get instant access into a household. You get a chance to demonstrate to a housewife or the children how paging is relevant to his/her own immediate environment. You can be sure that at least one family member who is a potential customer is converted into a permanent one," says Pall.

Still another objective behind the freebie fiesta is to kickstart the dormant numeric pager market. The market growth has been terribly skewed with alphanumeric pagers accounting for 95 per cent share, exactly the reverse proportion of how the mature markets are divided. "This has put a tremendous pressure on the cost, infrastructure, manpower and channel utilisation of paging providers. Hence the free numeric pagers that are also cheap and lower the entry barrier for consumers. It’s a win-win situation for both," says Khosla.

  The results are already showing. All-India pager volumes have jumped from 18,000-20,000 a month to 30,000 since the promotional offers began two months ago. "Our sales have gone up from about 2,500 pagers a month in Delhi to about 3,600. And the alphanumeric versus numeric skew has changed to 60:40," says Khosla. The method behind the apparent freebie madness seems to be paying off. 

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