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Claire Kavanagh on sorting the Giffgaff from the riff raff

The way traditional telcos work, you’d imagine a mobile phone network with tens of thousands of customers would have a call centre to service the inevitable service issues and enquiries. Not Giffgaff, the UK-based mobile virtual network operator (MVNO) that broke the traditional Telco mould by creating an entirely online service that puts much of the power into the hands of its customers. And fronting the member experience arm of the company is Kiwi lass Claire Kavanagh, who was in town last week for the Marketing Association’s Direct Marketing event. We managed to steal a moment of her time between speakers to have a chat about the unique Giffgaff model and ask whether it could be done in New Zealand.

GiffGaff is part of the Telefonica Group and rents its mobile network from O2, also part of the Telefonica Group. It was O2’s head of brand strategy, Gav Thompson, who founded the service after receiving a dose of inspiration at a crowd sourcing conference in the US.

“He believed mobile could be done differently and better, in a mutual, transparent and collaborative way,” comments Kavanagh, who has worked in the telecommunications industry for over 10 years.

The company was launched in November 2009 and from the offset gave its burgeoning customer base the power to participate in everything from sales, marketing and customer service.

With no call centre in sight, all of Giffgaff’s customer service is carried out online, which forms the most unique part of the business model. Customers can post questions in the forum, which Kavanagh says are typically answered within 70 seconds, 24 hours a day, seven days a week. Elsewhere, more experienced users are encouraged post answers in the FAQ help section and there’s even incentives to create and upload tutorial videos, which can earn you anywhere from £5 to £10 per video. And if you’ve got a good idea, be it marketing or otherwise, you can post it on the ideas page.

“In excess of 95 percent of our customer service is either them doing it themselves through self-serve or though asking questions in the forum and other member answering those questions,” notes Kavanagh.

But if you absolutely want a phone number, “go elsewhere” she advises.

So how do you vet against members posting bogus information?

“Somebody’s who’s been there for five minutes won’t have the same access and responsibility as someone who’s been there for a significant amount of time providing good information,” she says.

Company staff are also there to can intervene online when required.

In the UK alone, smartphone penetration has surpassed the 11 million mark and because they’re more complex to operate initially, Kavanagh says they tend to increase calls to call centres.

Customer service is a major part of costs incurred by Telco’s so it’s about creating a system that more efficiently deploys resources.

“The aim is a deflection of calls so that resource can be up skilled and used in better way,” she says. “If you could deflect even just 1 percent of calls, what does that mean to the efficiency within the call centre?”

To reward its customers for their service, the company has created a system of payback. Customers earn points for their service and then twice a year can get that money back as a charity, cash or credit payment.

But Kavanagh says we’re not talking big money for helping out.

“A super user could spend between 10 and 15 hours a day, seven days a week, and their reward element is about £27 for the month. They’re doing it for the love and recognition, not the money.”

She does, however, note an exception where one its members, who is all of 17 years of age, has earned over £16,000 in the last six months and has connected “well over 2000 people”.

“He’s discovered his niche and has become a mini affiliate.”

Members have the option of receiving personalised URL’s that enables them to publicise their order page, be it via a blog, Twitter, Facebook, or their own micro site.

“When you go onto my order page, that order is linked to me and when that sim is activated, you’re rewarded with your £5 credit and I’m rewarded with my five points.”

Not surprisingly, the member-get-member system looks to be doing wonders for the company’s marketing costs. With the exception of some one-off tube advertising to promote the network’s launch, its entire adverting campaign is carried out online through the likes of banner advertising and referrals.

“It’s massively lower than trying to do cold, online marketing,” says Kavanagh. “The other part, which is really nice, is that if you’ve been recruited through a friend, rather than cold self-discovery. That means you’re more likely to stay making you a more valuable customer.“

Kavanagh is surprised 2degrees hasn’t done more in the online space, but says new player on the block, Skinny, is still “small and nimble enough” to create a compelling online proposition.

Elsewhere, she says there’s room for improvement in terms of existing Telco’s in New Zealand, using Giffgaff as an example to understand how you can save money on customer care, especially, she says, with the upcoming 4G network costing so much to develop. 

“Somewhere needs to reduce costs in order for that investment to be sustainable.”

And it certainly seems to have worked for Giffgaff.

“People are absolutely willing to do it for themselves and our retention rates are three times better than industry average,” she says.

Whether or not that’s the case (Giffgaff is notorious for being secret squirrel about its customer data), the MVNO has recently encountered a number of hiccups in its system, perhaps symptomatic of its growth. Problems include some customers being without a connection for three weeks, a mix up in customers’ numbers and difficulty topping up.

Giffgaff told The Register: “Due to the big rise in numbers of new customers, this has had some adverse affect on our current customers being able to carry out transactions such as topping up or purchasing a goodybag, as all transactions go through the same channel."

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