GiffGaff – a case study of customers in control

It’s relatively easy these days to find point examples of social CRM in action across marketing, sales or customer service; but few organisations have a holistic Social CRM strategy in place. Paul Greenberg recently wrote a case study on Proctor & Gamble, who seem to come the closest (despite not calling what they do “Social CRM”).

One of the best case studies I’ve come across is a UK-based Mobile Virtual Network Operator (MVNO) called GiffGaff. I was lucky enough to recently meet some of their staff who talked me through the business model.

The GiffGaff story is one of David vs. Goliath. GiffGaff are part of the Telefonica Group. They rent their mobile network from O2 and sell pre-pay SIM cards and actively compete against the traditional Telco companies. Unlike most mobile operators with large fire-fighting call centres, GiffGaff have just 14 employees and no call centre. They challenged the traditional MVNO model by handing control over to their customers. Here’s how:

Product co-creation - right from set-up GiffGaff engaged their target market in 2 way dialogue, asking potential customers and early adopters to decide on how best to structure their tariffs. Similar to Dell IdeaStorm, GiffGaff have continued their Ideas page and at the point of writing they have implemented 112 ideas direct from their community.

Community support – the GiffGaff community is perhaps best shown within customer service. All of GiffGaff’s customer service is online. They pro-actively push information out to their notice boards page e.g. service issues. They publish customer-generated tips and tricks and FAQs. They also make extensive use of their community forum for peer to peer support (supported by intervention and moderation by GiffGaff employees when required).The community has radically cut customer support costs compared to the traditional contact centre-centric model. GiffGaff estimated that if O2 could replicate the model with just 25% of their customers participating, they could save c£20m per year.

Payback Scheme - Perhaps the most innovative aspect of the community forum is that users are incentivised to participate through the use of a payback scheme. The payback scheme rewards GiffGaff members for helping GiffGaff out with Kudos points which can either be redeemed for pre-pay credit, or donated to charity (of course a charity of the community’s choice!).

Social Marketing – GiffGaff’s above the line marketing is minimal for a Telco company. Instead they prefer their customers to spread the word on their behalf. Again they use Kudos points as an incentive - customer’s get 50 points each time they e-mail a friend or 500 points for each SIM card they send to a friend that is activated (where 1 point = 1p). That’s not a bad cost of acquisition and advocacy generates 25% of new customer connections.

GiffGaff’s results so far have been impressive and pretty interesting:

• 50% of customer questions are answered via the community (as opposed to online self service or GiffGaff employee moderation).
• The average response time for any question posted in the forum (24x7) is under 3 minutes and 95% of all questions are answered within an hour. I suspect most Telco call centre customers would still be navigating an IVR after 3 minutes, let along speaking to an agent or having their problem resolved!
• GiffGaff‘s NPS score is 75 - way above the industry average and approaching that of Google or Apple. They publish their customer satisfaction scores here.
• GiffGaff have found that the traditional 90-9-1 model of participation (See Michael Wu’s blog for an explanation) has changed with their rewards system. They estimate that they have a  1-25-74 model i.e. a much higher percentage of occasional forum users.
• GiffGaff found that their top ten super-users spend an average of 9.5 hours per day on the community site. Some super users have gone to extreme lengths to support GiffGaff; stepping in to quash negative complaints and building their own status badges for the forum. GiffGaff’s customers even built them an iPhone app.
• Because of the exceptional levels of support within the community, GiffGaff have also found that some users have started to donate their points back to the super-users who have helped out most within the forum.

Now clearly as a start-up, GiffGaff have some unique advantages. They do not have an existing large and diverse customer base or existing investments in call centres. They can afford to target a very specific niche of customers who are happy for their relationship to be conducted entirely online. However, that’s certainly not to say that traditional contact centre-centric companies cannot learn anything from the GiffGaff model.

Disclaimed and disclosure: I have no affiliation with GiffGaff, either as a customer or as a client. They have not paid me for writing this article (or given me kudos points!).