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

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

“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?

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.

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.

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.

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”.

discovered his niche and has become a mini affiliate.”

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

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.

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.

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. 

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.

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.”

About Author

Comments are closed.