Chat iconGet in touch

How the community based model is driving the need for a second brand

By April 12, 2018 No Comments

I got asked a question recently, should customers be asked to vote on a core feature of its product. I immediately responded to say yes. Why wouldn’t you. After all your customers are core to your business so to have them somewhat involved in the decision making process has nothing but positives. It gives the customer a sense of ownership or loyalty to the product as they feel they had some part to play it its development. So what has this got to do with telco?

There is a growing emergence of community based reward schemes within the industry. A community based reward scheme is where you put customers in control. You allow them to become your care agents on behalf of your brand and in recognition of this work, you reward them. You may offer more data, discounts off their plan, discounts of third party products etc. This means there is no need for call centres full of agents dealing with mundane queries which helps improve the P&L. According to a recent report by Lithium, 95% of queries were answered with 60 minutes and with an average response of queries within 3 minutes. (Source: https://www.lithium.com/pdfs/casestudies/Lithium-giffgaff-Case-Study.pdf).

You also enact a member get member scheme which means your customers then become your sales agents. Again, the service providers reward their acts with discounts or more stuff towards their plan. Even more interesting, if the member that they acquired acquires another customer, the original member gets a small reward. This creates a nice sales funnel that is very low cost/low touch for the service provider. All this functionality bestowed towards the customers helps towards improvements in churn, brand loyalty and improves the NPS score.    

But it’s not as simple to set up as you might think. Most service providers systems do not have any of the functionality to be able to offer such services, to be able to enact the offers and discounts on a continual basis and to ensure that the offers/discounts are legitimate based on actions within the community. To actually enact this, service providers are setting up digital sub/second brands. This means you are starting with a clean slate, new branding, new messaging that might be targeted at a certain cohort of customers. This second brand will be significantly less expensive to run but at the same time gives you more flexibility to give your customers what they want. A lot of big telco brands globally are looking to set up these digital second brands to target the youth market in particular who have lower disposable income but are willing to get involved in a community based approach if it means getting discounts or more data. 

 

Check out our latest white paper that goes into more detail of benefits of why a service provider should consider a second brand. You can download the white paper from here