SALES AT GIFFGAFF – A CASE STUDY OF MEMBER GET MEMBER ACQUISITION
Transforming customers as part of the future of sales by implementing a member-get-member approach in the giffgaff community
How do we transform thousands of satisfied customers into a low-cost acquisition channel? And what benefit is there to doing this through a member-get-member (MGM) community model, rather than by other techniques? In this case study, we examine this using the disruptive telecom brand giffgaff as an example and look at how the members of that brand became the main source of sales.
In late 2009, Telefonica launched giffgaff as an MVNO (mobile virtual network operator) with the intention of creating a lean low-price brand aimed at the millennial market. To achieve this goal, the start-up team made a radical choice to use an innovative community-based model. In the start-up team was Robbie Hearn – Head of Customer Experience and future founder of Standing on Giants – and brought in to create the community as its chief was Vincent Boon – also a future founder of Standing on Giants. Together with other members of the start-up team, they took the decision to work with the community to develop a member-get-member programme.
I’ve got loads of new members on board. I share my personal order page on social media, then welcome them all to the community.
I’ve sent email invites directly to my friends and family.Really easy. Now they’re giffgaff members too.
The low-cost business model meant that limited resources were available for customer acquisition. Therefore, to expand the customer base, the community had to play a role both in marketing and more directly in sales. Even in the early stages of the brand, we were able to get feedback from the members of the community showing that they were happy with the service and enthusiastic about the brand. Harnessing this positivity and rewarding members for spreading the word would be the key to introducing successful member-get-member activity. And with a community in place, we knew the implementation process would need to be consultative, interactive and able to evolve over time to become more effective.
Over time we developed three ways for MGM to take place: a personalised link that friends could order directly from (35% of acquisitions), SIM packs that could be ordered and sent directly to members to be handed to friends (46%) and a cheeky extra SIM that was automatically sent out two weeks after joining to be given to a friend (19%).
The personalised link proved particularly popular with community members as it could be easily added to community signatures, emails and social media posts. To increase engagement and to help members recruit new members among friends, giffgaff allowed members to customise their personal ordering page using brand assets supplied by giffgaff.
The rewards system was shaped by member behaviour and community suggestions. We offered cash for the member and a £5 credit for each new member they introduced. This was given if a new member was introduced within 42 days and the new member topped up by at least £10. The money that members earned through recruiting or participating in the community was paid out (or could be donated to charity) twice a year.
We also quickly realised that a higher volume of recruiters could be retained with better incentives, so if someone recruited more than 15 members they became a super recruiter and could enjoy enhanced rewards on a sliding scale by volume, with rewards given for members who stayed and continued to top-up. Additionally, the money was paid out monthly rather than twice a year.
Up to half of all new acquisition was through MGM
THE TOP SUPER RECRUITER
In Just Six Months!
Up to 50% of new customer acquisition took place through the member-get-member programme. As an acquisition channel, MGM was cheaper and less resource-intensive than other channels. Members who recruited others and received payback rewards from the process rated the brand higher than average. New members who entered the customer base through the programme had a lower churn than average members and were significantly more likely to recruit further and even multiple members themselves.
For some, giffgaff became a major source of income, with the top super recruiter earning £13k in just six months. The community encouraged members to promote giffgaff with new ideas proposed, resulting in giffgaff recruiters making branded T-shirts, printing their own leaflets and visiting shops to distribute SIM packs – all at no additional cost to giffgaff, we simply paid the MGM rewards. Although relatively few in numbers, the super-recruiters were responsible for 30% of all activations.
The MGM programme was open to non-community members too, but we found that community members were 248% more likely to take part in the programme and were also more likely to introduce multiple new members. Super-recruiters were often highly engaged users in the community and helped guide further developments of the programme. Interestingly, they were often also active bloggers and many of them created guides to giffgaff promotion, sharing their tips on creating increasing sales both inside and outside the community.
Doubles a Members
Likelihood to Activate a Friend
COULD THIS WORK FOR ME?
To learn more about this case study or learn if a brand owned community could benefit your sales have a chat with Standing on Giants