High levels of mobile penetration in mature mobile markets have led to reduced rates of growth in terms of subscriber numbers for market participants. This coupled with the rise of customer power and consumer value-seeking trends, means that MNOs are under pressure to secure their existing subscriber bases.
To this end, operators have made customer experience (CEX) improvement a core focus for digital transformation, to ensure that customers have fewer reasons to leave the MNO. However, they should also consider what can be done to encourage desirable behaviours from these customers going forward (e.g. increased tenure, advocacy, basket size).
This report examines the use of digital approaches within loyalty programmes designed to influence these kinds of behaviours. It looks at digital components within successful loyalty schemes and determines potential learnings for operators considering, or re-evaluating, their own loyalty initiatives.
Companies: Amazon, Recreational Equipment Inc, Starbucks, Three, Verizon, Reliance Jio, Sky, Pets at Home, giffgaff, Sephora, O2, Waitrose, Nike, Virgin Media,
Countries: USA, UK, India
Keywords: loyalty, personalisation, pain points, Verizon Up, customer relationship management, digital, CRM, Starbucks Rewards, key performance indicators, Prime, loyalty programme, threshold factors, Wuntu, rewards, customer lifetime value, Priority Moments, customer first, customer engagement, blockchain, Amazon Prime, emotional loyalty, customer service, benefits, customer experience, total cost of transaction, churn, Jio Prime, ecosystem, relevance, digitization,
1 |
Overview |
1 |
2 |
Introduction |
2 |
2.1 |
Background to the Report |
2 |
2.2 |
Report Content |
3 |
2.3 |
Currency and Conversions |
3 |
2.4 |
Further Questions and Feedback |
3 |
3 |
Steps to Loyalty |
5 |
3.1 |
Introduction |
5 |
3.2 |
Customer First Strategy |
5 |
3.3 |
Customer Experience |
5 |
3.4 |
Increased Customer Engagement |
6 |
4 |
Considerations for Loyalty Initiatives |
7 |
4.1 |
What Behaviours to Reward |
7 |
4.2 |
Emotional Aspects of Loyalty |
8 |
4.3 |
Type and Structure of Rewards |
10 |
4.4 |
Total Cost of Loyalty Transaction |
13 |
4.4.1 |
Threshold Factors |
14 |
4.4.2 |
Monetary Cost |
14 |
4.4.3 |
Effort |
15 |
4.4.4 |
Risk |
15 |
4.5 |
Digital Mechanisms |
15 |
4.5.1 |
Introduction |
15 |
4.5.2 |
Digital Engagement |
16 |
4.5.3 |
Data-based and Personalised |
18 |
4.5.4 |
Blockchain |
19 |
4.6 |
Key Performance Indicators (KPIs) |
20 |
5 |
Case Studies of Loyalty Leaders |
21 |
5.1 |
Amazon |
21 |
5.1.1 |
Introduction |
21 |
5.1.2 |
Loyalty Initiatives Overview |
21 |
5.1.3 |
Performance |
22 |
5.1.4 |
Success Factors |
23 |
5.2 |
Recreational Equipment Inc |
24 |
5.2.1 |
Introduction |
24 |
5.2.2 |
Loyalty Initiative Overview |
25 |
5.2.3 |
Performance |
27 |
5.2.4 |
Success Factors |
27 |
5.3 |
Starbucks |
28 |
5.3.1 |
Introduction |
28 |
5.3.2 |
Loyalty Initiative Overview |
29 |
5.3.3 |
Performance |
31 |
5.3.4 |
Success Factors |
31 |
6 |
MNO Case Studies |
33 |
6.1 |
Verizon, USA |
33 |
6.1.1 |
Introduction |
33 |
6.1.2 |
Loyalty Initiative Overview |
33 |
6.1.3 |
Performance |
35 |
6.1.4 |
Success Factors |
35 |
6.2 |
Reliance Jio Infocomm, India |
36 |
6.2.1 |
Introduction |
36 |
6.2.2 |
Loyalty Initiative Overview |
36 |
6.2.3 |
Performance |
38 |
6.2.4 |
Success Factors |
38 |
6.3 |
Three, UK |
39 |
6.3.1 |
Introduction |
39 |
6.3.2 |
Loyalty Initiative Overview |
39 |
6.3.3 |
Performance |
40 |
6.3.4 |
Success Factors |
41 |
7 |
Findings and Conclusions |
43 |
8 |
Recommendations |
46 |
|
Appendix – Feedback Questions |
48 |
Increasing numbers of mobile operators are improving their customer care in the hope of increasing customers’ loyalty and thereby minimise the high levels of cost associated with high levels of customer churn. However, low levels of churn are not in themselves a guarantee of a profitable business since that also depends on the levels of ARPU and gross margin, or EBITDA. Customer lifetime value (CLV) provide a convenient single measure which takes account of all three KPIs and has the ...
Read moreAs markets become increasingly saturated, MNOs need to focus on customer retention and loyalty. These depend on an organisation’s ability to satisfy customer needs and meet expectations in all its dealings with the base (i.e. the Customer Experience - or CX). The Net Promoter Score (NPS) has become a popular metric to gauge customer loyalty. Higher scores have been shown to correlate with positive business results. It has also been adopted as a measure of CX due to the link ...
Read moreMNOs face issues arising from a disproportionate reliance on voice revenues within their income stream. Voice revenues are falling and will continue to do so, maybe even trending towards zero over time. These revenues cannot be replaced by data charges with tariff packages as currently configured by most network operators. The challenge is to transition the base to data-centric tariffs without losing the legacy revenue stream, so that the capital expenditure required for new network generations can be justified. The ...
Read moreMany operators have continued to focus on market share as a measure of success, forcing them to invest resources in expensive acquisition efforts that result in limited financial gains. Customer Value Management (CVM) practitioners adopt an alternative perspective: they view the customer base as a long term asset – one which requires investment to secure financial benefits over the course of the customer lifetime. The discipline promotes the continuous delivery of customer value to ensure retention and loyalty to maximise ...
Read moreThis case study introduces lastminute.com, an e-commerce company that encourages its customers to 'do something last minute', offering deals on flights, holidays, hotels, gifts, restaurants and entertainment. The company has worked to extend its presence beyond the fixed Internet into interactive TV and the mobile Internet. In this case study, we examine: The key differences between the e-commerce on the fixed and mobile Internet, and the implications for retailers, application providers and operators How customers perceive the effort and risk ...
Read more