Have much lower operating costs and better deliver value to customers by putting customers at the heart of everything they do – their mantra is ‘Run by you’ and call their members: “the Bonnie to our Clyde, the chutney to our cheese, the milk to our tea.” This crowd sourced mobile phone network provider is truly differentiated in an increasingly competitive market.
Role of the customer – a win-win
giffgaff believes their own customers submit the best product feature and development ideas most suited to their needs. Customers get the best possible product tailored to them. They are encouraged to submit their ideas no matter how big or small through the giffgaff ‘Lab.’ The way giffgaff incentivizes customers to submit their ideas is not monetary like other crowd sourced models. giffgaff instead emphasize pride and potential impact as the key benefits to submitting an idea. If your idea is successful, not only will this be a feature that you can use as part of your phone network experience, but also you can put it on your resume and you can track the number of individuals your idea has impacted (for example SIM swap has so far helped over 50,000 members). giffgaff even goes as far to suggests that submitting an idea can help you learn about what area of an organization you may be interested in and can help you pick your next job move by taking part in the Ideas Board, you can learn about how different areas of the company run – what are you interested in? Marketing? Developing? Community?
Below is the process flow of what happens after an idea is submitted and can be tracked by the creator:
Shape direction the business is going in
Customers are told to use the forums and communicate what they want the future shape of their mobile phone network to look like – based on their needs now and what they think they might need in the future.
Reduce operating costs
Involving the customer not only encourages product development to offer the best product offering and engage their customer base, it also reduces the networks operating costs. Customers themselves run the forums, inspire community involvement, and generate free advertising through WOM.
The giffgaff model does seem to be working and getting a lot of traction, particularly recently. The company has won many awards, and continues to grow its user base, and develop into new areas such as loans.
Not what it seems
giffgaff is actually powered by O2, a large UK phone network that still runs a traditional phone network model. Is this arm a test model? Is it a branch to try attract a new customer segment, and differentiate itself in such a competitive and commoditized industry? Most phone networks rely on social perks and free give aways to attract customers, as price plans and phone offerings are largely uniform across companies. Is this a new and cheaper way to attract customers? Are their customers more loyal and sticky– in particular if their idea has been implemented? More time and data is needed to answer these questions, but there is no doubt that in such a competitive environment this is an interesting and differentiated model.
Issues to consider – can giffgaff continue to grow?
In an innovative technology based industry, will a company that relies so heavily on customer feedback and input be able to keep up with major transformational technological changes, or will they continue to survive through incremental improvement through customer initiatives? I think the customer should always be at the heart of any business, but should we rely on customers to tell us what they want all the time? Sometimes the biggest impact to customers might be through the introduction of things they do not even know they want or need?