REINVENTING MOBILE / AN INTERVIEW WITH GIFFGAFF'S GAV THOMPSON

Contagious / The holy grail for any post-millennial business model is "nimble". Is this why O2 decided to launch what's essentially a competitor? 

GT / Our idea is that a sizeable chunk of the giffgaff business is run by its members, for its members. We call this model "people-powered". This people-powered model and the size of the team and customer base, mean that giffgaff can be more nimble and agile than its competitors.

O2 has proved it is nimble by identifying the Web 2.0 trend and creating and launching the giffgaff brand and business. O2 remains the UK's most successful mobile phone network and continues to grow faster than its competitors. As a forward thinking company, O2 embraces changing market and consumer trends and the introduction of giffgaff is wholly emblematic of this, creating a new cutting edge model which responds to the trend of increasing community participation with brands.

There is an ongoing rise in free thinkers - consumers who demand more interaction and engagement with the brands they use, preferring smaller businesses to large corporations. Our research confirms this - people want to be more involved with brands (source: giffgaff internal research) and online people recommendation is now more highly valued than brand advertising (Nielsen survey April 2009).

giffgaff is not a direct competitor to O2, it is simply operating in a different space to meet the needs of free thinkers or consumers who simply don't like big mobile phone companies. It's a people-powered phone network and the first UK mobile network with no call centres, no glossy TV ads and no evasive pricing. Where eBay, Wikipedia and Facebook have led the way, giffgaff is now trailblazing for mobile. It's the mobile service for people who want to feel more involved in the brands they use.

Contagious / Churn is a recurring problem in the mobile sector. How will you be enticing users to be loyal to giffgaff? 

GT / We believe that giffgaff members will stay loyal to us if we continue to refuse to adopt the confusing behaviours and corporate attitude of most mobile networks to their customers. The members of giffgaff can get involved in the running of the business or recruiting new members and they will then get rewarded with points that every 6 months get converted into cash. The member can take the cash themselves or a group of members can pool their cash together and donate it to a good cause or charity. This will help drive shorter term loyalty. Longer term loyalty will be driven by members believing that the brand is for people like them, that is sees the world in the same way that they do, and offers them a genuine alternative to the big mobile networks.

Contagious / Our reliance on our mobile phones knows no bounds. As giffgaff is essentially powered by the members rather than a large corporation, can you continue to supply the degree of reliability and customer service for which O2 is recognised? Are you ever tempted to use the O2 to persuade more consumers to make the switch?

GT / We rely on our members to deliver a quality membership service, which means not only low costs for our users but also a more personal and individual service. We don't have the usual big call centres and TV advertising that consumers have to endure, so the service is ultimately directly driven by what our customers input and what they want. It's up to us to incentivise them and listen to them and so continue to build this invaluable community spirit. For example, we empower our users to log on and answer each others' questions, 24/7. Eventually, we hope to put many of our business decisions in the hands of our users e.g. product and price, which saves money on external research but also ensures giffgaff members have their say in their own service. In return, we reward them with free calls and texts to each other. There is no misleading pricing or service plans or weasel terms, so the quantities of queries are also much fewer.

giffgaff is a separate business model from O2 with a clearly defined strategy and identity, and it is designed to appeal to certain mobile users who aren't really in love with the big mobile networks and their behaviours. We are an alternative for those consumers looking for more involvement, stewardship and ownership with their operator.

Contagious / To date, the marketing and businesses strategies for giffgaff have been indistinguishable (explain a bit how this works). Do you see this as a growing trend?

GT / giffgaff's business strategy has been formulated on the back of growing consumer demand for more involvement, stewardship and ownership in the organisations and brands they engage with. This demand has resulted in the launch of a number people powered business models that have thrived on the back of Web 2.0 behaviours. Businesses such as Facebook, Wikipedia and Trip Advisor all rely on the communities they serve for the content they provide to users. giffgaff aims to build on the growing demand for people powered businesses by offering a people powered alternative to the big mobile networks and, as such, the central theme to giffgaff's business strategy is building a community of giffgaff members who then have the impetus "through direct brand involvement and rewards" to help drive growth.

Contagious / Do you have any metrics on the success of the service so far?

GT / The response to giffgaff's beta trial so far has been great. People have naturally been asking a lot of questions and raising some interesting points for discussion, which have, in turn, influenced how we've approached different areas of development.

We're currently asking our members about APIs (Application Programming Interface) and allowing third-party developers to get involved with giffgaff and build applications for others to use. It's great to be able to have pre-launch dialogue with potential members before decisions are made.

Some facts and figures to shout about in the 3 months in the Beta trial: - We have attracted around 3000 active members, with 20% of them becoming involved in helping in the running of the company, rather than just taking advantage of the value offer 

- 33% of giffgaff members, when asked to rate their satisfaction of giffgaff on a scale of 1 to 10, marked us "higher than a 10". We suspect this would make us the mobile network with the highest customer satisfaction scores ever! 

- 40% of the giffgaff community have requested a SIM for their friends - We have 3,000 community members, over 5,000 followers on Facebook, many of which are actively engaged and are talking about giffgaff

- giffgaff is run by a team of fourteen, based in a rectory in a graveyard in Beaconsfield, Buckinghamshire. - giffgaff is all about its members, so here are a few more colourful member tidbits to note: 

- Ragnorak earning £123 in January because he told loads of his mates about giffgaff

- Members sharing experiences and helping each other out, rather than having to talk to call centres and then not being satisfied with the service you get anyway 

- YouTube celeb Daveyboyz pouring milk over his naked body in the name of giffgaff 

- The St Martin's student emulating a messenger pigeon for a day and taking lovely messages back and forth to people on behalf of giffgaff

Contagious / How will you be developing the marketing strategy as you move forward?

GT / The current principles of web culture i.e. the power of "collective individuality" underscores our strategy to create the mobile network operation of the future. giffgaff is an old Scottish expression for mutual giving - you give me something, I give you something back - the perfect name for our network and our ongoing philosophy. Our members will continue to directly shape the way the business develops, by influencing what the company offers and how it communicates with existing and future members. The incentive for current and future members to get involved will remain very simple - the more they do, the more they each get back. The aim is to maintain our role as the only people-powered mobile company that rewards participation (on your own terms) with benefits that you can actually use. With this philosophy as a constant, our marketing strategy will evolve in the way our customers want it to. 

Members will continue to earn cash from simply telling people how great giffgaff is and how to join, to creating marketing ideas, or answering people's questions in the customer service forums. Our ambition is that one in five members will get half of their cost of their calls back by getting involved. 

Of course there are certain central elements that we will really focus on in the future such as sustainability and charity. Already, innovation in this area is a priority of ours and we'll be revealing some exciting and surprising initiatives in the future. 

Of course from a product perspective, by being an online-only business, without the overheads of high street stores, subsidising handsets, running large call centres or TV advertising campaigns, we will continue to keep our costs and carbon foot print low. Our model will also remain simple and transparent with one low fixed price rate - you only pay for the calls you make, texts you send and time you spend on the internet. giffgaff is a SIM only network. We believe that the world has enough mobile phone handsets as it is, and that our members will be happy to use their existing handset or source their own new one. One thing we can assure you as we aim to be the mobile network for people who don't love mobile networks, our marketing will continue to be surprising, and we will strive to offer a genuine point of difference to some of the more confusing and unpleasant practices of some of our competitors.

More info on giffgaff here.