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How giffgaff has made its entire business a social one

How giffgaff has made its entire business a social one

By Claire Weekes, senior reporter, UTalkMarketing

There is barely a brand in the land that doesn’t have a social media strategy these days – but there is one that has taken things to a whole new level and actually launched itself as a social business. Mobile virtual network operator (MVNO) giffgaff is run entirely online and by its own customers - and its business model gives a fascinating glimpse into how social media may not just be a part of a brand’s business strategy in years to come – it could be all of it. Tom Rainsford, head of brand and proposition at giffgaff will be speaking at our Digital Brand Strategy Summit in November.

The company, owned by O2 but run as a separate business, has only been in full operational mode for a year but has already received impressive acclaim. In March, giffgaff ranked number four in Headstream’s ‘Social Brand 100 Report’ – beaten only by Dell, Nike and Starbucks and leaving all of the other more established mobile brands choking on its dust trail.

So how is this small fish swimming so strongly in the social-media abyss, while so many other brands are still in a flap about how best to utilise the medium?

giffgaff (the name is an old Scottish slang term that refers to the  process of mutual giving) works like this – its customers are also its workforce. It’s a pay-as-you-go MVNO which means that its network piggybacks off O2s – in other words customers with a giffgaff sim card still connect to the O2 network. But – and this is the clever bit – because the business is purely an online one, and because its army of workers are its own paying customers, low overheads can be passed on as discounted deals – plus giffgaff customers who encourage friends to sign up can earn payback points to turn into cash or credit. Customers can also earn payback points by offering tech support to others within its community.

“giffgaff’s model is a low-cost one, we don’t operate any call centres, unlike all the other mobile operators,” explains Rainsford. “The only way to access our products is online and our customer service model is completely different to a traditional one, in that we hand it to our customers. This reduces overall business costs and turns the money we save into rewards for our customers.” The brand has no retail distribution, and spends an absolute minimum on paid-for advertising.

Its tariff bundles are called ‘goodybags’—price bundles which are truly unlimited, and are available to buy both via giffgaff’s one website, or via Facebook where it has a 40,000 thriving community there, too.

Obviously this is a business model that can’t work without a community of customers, so the brand had to build this before launching its actual product – a complete reverse on the way that most companies approach social media. To do this, in 2009 giffgaff launched a quirky marketing campaign aimed at students “because we knew this audience are into mobile phones and are receptive to online participation,” says Rainsford. Giffgaff created a series of tools – ranging from a comedy gimp suit (yes, really) to a ‘poo-handler superheros costume’ (yes again, really) which students could hire out, dress in, and then make videos of their exploits in costume to upload onto You Tube.

Winning video artists won sim cards that gave them free calls and texts for a year.  The campaign was a well received one for a new brand – over 300,000 people flocked to view the daft You Tube clips over the six week campaign period. In order to turn this buzz into an actual community, members who signed up to join before the official launch were given the title ‘founders’ – thus cementing a deep and ongoing relationship with the brand.
It is these founders that have gone on to shape much of giffgaff’s customer service offering today.

“Our customers, known as giffgaffers, have more knowledge about mobile phones than I will ever have,” admits Rainsford. “Their knowledge is intimidating! As a result it is never a problem for us to be able to deliver on customer service.  When someone posts a query on one of our forums it’s answered, on average, in 90 seconds. I challenge anyone to ring a customer services department from any other network and get an answer as quickly as that.”

It’s not just technical support that giffgaff’s customers are willingly offering  up for better deals either – its ideas board on its website has had more than 3000 ideas posted on it since launch, and more than 200 of them have been implemented. “We’re having conversations with our customers, openly, that in most companies would only happen behind closed doors,” says Rainsford.

“One idea we looked at was the suggestion by our customers that we should offer a £20 price package. They went away and researched the market for us. In a focus group you’d just get people saying ‘give me free stuff’ – but we had conversations with our customers about profitability and margins – they’ve really bought into the brand.
“We’ve have customers that go up and down the M4 testing signal strength. One of our members has even personally connected more than 1000 people for us, which is phenomenal,” he adds. “Another earned £3300 from us in cash.”

Rainsford is keen to stress that the giffgaff model is not about ‘gifting’ customers – that it’s about paying them money for the hard work they are putting in. It doesn’t pass on hard currency to customers either – there is the passing on of knowledge too. For example a current awareness campaign is focused on quelling the common misconception that phone unlocking is illegal. Its launched its own ‘unlockapedia’ – an authoritative destination on the ins and outs of unlocking handsets.

The company’s ethos seems very clear cut, to the point and honest – its slogan is ‘The mobile network run by you’. When giffgaff created its official launch campaign in May 2010, the ad collateral featured the company’s enemy – the networks it wanted people to switch out of – and personified this as The Man.

“The Man was a kind of counter-culture term for authority in general – an antipathy against the corporate fat cats [which resonated well] in wake of the credit crunch. It was about positioning giffgaff as free thinkers and for people happy to do a bit of the work themselves in order to get a better deal,” explains Glyn Britton, strategy partner at Albion which works with gifgaff on its campaigns.

As the brand goes from strength to strength it is clear that giffgaff has hit on a truly social business model, unique in the fact that social media was never an afterthought within the marketing strategy – it was the first thought.

“A lot of [new] businesses stick social media on top – they know what products they are going to launch, what their comms strategy and above the line strategy is going to be and then think ‘oh what shall we do on Facebook or Twitter’. We integrate social into everything we do.

“And our message to customers is that if you don’t like the status quo, if you want to see a brand do things differently and you want to help be a part of that, you can”.

Attend the Digital Brand Strategy Summit where this year we will focus on social business – the hot topic amongst thought leaders around the globe.

It’s now clear that the impact of social media goes far deeper than viral videos, Twitter or even Facebook. Social techniques are changing not just the way that brands market themselves, but the way that companies do business. Attend DBSS on November 22 to learn from and network with the best. Click here for more details.


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