Mobile users don’t care for loyalty

A new study on CRM and Loyalty unveiled today by Buongiorno, a global enabler of solutions for the mobile connected life, reveals that despite UK mobile consumers being familiar with the concept of rewarding loyalty (73% of UK mobile subscribers surveyed are members of non-mobile loyalty schemes such as store points, club points, frequent flyer programmes) only 29% participate in current mobile operator reward schemes to encourage loyalty, and 27% in schemes to increase spend.

The research, presented today at Telecom World Congress in Amsterdam, examines consumer attitudes toward mobile loyalty programmes and churn. The findings show that despite almost every UK Operator offering some type of programme rewarding tenure, spend, or a combination of the two, there is a clear opportunity for operators to improve loyalty schemes and raise subscriber interest in engaging.

The study, conducted by Analysys Mason and Buongiorno on mobile consumers in both developed (UK, Spain) and emerging (Russia, Africa) markets, highlights key areas to think about for those considering implementing a mobile loyalty scheme.

Effective loyalty schemes should target the right customers — those who have the likeliest propensity to churn — identified by the research as younger subscribers and new customers, with the first 2 years being the “danger zone”. The top three reasons that subscribers plan to change providers are: wanting a new handset, believing they pay too much for calls and providers not offering additional loyalty benefits.

A key takeaway from the Buongiorno-Analysys Mason survey was that the same incentives and scheme structures will not work equally well across all markets and subscriber segments. Overall, across all four markets in the study, subscribers rank schemes that offer occasional high value gifts as most appealing (76% prepaid, 71% contract). Collecting points is a favourite method, but subscribers vary in how they wish to use these. Points for a guaranteed prize (e.g. free/ subsidised handset after 12 months) were by far the most popular type of reward overall (chosen by nearly 50% of contract subscribers across all four countries).

The research indicates reward programmes are having the desired impact on subscriber behaviour with more of an effect on reducing churn than on driving spend or adoption of new services in developed markets. However designing the loyalty programme is critical. Done right, it can generate powerful behavioural change. Done wrong, it can damage the brand for the long term.