Mobile sector loyalty schemes well placed in an economic downturn

Over the slow economy of the next twelve months the mobile phone sector is one of the best placed sectors to use its loyalty schemes to retain and develop customers. The latest research from GI Insight examined where loyalty programmes were most likely to deliver effective customer retention and development support in the current economic crisis.

The research study pays tribute to the work that mobile phone companies have put into their customer management strategies over the last couple of years. This finding is backed up by research earlier this year, which reported a sharp drop in mobile phone churn in the UK, again the result of successful retention activity

The research also found that the ability of loyalty programmes to influence customer retention and development in a recession clearly diminishes with age. However, marketers also need to bear in mind that the disposable income and wealth of the 45+ age bracket is considerably higher than younger age groups. Therefore, although the influence of loyalty schemes may be somewhat lower, the proportionate effect on revenues can often be startlingly higher when dealing with the older customer.

Andy Wood, managing director at GI Insight, commented: “More than a year after the financial markets crisis began, economic fallout would surely have inspired the closure of at least some loyalty schemes if they were not considered valuable and contributive to the bottom line.

“Clearly, different industries are likely to obtain more positive results from their loyalty initiatives than others,” he continued. “However, the findings of this report should not be taken lying down. Whilst it provides a snapshot of the current status quo, and reveals clear sector differences, the imaginative professional can also take this report as a wake-up call to implement a fresh initiative to rise above their industry average and achieve true competitive differentiation through their loyalty programmes in 2009.”

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