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Can retail banks learn from GiffGaff's experience of brand engagement? 

How does a company reduce its cost base? O2-owned mobile virtual network operator GiffGaff has come up with a novel approach – get your customers to play a central role in delivering support services to each other.

To do this, GiffGaff has created an online platform through which customers can help their peers. In exchange, the helping customers get credits towards airtime, cash via PayPal or a charity donation.


Customers also act as the company’s sales team, receiving rewards when they sign up new joiners. GiffGaff calls this ‘Payback.’ According to the GiffGaff blog, one customer received £14,000 in Payback in December 1, 2011, and the firm paid out £700,000 in total over the course of the year. This reduction in both customer support and sales costs allows GiffGaff to charge much lower prices than the largest mobile operators.

Creating advocates

Up-ending the economics of the mobile industry is exciting stuff. But it is also instructive to see how GiffGaff has cultivated customer relationships. In its two years of operation, GiffGaff has generated what appears to be an online community which has generated more than 1 million posts, averaging over 1,000 posts a day.


GiffGaff has a strong focus on 'co-creation' with customers submitting ideas, others supporting them and GiffGaff visibly putting them on the 'Roadmap.' Notably, GiffGaff closes the loop after an idea has been implemented by referencing back to those who originally proposed and discussed it.


But would GiffGaff be as successful if it was an independent start-up? Perhaps not. The implicit guarantee of stability provided by O2 is no doubt one of the attractions for customers.

A banking counterpart?

Could a retail bank launch the equivalent of GiffGaff for Personal Financial Services? Freed of the cost challenges of the parent, and energised by a customer base that feels it is intrinsically part of the organisation, such a bank might just shake up the industry.


By Marty Carroll, Principal Advisor in the UK

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