Julius Duncan's Blog

Brands for a social age

giffgaff – showing us the future

When you invent a company on social brand principles from scratch, you end up with something like giffgaff.

For those who’ve not heard about giffgaff yet, it’s a mobile network run by its community. The idea is that members get rewarded for running parts of the business like answering customer care questions, getting new members, spreading the word about giffgaff and even developing new products.

Speaking at the packed Digital Surrey event last night, Heather Taylor, Social Media and PR Manager at giffgaff, gave some fascinating insights into the inner workings of a ‘social business’.

Heather’s insights:

  • Founder of giffgaff, Head of Brand Strategy at O2 Gav Thompson, came up with the idea to create ‘the Wikipedia of mobile’ after attending a conference on open source business models.
  • Before launching anything the team went out to the community, and asked them what they would want from a ‘mobile network run by you’. The business was then designed around the feedback.
  • Levels of engagement in the customer forums are much higher than for a traditional mobile model. Some ‘super-users’ in the forum are engaged six hours a day helping others.
  • giffgaff doesn’t focus solely on its owned forums. It views the giffgaff ‘community’ as anywhere online that interactions and comment about giffgaff take place. The company provides tools to allow community members to track these interactions in open networks e.g. its own URL shortening service, giff.ly
  • Every week the suggestions made by the community are reviewed by the CEO, CFO and exec team. The best ideas are implemented.
  • giffgaff has made its APIs available to the community, and all app development has been led, and completed, by the community.
  • After the community management team at giffgaff handled a network failure crisis in a timely and proactive way, customers turned down offers of compensation, and asked that the money be donated to charity instead.
  • giffgaff believe the model is scaleable. If giffgaff accounted for 25pct of O2’s total customer base, it would save £12.5 mln from annual  customer service costs.

That last point is the real eye-opener. Socially designed businesses can create fundamentally different models, and shift accepted thinking on financial ratios.

The proof of the pudding for giffgaff will be how loyal its customers are in the long term. In these early days the figures aren’t available. But if this business model can also create greater loyalty, leading to the mobile operator’s holy grail of lower churn, then it will be a game-changer.

Heather’s final insight was to wonder what is stopping other businesses adopting these models. She had one word, ‘legacy’.

By that she meant the legacy of existing business systems, and the behavioural legacy of how customers are used to being interacted with. As customers demand that these legacy systems and behaviours shift, we’ll see more giffgaffs, and more disruption to business models.

How would your business look if you re-invented it for social?

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4 thoughts on “giffgaff – showing us the future

  1. Julius,

    I think you are spot on. This is probaly the closest thing I have seen to a real ‘social business’. It isn’t clear how profitable the business is but Heather pointed out the very tangible cost savings that can be made by having an active community vs the customer service costs of a brand like O2.

    I also wrote a blog on the talk -with a focus on community management:
    bit.ly/fJAUvp

    Adam

  2. Thanks Julius for the ‘nod’,

    Being a young business, we’re in the fortunate position being able to test and implement a lot of new things, however this ‘social stuff’ it isn’t just for the small and nimble.

    Many business are worried about ‘joining twitter and opening a floodgate of queries’ – the reality is that people are already talking about your business on twitter/facebook etc, the challenge is listening/responding to them.

    One example of a simple quick win that we made last October, we re-launched facebook/twitter, splitting out customer support and content. We created a new twitter handle @giffgaffhelp to respond to queries and introduced a separate ‘help’ tab on our facebook fan page – a simple way to separate out help vs content which has had a real impact on creating and keeping fans/followers.

    The next question is – but how do you staff/support all these queries? Our answer was to ask our members to help, creating new “superusers” within these communities – internally it means essentially it is supported by 1 person.

    If you’re still a little sceptical – check out this recent post, you can see how engaged our members are:
    http://community.giffgaff.com/t5/Join-Considering-giffgaff/how-good-do-u-rate-GG/m-p/446483#M14606

    Claire @ giffgaff

    • Hi Claire,

      Thanks for your feedback, great to be in touch. I’m totally bought into your community, and game theory based approach to doing business. I think you’re the leaders, and others will follow 🙂 Neat approach to the Twitter and Facebook split-out, it’s important that these profiles don’t become CRM-only platforms, to the detriment of wider engagement. Look forward to staying in touch with your latest news.

      Jules

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