When big brands go underground (and the lessons they learn)

I’ve been taking part in a marketing experiment. Now usually, I’m quite wary of these sorts of things. Partly, it’s because I’m just naturally wary. And partly, it’s because I don’t like being manipulated. But in this case, price trumped principle. So I gave in.

Another way

So what is this marketing experiment? Well believe it or not, I’ve changed mobile-phone operators. Now if you’re a regular reader, you’ll know that I’m a bit of a phone tart, so it won’t really come as a surprise. Over the years, I’ve jumped into bed with Virgin (don’t go there), T-Mobile and 3. And now I’ve found a new partner, who meets my needs to perfection. It revels in the bizarre name giffgaff, which is an old Scottish word meaning mutual giving, or giving and receiving. You’ll see why in a moment. It’s a SIM-only operator, and has great prices. It’s got a funky website, and an active community that’s ready to jump in with help and advice. But they’re not doing it because they’re kind, selfless and altruistic. Well maybe they are, but that’s incidental. Their real motivation is that they’re paid to help others. You answer a question in the forum, you get points. You send a SIM to a friend, more points. You do virtually anything, and you get points. And points mean one thing. Prizes. Every so often, they have a reckoning, when your points are converted into hard cash. So I recently got an email saying I’d earned the princely sum of (drum roll) 17p. Mind you, I’m not exactly what you’d call a joiner, so my participation was somewhat limited. And I’d only recently signed up, so my activity was limited even further. Still, 17 pence is 17 pence, and it’s not to be scoffed at. Neither is £200, which 40 giffgaffers earned. Or the £654 that another one managed to clock up, presumably by spending most of his time answering questions rather than making calls and sending texts. You get the idea. It’s a let’s-all-muck-in approach. You’re no longer just a number, as it were. You’re a valued member of a growing community of people who’ve realised – in the now-famous words of NatWest – that ‘there is another way’. They take an open-kimono approach to virtually everything, including pricing. They actively solicit suggestions and regularly implement them. Their tone is deliberately informal. There isn’t a hint of corporate-speak in any of the communications they send out. When I sent an email to support, the response time was a disappointing 24 hours. But I forgave them as soon as I read the first line of their message: Sorry it’s taken so long, Kevin, but we’ve been very busy here at giffgaff towers… Can’t you just see it? Wing-back chairs, ancestral portraits, a roaring log fire. Heavy oak doors that creak satisfyingly, and narrow spiral staircases that lead up to turrets. A camp Gothic-revival mansion nestled in a valley somewhere deep in the West Country. Actually, no. The reality is somewhat different. And that’s where the experiment comes in.

The SIMple truth

OK, let’s open the kimono a little further. giffgaff, you see, uses the O2 network. In fact, giffgaff is O2. Wholly owned, operated and managed by O2, but run as an apparently separate entity. So swivel chairs, not wing-back. Climate control, not log fires. And sliding glass doors, not oak ones. And you can forget the rolling hills of the West Country. We’re talking the concrete jungle of Slough (be still, my beating heart). So funky, hip, off-the-wall giffgaff is wholly owned by O2, which in turn is wholly owned by Telefónica, the Spanish telecoms giant. Seems a little less appealing, doesn’t it? Well, yes and no. The thing is, giffgaffers know all this. And guess what? They don’t care. They get unbeatable pricing, good service and those points just keep stacking up. Which means so do the prizes. And O2? What’s in it for them? Well quite a lot actually. But first, let’s look at some of the cons of their little Truman-Show-with-phones experiment:
  • They run the risk of devaluing the O2 brand.
  • They’re so successful they start cannibalising the O2 market.
  • It fails miserably (unlikely).
These are far outweighed by the pros:
  • They reach a market that O2 doesn’t appeal to.
  • They’re so successful they start winning significant chunks of business from other SIM-only operators.
  • They learn some valuable lessons that can be applied to O2’s core business.
  • Costs are minimal, and can easily be written off. There’s no advertising and they don’t do call centres.
  • If it all goes wrong, they pull the plug, hang a ‘For sale’ sign on giffgaff Towers and move on.
So everybody wins – except possibly the competition. Which is nice. And if it does all go wrong, what will I do? Well I’ll take rejection in my stride, pick myself up, brush myself off and get back in the mobile dating game again. After all, that’s what phone tarts do best. Find out more: