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?