Russ Shaw

IT and loyalty: A marketing view

Russ Shaw, marketing director of O2, gives a marketing expert’s view of the role of IT in generating loyalty

Written by Russ Shaw

For the past few years the mobile industry has focused on acquiring as many customers as possible, and churn has risen. But if customers are not bonding with the business, then the business is missing a huge trick. If big-spending customers leave, shareholders will question why. The mobile industry needs to shift in its thinking and take a long look at the economics of business and customer satisfaction.

Our concern was that once customers were in, the whole approach to loyalty was still not in place. Earlier this year we had to over-compensate on loyalty to make sure the initiatives and programmes were under way. All of them are incredibly reliant on IT.

We had the first pre-pay reward scheme in the marketplace, where customers get 10 per cent of their top-up expenditure back every three months. IT plays a big role. The system’s capability must be there to keep track of the top-up total for each customer so money can be re-credited.

In October, we launched O2 Treats where customers of six months or longer who spend more than £10 a month are rewarded with a series of treats, such as free phone calls.

A sophisticated system aligns the treats with the value that customers have delivered.

We had to ensure we did not blow out our call centre capabilities. We have millions of customers and did not want them all to speak to a live agent, so we used automated voice recording to streamline take-up.

Loyalty schemes are always a joint process with IT. I have one IT person who is fully dedicated to the marketing programme. I talk to him almost every day. We collaborate across the business. Marketing drives the proposition but IT is around the table. They are the experts who let us know what capabilities we have. We also bring in the customer-care people and work is an iterative process.

Keeping loyalty schemes simple, easy and clear for customers is imperative, otherwise they will be put off. Whether customers contact us by text, phone or internet, IT must help clear the clutter.

There are many ways of engendering loyalty. The moment the customer comes in they must be welcomed. You need to get the relationship right and create a structured programme. If you only try to create loyalty when the customer is thinking of leaving it is artificial.

Loyalty can be destroyed when IT does not perform; if the technology behind the platform is not working properly, if the wrong type of text message is sent to a customer, if they receive incorrect information or if lots of people call into a loyalty scheme and they can’t get through.

We are opening a fourth call centre in Glasgow to put more people on the front line. New systems can help improve call flow. We will trial intelligence around the on-screen profiling of customers next year, with prompts for staff to suggest plan improvements.

Measuring loyalty needs more technology behind it than measuring acquisition of customers. Loyalty is long-term; you must watch behaviour over a long period and set up control groups of customers who are not part of a scheme to help gauge loyalty.

IT can help marketing improve loyalty by interpreting customer behaviour. In the past, technology has led customer behaviour by creating fabulous systems that you then have to find a market for. IT needs to get closer to marketing and go to the customer touch-points. For us, that means going to the call centres and sitting in shops to see how customers engage with their phones.

Russ Shaw, marketing director of O2, was talking to Lisa Kelly

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