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An Assessment of Prepay Loyalty Development Initiatives

Over the past 3 years, there has been a dramatic increase in loyalty programs and other loyalty development initiatives addressing the prepay market. This reflects operators' desire to reduce and stabilise prepay customer churn.

While loyalty programs were originally offered only to contract customers, they are now more commonly used to address prepay customer segments, and their value in addressing prepay customers is potentially greater:

• They provide a useful (often the only) means of registering and getting to know prepay customers
• A contract customer will usually notify an operator of his intention to churn in advance and this provides the operator with the opportunity to 'save' that customer cost effectively. Prepay customers often leave the network before an operator is aware of their likely departure. Consequently, loyalty programs are more critical to those responsible for managing prepay customer churn.
• Our research indicates that prepay customers are more receptive to loyalty scheme benefits, evidenced by the high registration rate for prepay loyalty programs in Italy and Portugal. However, a key success factor is ensuring that rewards are accessible (within a reasonable time frame) and relevant to club members.

In this report we highlight best practices in prepay loyalty development. We show how effective loyalty programs can be, not only for customer retention and relationship building, but also for customer acquisition (through multi service and multi partner programs), customer development (deploying disproportionate rewards to incentivise the trial of new non voice services), and reduced costs (encouraging the use of lower cost top up channels by increasing the reward currency generated with such channels).

We also examine a range of alternative and complementary loyalty development initiatives, including tenure and community/group-based tariffs, continuous promotional activities designed to keep Italian prepay customers "active" and innovative customer referral and retention initiatives from Virgin Mobile UK.

Price: EUR 1,250.00 / GBP 1,000.00

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1
Overview
1
2
Introduction
2
3
Loyalty Programs
3
3.1
Loyalty Programs Specifically Designed for the Prepay Segment
4
3.1.1
TME 'Plan Estrena'
6
3.1.2
Sunrise 'Prontomax'
7
3.2
Multi-service Loyalty Programs
9
3.3
Vodafone Group Loyalty Programs
10
3.3.1
Multi-Partner Nectar Program
12
3.3.2
Vodafone Stars
13
4
Vodafone 'One' Italy
14
4.1
Overview
14
4.2
Loyalty Program Structure
15
4.3
Customer Benefits & Rewards
17
4.4
Program Success Indicators
18
5
Loyalty Initiatives Outside Programs
20
5.1
Examples of Retention Initiatives Offered as an Alternative to Loyalty Programs
20
5.2
Virgin Mobile 'Glue'
20
5.3
Cosmote's Loyalty Tariffs Approach
22
5.4
Examples of Retention Initiatives Offered Alongside Loyalty Programs
23
5.5
Vodafone Italy 'Infinity' Promotion
23
5.6
TIM 'Last Minute' Initiative
23
5.7
Vodafone Spain Annual Top up
24
5.8
Community & Affinity Groups Initiatives
24