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Vodafone Germany 'Stars': Increasing Loyalty Among High-value Customer Segments

In this case study we analyse the loyalty program implemented by Vodafone D2 in the German market. Introduced in 2002, Vodafone 'Stars' is regarded as the one of the most successful loyalty programs to have been implemented across the group. However, it has taken time to deliver this success. Prior to 'Stars' Vodafone had introduced earlier loyalty programs. Over time, Vodafone D2 has learned much from experience gained in loyalty program development. The lessons learned have shaped the current program design and provide valuable insights to others across the wider Vodafone Group looking to address the challenge of introducing their own loyalty programs.

Vodafone Stars is acknowledged as the leading customer loyalty program in the German market. By the standards of loyalty programs generally, it has achieved high penetration across the Vodafone D2 customer base. It has also contributed significantly to Vodafone D2 achieving a churn rate among the Stars membership which is well below the German market average. Additionally it has provided an excellent platform for customer development initiatives. In this case study we detail the success achieved by the program and analyse the factors that have contributed to its success. In particular we:

• Present a detailed description of the program structure, including the customer loyalty value segmentation scheme applied
• Reveal the monetary, emotional and service customer benefits delivered by the scheme
• Present evidence of the program's success both in terms of program reach and churn reduction across the segments addressed
• Highlight additional customer development opportunities delivered by the program
• Detail unique and unusual elements of the program that have contributed to its success, limiting the scope for competing operators to respond with a similar capability.
• Discuss additional opportunities for Vodafone to strengthen the impact of its Vodafone Stars program, drawing from experiences in other markets.
• Highlight additional market specific factors that have contributed to below average churn rates in the German market.

Price: EUR 2,500.00 / GBP 2,400.00

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1
Overview
1
2
Loyalty Program Structure
2
2.1
Background
2
2.2
Customer Segments Addressed
2
2.2.1
Program Member Status Levels
2
2.3
Points generation
3
2.3.1
Vodafone Service Points
3
2.3.2
Online Services & Online Questionnaires
3
2.3.3
Customer Referrals
3
2.3.4
Partner Scheme Loyalty points
3
2.3.5
Credit Card
4
2.4
Bonus Points Expiration
4
2.5
Program Promotion
4
3
Customer Benefits & Rewards
4
3.1
Financial Benefits
4
3.1.1
Handset Discounts
4
3.1.2
Bonus Point Rewards
5
3.2
Emotional Benefits
8
3.2.1
Exclusive Events and Shows
8
3.2.2
Access to Lufthansa Lounges
8
3.2.3
Gifts
9
3.2.4
Access to new services
9
3.2.5
Competitions
9
3.3
Service Benefits
9
3.3.1
Hotline
9
3.3.2
Mobile Phone Repair Service
9
3.3.3
Special Service Counters
9
4
Program Benefits for Vodafone D2
9
5
Program Success Indicators
10
5.1
Churn Reduction
10
5.2
Increased Revenues
11
5.3
Service Penetration
11
5.4
Customer Satisfaction
11
5.5
Customer Knowledge
12
5.6
One-to-one Marketing
12
5.7
Quality Partner Portfolio
12
6
Program Improvement Options
12
7
Low German Market Churn Levels
13
8
Conclusions
14