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Mobile subscriber reward programmes: where do they have the most impact?

30 июня 2011

“Mobile loyalty schemes can certainly impact subscribers’ intentions, although the impact must be judged in the context of each market and subscriber segment.”

Well-implemented reward programmes can increase spending among mobile subscribers in emerging markets and loyalty among those in developed markets. They are also most likely to influence the behaviour of subscribers who are most likely to churn, according to our recent research.

Operators use reward programmes to encourage subscription longevity, service and application usage, and spending, as well as to build their brands. Our primary consumer research – conducted on behalf of Buongiorno, a global enabler of mobile loyalty solutions – indicates that the attractiveness of such schemes, and their impact on user behaviour, varies significantly between countries, and between prepaid and contract subscribers.

In emerging countries such as Nigeria, attractive reward programmes are most likely to positively impact subscriber spending and usage, and have less impact on encouraging loyalty (see Figure 1). Multiple-SIM ownership might be a factor in this case. In Nigeria, 58% of subscribers have multiple SIMs, so are able to shift spend to the operator that offers the best rewards more easily than subscribers who tend to use a single service provider. Nevertheless, the results are still positive for operators that implement successful schemes, because they are broadly in line with operators’ interest in gaining a greater share of telecoms spend.

Figure 1: Mobile subscribers’ likelihood of changing behaviour because of a favoured reward scheme, Nigeria1 [Source: Buongiorno, Analysys Mason, 2011]

1 Question: “For your favourite scheme, would you spend more per month for your mobile service; would you use additional services/products; would you not cease or change your contract?”; Nigeria; n = 245.

In the developed markets we surveyed – Spain and the UK – reward programmes were found to have a greater impact on intention to churn than on spending or adoption of new services. The only exception to this trend was presented by prepaid customers in Spain, who stated that they are more likely to increase their spending in return for attractive rewards. The opportunity to reduce churn is a positive result for operators – particularly because higher-spending subscribers tend to be those with the highest propensity to change provider. However, the results suggest that operators in developed markets would be less successful in attempts to promote new services through reward programmes than their counterparts in emerging markets. It should be noted that subscribers’ actual behaviour may well differ from respondents’ stated intentions.

The mobile subscribers who are most likely to be influenced by a reward scheme are also the subscribers who are at greatest risk of churn. Respondents to our survey who stated that they would certainly change their behaviour in order to benefit from a reward scheme were more likely than average to be planning to change their subscription or provider (see Figure 2).

Figure 2: Mobile subscribers’ intentions for the coming 12 months – all respondents, and by likelihood of changing behaviour to benefit from a reward scheme1 [Source: Buongiorno, Analysys Mason, 2011]

1 Question: “To benefit from your preferred loyalty scheme, would you be willing to not cease or change your subscription?” (Response ranging from 1 = I would definitely not change my behaviour and 5 = I would definitely change my behaviour)” and “Which best describes your plans for your mobile service in the next year?”; all countries; all respondents: n = 1029; response 5 (certain to change behaviour): n = 275; response 1 (not change behaviour): n = 227.

Interestingly, respondents who stated that reward schemes would make no difference to their behaviour already display greater loyalty than the average subscriber – possibly because they are not interested in rewards schemes. Therefore, operators should be careful not to unduly reward subscribers that have no intention to churn.

The results indicate that mobile loyalty schemes can certainly impact subscribers’ intentions, although the impact (and the type of scheme that proves attractive enough to change behaviour), must be judged in the context of each individual market and within each particular subscriber segment.

Gareth Williams, Lead Consultant at Analysys Mason

 

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