Telecommunication companies, or telecoms, as they’re more commonly known, have a place in everyone’s life. You’d be hard-pressed to find someone who doesn’t have a mobile phone attached to them and while landlines are becoming less popular, the internet is becoming a staple in everyday living. The two most popular telecoms in Australia are Optus and Telstra. There are a lot of other telecoms in Australia but most of them operate on either the Telstra or Optus network.
When it comes to acquisition telecoms are some of the best out there. Along with utility companies, they provide great acquisition deals and use lock-in contracts to secure customers for a period of time. Where a lot of telecoms can struggle is retention. Since their acquisition deals are so appealing, it is very easy for a customer to jump from one telecom to another when their contract ends just chasing the best deal (I will admit, I am absolutely guilty of this). They don’t always provide great deals for their already existing customers to incentivise them to stay. While some telecoms, particularly the smaller ones, rely on price to maintain customers, it is becoming more common for a large telecom to use a loyalty program to engage customers.
I thought it would be a good idea to look at some different companies providing telecom services and how they are incorporating loyalty into their offerings, to take a snapshot of the Australian market:
I will also be looking at telecom loyalty programs outside Australia to get a wider global view of the telecom market and its loyalty programs.
Telstra Plus is probably the most known telecom loyalty program in Australia with its Event Cinemas movie partnership. So, what is the program and how does it work? Members earn 10 Telstra Plus Points per $1 when they make an eligible payment. They are then able to redeem their points for discounts on products and partner services via the Telstra Rewards store. Members also get access to discounted or early-access tickets for shows, movies and concerts through a range of partners.
Optus offers the Optus SubHub, previously the program was Optus Perks but as of April 26th 2022 that was discontinued. With Optus SubHub members can bundle together all of their entertainment subscriptions for easy management so that a single payment comes out each month for better tracking. As members bundle more subscriptions, they also save more money. Members get a 5% discount when they bundle two subscriptions and a 10% discount when they add three or more. Optus currently offer a special where members who link (or create) their Amazon Prime account get the next six months of their Prime subscription free.
Vodafone has taken a different approach to loyalty programs and has tried to convince customers to bring all their mobile and broadband services to one provider. Vodafone offers its Bundle & Save program which allows members to save money based on how many products/services they have with Vodafone. Eligible services include mobile phone plans > $30, tablet plans > $30 and modem plans over $20. An example of how much a member can save is pictured below.
Unsurprisingly Woolworths has entered the telecoms space. Whilst they have their own loyalty program, Everyday Rewards, it doesn’t come into play with their mobile plans. Instead, customers are able to enjoy 10% off one shop every month, 5% off Woolworths gift cards and a $10 eGift card referral program.
It is a smart move playing into necessities and offering discount shopping but I can’t help but feel this is a real lost opportunity to further tie in Everyday Rewards for customers.
America – Verizon
Verizon is one of the largest telecoms in America and they provide their Verizon Smart Rewards program for their members. The Smart Reward program lets members earn points by engaging with Verizon in a number of ways such as:
- Paying your bill online
- Opting for paperless billing
- Setting up AutoPay with your checking account
- Purchasing accessories from Verizon or online
- Upgrading your basic phone to a smartphone
- Attending an in-store workshop
Members also receive a bonus of 10,000 points when they register for the program. The points can then be spent on gift cards as well as discounts toward dining, hotels, cruises, car rentals and more. Members can even use their points to bid on items they really want. One thing I really like about this program is that customers can sign up at any time, and after becoming a member they can see how many points they have already earned. This means that customers who aren’t automatically registered, won’t miss out on any potential rewards.
India – BSNL
In 2013, Bharat Sanchar Nigam Limited (BSNL) a popular Indian telecom launched its Loyalty Reward Point Scheme. Similar to the Verizon program, members earn points for paying their bills on time. They earn one loyalty point for every Rs.50 of their invoice paid within the pay-by date. However, a difference for this program is that it is only available to members who use their landline and broadband services. Essentially, the more members use their telecom, the more points they get.
Members can then redeem one point for one free MCU to make calls. My biggest problem with this program is the BSNL explanation. As someone with limited telecom knowledge, I had to google things to fully understand what members can redeem points on as they use a lot of tech jargon and abbreviations.
Telecoms have a hard time maintaining their customers and encouraging them to stay rather than deal chase once their plan finishes. It is easy to see that all of these programs attempt to offer significant value to their customers. I think a large area of difficulty for these programs is that they require customers to sign-up separately for the program rather than offering it automatically with a plan/product. This means that customers are not engaging with this value offering as they may not even be fully aware of it.
Overall, the telecom industry appears to be branching away from the standard points earn and burn model, with examples like Optus’ SubHub and Vodafone’s Bundle & Save. However, I am really excited to see where some of these programs go in the future and what they may do to really differentiate themselves in the market.