Resources > Articles > Loyalty Programs in Telecommunications: A Comprehensive Guide (2020)

Loyalty Programs in Telecommunications: A Comprehensive Guide (2020)

Telecommunication services are now more requested than ever, to the point that telecom companies may find themselves struggling to keep up with the surge in demand. However, the new influx of people working at home, students being homeschooled and binge-watchers on streaming platforms are more aware than ever, and may switch to another provider if unsatisfied. So the most important task is: to keep these customers! From increasing the available touchpoints, to better personalization, telecommunication loyalty programs are capable of driving any business KPIs you need. Having an all-round customer retention tool is especially important in the current situation, not only to retain long-standing customers during the crisis, but also to keep new ones that were attracted during home isolation.

What Is a Telecommunication Loyalty Program?

A telecommunication loyalty program is a customer retention tool that helps organizations keep their customers by providing hyper-relevant rewards, benefits, extra services, and, quite often, partner deals. A common threat for telecom brands is the lack of personal touch: once the deal is closed, no inherent loyalty is formed, and customers immediately start looking at other offers once their subscription is over. Telecom loyalty programs are designed to combat this behavior:

  1. Omnichannel: Such programs are generally omnichannel to match the existing holistic customer view of telecom companies. No matter where the deal is made – online or at a customer service branch – all information should be stored in one place.
  2. Fewer customer interactions: Telecommunication loyalty programs are also known for incentivizing data collection and mobile app usage, to make up for the lack of customer interaction that characterizes this industry.
  3. No personalization: Customers in telecom have a wide range of backgrounds and interests, which generally makes personalization desirable, yet difficult. To combat this problem, telecom loyalty programs should engage customers outside of the buying cycle.
  4. In-store possibilities: Telecom brands often have a physical presence too, selling smart TVs, mobile phones or other electronic accessories in a retail space. Despite face-to-face sales not being as pertinent in the current situation, companies should know how to utilize their stores to promote the loyalty program.

Telecom providers have always been focussed on providing more value to their services, and customers today are becoming more aware of the digital experience they should expect. They are upgrading to higher speed tiers, and reviewing their situation. They have the time and capabilities to explore Telco’s greater offerings. In a highly competitive market, the introduction of loyalty programs is helping to increase customer retention and acquire new customers. This is where we see loyalty programs as a good way to trigger trials for entertainment subscriptions (movies, games, etc.) and to make offers for smart home devices with partners like Google, Amazon and mesh WiFi network providers. We expect to see an increase in how loyalty programs participate during the crisis. They’ll help to grow the base and the number of first time customers for the ancillary services, like discounts on home entertainment packages, and they’ll encourage the customers to take an additional mobile subscription from the telecommunications provider. Because the more services people take, the lower the propensity to churn.

Aliaksandr Baradyntsau
European Head of Media and Telco Business at EPAM

The Biggest Customer Retention Challenges for Telecom Companies

The biggest obstacle for this industry is the lack of customer interactions. With the subscription-based services at the forefront, telecommunication companies rarely have the opportunity to get in touch with customers. When the end of the contract rolls around, this lack of contact makes customers more likely to churn, and move to the provider with the best deal. 

On a similar note, telecom companies collect a variety of customer information, but reward preferences and other personal data isn’t among that data. Combined with the lack of touchpoints, this makes personalization a daunting task. And without relevant deals and rewards, competitors can easily win over long-standing customers simply by offering lower prices. 

In short, to overcome the challenges of the industry and better retain customers, a telecommunication loyalty program should:

  • Increase touchpoints with customers, to make room for personalization
  • Create memorable rewards to shield customers from the competition
  • Use gamification to incentivize further engagement
  • Turn their native app into another touchpoint, and use it to educate members about the service
  • Promote the loyalty program in store and through partners

Since the very first days of the pandemic, telco companies have recognized the extraordinary times we are in and tried to alleviate the hassle around remote working, online education, and basically digitalizing businesses, helping them offer extra promotional, limited-time offers. Now it is more important than ever to build engagement and create value for each and every customer, reflecting on their changed circumstances. There is fierce competition among telco companies regarding who cares the most for their customers. Telco companies have many opportunities to foster loyalty, whether through a gift-based, points-based, or tiered program. Some of them could include coupons, concierge services, and other value-added services or money-can’t-buy experiences. The aim is the same; keep customers engaged and offer them privileges.

Noemi Herczeg
VP of Marketing Automation and Conversational Commerce at Mito

Best Loyalty Program Features for Telecommunication Companies

Now that the main priorities are defined, it’s time to list all the enterprise-grade loyalty program features that telecom companies can use to build a more active relationship with customers.

1. Capturing Old and New Audiences With Offers & Rewards

Connecting rewards

The best way to get people invested in a loyalty program is to have a large assortment of rewards that appeals to your customers’ passions. Go beyond the free internet package and offer something that enriches their everyday life. For example, offer a limited-time subscription to streaming platforms or tickets to cultural or sporting events sponsored by your brand (once live events are back in action, of course). It’s also a best practice to involve your partners and put their products on your virtual shelves as well, such as toys, mobile and gaming accessories, or even food and beverages.

Surprise & Delight

Use an unexpected surprise to engage customers, sending them a reward for their birthday or membership anniversary. An kind and unexpected act like this shows that you care, and is also a great opportunity to help segment your audience. The reward itself should be something you know that customers will use: Gen Z customers are more fond of receiving unlimited Internet bandwidth for their birthday, while older generations may prefer getting more minutes for calls.

The Antavo Loyalty Management Platform offers a drag-and-drop rule editing interface to effortlessly set up automation flows, including surprise & delight campaigns.

The Antavo Loyalty Management Platform offers a drag-and-drop rule editing interface to effortlessly set up automation flows, including surprise & delight campaigns.

Tiers

Telecom companies tend to restrict their reward programs to one-time coupons and discounts. However, a much higher level of engagement can be achieved with a tiered program, by making people feel rewarded for their loyalty. For instance, members can rank up based on overall spend, or based on the number of years they’ve been your customer, unlocking different benefits the higher their level is. Of course, you don’t need to fully commit yourself to just one type of program, you can always mix and match features from multiple ones to maximum efficiency.

In this video Zsuzsa Kecsmar, CMO and Co-founder of Antavo, asks Jörn Roegler, Antavo’s VP of Strategy & Insight, about the main benefits of tiered loyalty programs.

Rewards and offer management

On a more technical note, managing a huge library of rewards is almost impossible without enterprise-grade offer management. The hallmarks of such a system are user-friendliness and customization. The former allows marketers to introduce new rewards and set up the marketing material with just a few clicks, while the latter gives them the freedom to target different segments with different rewards, and generate unique coupons.

Find out more about the opportunities offer management creates in loyalty programs, in Antavo’s Prime Steel Winter Release.

Find out more about the opportunities offer management creates in loyalty programs, in Antavo’s Prime Steel Winter Release.

2. Reaching the Full Potential of Personalization

Customer profiling

Without a clear incentive, people tend to ignore optional tasks, like quizzes or surveys. But when there’s a reward on the line, they are more willing to participate. In a telecommunication loyalty program, you can ensure that the gifts or benefits you offer for profile compilation or survey participation remain cost-effective.

With incentivized customer profiling, you can learn about your customers’ lifestyle, personality, values, interests, favorite brands, the devices they like and dislike, the rewards they’d love to see in the program, and more.

With incentivized customer profiling, you can learn about your customers’ lifestyle, personality, values, interests, favorite brands, the devices they like and dislike, the rewards they’d love to see in the program, and more.

Loyalty-enhanced emails

Once you’ve collected enough information with customer profiling, it’s time to put it to good use. Hyper-personalize your email communication with loyalty-related information (e.g. remaining points, tier status, progress towards the next reward or tier). Additionally, the member preferences can also be used to give relevant product recommendations or show them rewards they would most likely be interested in.

3. Mobile Focus to Change Customer Behavior

Infotainment content

Another tried-and-tested approach to generating interest in your loyalty program (or in your app) is to host a slew of interesting and fun content. Accessing said content only requires a loyalty program membership, which helps boost enrollment rates.

Offering animated shorts for kids, handiwork tutorials for grandparents, home exercise guides for young adults is especially important during a crisis situation, like COVID-19. Being able to distract people and give them value during difficult times is what forges true brand loyalty. 

Mobile Wallet to help reward redemption

The best way to bridge the gap between online and offline interactions is to use mobile passes. The system works like this: when customers redeem a physical gift online, they receive a mobile pass, which they can download onto their phone. Then when they visit your or a partner’s store, an employee can scan their pass, and the customer can receive or use the reward immediately.

Send a surprise & delight birthday reward to customers, which they can redeem in store or at a partner’s store using the mobile app, generating footfall in the process.

Send a surprise & delight birthday reward to customers, which they can redeem in store or at a partner’s store using the mobile app, generating footfall in the process. 

6 Telco Rewards Programs Examples for Inspiration

1. Verizon UP

Verizon is an American multinational telecommunications conglomerate. The loyalty program is deeply integrated into the brand’s app, to the point that most features are only available there.

  • Discounts, extras, perks and surprises can be accessed through the app 
  • Device Dollars can be claimed (based on the customer’s current payment balance) and used toward the purchase of one smartphone, basic phone or tablet
  • Super Tickets to shows, music or sports events can be claimed every six months

Verizon’s loyalty program shows that the true power of telecommunication loyalty programs lies in a reward system that acts as a gateway to all kinds of hobbies and interests.Verizon’s loyalty program shows that the true power of telecommunication loyalty programs lies in a reward system that acts as a gateway to all kinds of hobbies and interests. 

Priority By O2

O2 UK is the second-largest telecommunications services provider in the United Kingdom, with 26 million subscribers (as of November 2019). Its loyalty program, Priority, differs from the traditional path, as uses a Perks program model:

  • There is no point earning/redemption system and the program is free
  • Event tickets, vouchers, offers and prize draws are available for all O2 customers
  • Pay As You Go customers are eligible for a special deal: every three months, they receive 5-10% back from their top-ups. The reward can be claimed as airtime credit, a movie ticket, or a mobile voucher.
O2 Priority demonstrates the power of diverse rewards.

O2 Priority demonstrates the power of diverse rewards.

The Club by HKT

HKT Limited, also known as Hong Kong Telecom, is one of the largest telecommunications companies in Hong Kong. The company’s loyalty program showcases all the iconic telecommunication loyalty program features.

  • Members earn 1 Club point for each HK$10 they spend, but there’s also a tiered system based on the overall amount of points earned
  • Club Points can be redeemed for admission to events, or for an array of limited-time products, services and perks
  • Customers can earn points and get discounts at global partner companies as well
  • The loyalty program is available on mobile devices via a third-party platform called JuicyApp

Customers can choose whether they wish to spend all their points to get a product for free, or just use part of their points as a discount.Customers can choose whether they wish to spend all their points to get a product for free, or just use part of their points as a discount.

Telstra Plus

Australian telecommunications company Telstra builds and operates telecommunications networks and markets voice, mobile, internet access, pay television and other products and services. Telstra Plus, the company’s loyalty program, is renowned for its attractive physical rewards and lax expiration rules.

  • Customers earn 10 Telstra Plus Points for every $1 spent
  • Points expire in three years
  • There are four tiers: Member, Silver, Gold, Business, each with increasingly better access to streaming services
  • Members can check their progress and point balance on the company’s app
Telstra Plus promotes product discovery through offer management: creating double or triple point campaigns for specific products increases sales of the featured product.

Telstra Plus promotes product discovery through offer management: creating double or triple point campaigns for specific products increases sales of the featured product.

h2o Rewards

Headquartered in New Jersey, h2o offers no-contract wireless service, which includes monthly and minutes plans. The company operates an earn & burn loyalty program with multiple ways to earn points.

  • Two points for every dollar spent on products/services
  • 2% back in points for every online recharge
  • 3000 points for successful referrals, up to 10 people per month
  • 500 points for activating a Monthly Unlimited and Pay As You Go plan with a credit card
h2o heavily restricts who can be a loyalty program member: the personal rewards page is only available after registering an h2o wireless phone number with an active plan.

h2o heavily restricts who can be a loyalty program member: the personal rewards page is only available after registering an h2o wireless phone number with an active plan.

6. AIS Serenade

Thailand’s largest GSM mobile phone operator with over 40 million customers, AIS, has a hybrid loyalty program, boasting both points and tiers. Highlights from their telecommunication loyalty program include:

  • One point for every 25 Thailand baht (their national currency) spent on mobile phone service fees
  • An extended reward catalog: free internet package, free calls, entertainment exchange through AIS PLAY app, snacks, a 50% discount on beverages
  • Three tiers (Emerald, Gold, Platinium) based on service length and monthly spend
  • A special VIP club inside the program, offering exclusive customer service
The most interesting feature of AIS Serenade is their sweepstakes feature. By spending points, participants get a chance to win a grand money prize.

The most interesting feature of AIS Serenade is their sweepstakes feature. By spending points, participants get a chance to win a grand money prize.

Shifting to a Higher Gear in Customer Loyalty

Depending on your vision for loyalty, choosing the right provider through your procurement department and launching a program takes care and consideration. Still, it’s a worthy endeavor, as you’ll be able to provide a better overall service to your customers. If you’re interested in learning more about loyalty programs and how they are implemented, our definitive guide is a worthwhile read.

Andy Nemes
Andy Nemes
Andy is the CSO and Co-founder of Antavo. He is a natural-born helper who takes the time to understand prospects’ unique business needs and is always ready to pick up the phone. He supports Antavo’s clients in finding a loyalty solution that best fits their business.