Crowd sourcing MVNO Giffgaff opens its doors

Giffgaff, the MVNO subsidiary of O2 UK, which fancies itself as a crowd sourcing pioneer, opened its doors on Wednesday with a rallying call to its user base.

The wacky service provider has more than a whiff of Blyk’s ill fated ad-funded MVNO model about it, particularly when it comes to relying on a self supporting user base. Giffgaff will award its members points for helping out, such as answering customer support enquiries, or submitting ideas for marketing, advertising, web content or even charging models.

And what are points worth? Pennies. Each point is worth a penny and users can convert them to cash, mobile credit or a charity donation twice a year. For example, getting someone join Giffgaff by giving them a SIM will earn 500 points or £5 for the existing member.

In order to kick start adoption of the service, Giffgaff is also calling on its community to help promote the offering. “We don’t have mega advertising budgets so we need our members to help make us famous,” the company said. “If you’re handy with a video camera and have a sense of humour why not try hiring one of our tools from our tool site and shoot a film for us.” Incentives for this marketing promotion include cash prizes of £5000.

Telecoms.com recently had a chat with Mike Fairman, CEO—or ‘Gaffer’ of Giffgaff. “If you look at acquisitions, then ‘member-get-member’ schemes have been used by a number of organisations very successfully. All we’re doing is using the internet with a bit of technology to make it work,” Fairman said. “On the customer service side we’re putting emphasis on customer forums, using them as a way of initially building up the quality of our responses. If you look at the site for Trip Adviser, or the forums for the iPhone, the quality of responses is very good.

“That leaves the marketing an innovation ideas and, in the UK, there’s a very creative vibrant community. If you’ve got a base of customers you only need a small percentage of those to be interested in contributing ideas for you to get a good volume,” he said.

Read our interview with Giffgaff ‘gaffer’ Mike Fairman

The point of these tactics is to slash operational costs for the MVNO. Customer service provision isn’t cheap, nor are marketing and customer acquisition. If its customers can shoulder these burdens, Fairman says Giffgaff should be able to reward them and still come out ahead.

Giffgaff is even going so far as the get its users to do some of the serious thinking for it. Web browsing from the handset will be free at launch, and Giffgaff will ask its members how they use the internet on the phone and how best to pay for it. “Because we’re people powered we’ll listen, and do our very best to introduce charging that’s simple to understand, fair and great value for money in 2010,” the company said.

Calls to UK mobiles and landlines will cost £0.08 per minute and texts £0.04 each. Most calls between Giffgaff phones will be free and the company has chosen 36 of the most popular destinations around the world where it will cost £0.08 per minute to call a landline and £0.16 to call a mobile.