The UK-based startup has succeeded in “hiring its customers”. Business operations are run by thousands of passionate and engaged members. But such a model is not exclusive to Giffgaff and more entrepreneurs could replicate it to produce better and faster value.
When I have to give an example of a “collaborative startup”, Giffgaff is the first one which comes to my mind. So let me introduce you Giffgaff.Giffgaff is a mobile phone network based in the United Kingdom launched on November 2009. It is a business with a difference. Giffgaff is run by the community for the community.
As explained on Wikipedia:
Giffgaff differs from conventional mobile phone operators in that the customers (or called “members” at Giffgaff’s point of view to show that they are part of the company) help with the company’s operations: sales, customer service and even marketing. In return for this activity, the user receives remuneration through a system called “Payback”.
The word “giffgaff” is Scottish English meaning “mutual giving”. The slogan for Giffgaff is “the mobile network run by you” to reflect the fact that some users of the service help run various aspects of the operations.
Giffgaff’s model or “The power of co-creation”
From ideation to design, to sales, marketing and customer service, the community is in control. Crowdsourced activities keeps Giffgaff’s costs low. Then, the magic happens: Giffgaff passes the savings back to members, which become even more willing to help.
Vincent Boon, Giffgaff’s Head of community, says:
The value generated by the community is incredible, and means we can take the savings we make from not having a traditional, high cost infrastructure, and pass that directly to our customers in terms of great product value. Everyone wins!
Ideas and tests
New product ideas are tested initially in Giffgaff labs, available to all members for a short period. If they are popular, they may be incorporated into the main product. The labs’ products are also beta tested by selected community members before release. Most ideas come from the ideas board.
Production
Here are some great stories.
Shared on SocialCustomer.com:
When the new iPhone 4 came out, it used a micro SIM card, instead of the traditionally-sized SIM card. GiffGaff doesn’t make micro SIM cards; they don’t fit their business model, especially from a distribution and supply chain point of view. So, customers hacked a solution, literally. A set of enterprising individuals found that a regular SIM could be hacked into a micro SIM (using scissors!) and created organic distribution network.
Shared on CustomerServiceFoundation.com:
In July 2010, two iPhone apps and a Nokia app were released to help users manage their account and access the Community. A notable part of these announcements was that the apps were produced by members of the Giffgaff community rather than the company itself. An iPhone app was released in October 2012 to help users manage their account from their phone. This was developed by a community member who was then employed by Giffgaff to make it the official version.
Shared on Lithium.com:
By supporting the developers in its community through the purchase of SDKs and opening up data and APIs, giffgaff is able to bring applications to market far more rapidly than in a traditional model.
Well, you may say that you have already heard about startups who share their APIs. But Giffgaff is going a step further and let its members run other business functions.
Marketing and sales
Giffgaff members have been making commercials and spreading the word about the company. Members have produced and posted 146 videos online, generating more than 500,000 views to date. (Here is the tutorial in case you would like to make one :)). Members also create infographics.
But Giffgaff’s marketing is kept minimal. Instead they prefer to let their customers spread the word on their behalf. Again they use Kudos points as an incentive (customer’s get 50 points each time they e-mail a friend or 500 points for each SIM card they send to a friend that is activated). Here is my page in case you are in UK and want to order a SIM card from me!
Customer service
The Giffgaff community is perhaps best shown within customer service. All of Giffgaff’s customer service is online. They pro-actively push information out to their notice boards page (e.g. service issues). They publish customer-generated tips and tricks and FAQs. They also make extensive use of their community forum.
The average response time for any question posted in the forum (24/7) is 93 seconds and 95% of all questions are answered within an hour.
The “Kudos”, Giffgaff’s virtual currency
Perhaps the most innovative aspect of the community forum is that members are incentivised to participate through the use of a payback scheme. The payback scheme rewards the most helpful members with Kudos points which can either be redeemed for pre-pay credit, or donated to charity (and of course the community can choose which charity).
Exchange rate:
100 Kudos = £1
Giffgaff allows members to earn Kudos points in different ways:
When a member gives a SIM to another member, the original member gets 500 points after it is activated.
By contributing to the Giffgaff community on the forums, a monthly points allocation is awarded in proportion to the effort spent.
Occasional schemes allow members to earn points in return for marketing promotions.
In December 2012, Giffgaff paid out over £1.8 million to its customers.
How about you?
The idea of Giffgaff came from Gav Thompson. Inspired by internet platforms like Wikipedia who are enabling new non-institutional ways of getting things done, he imagined a mobile network that rewarded its community of customers for doing much of the work normally done by employees.
Less than four years later, Giffgaff has succeeded in “hiring its customers”. Their top ten super-users spend an average of 9.5 hours per day on the community site. The top earning Giffgaffer earned over £13,000 (more than $20,000).
How are you going to hire your customers? How are you going to turn your startup from a handful of employees to an organization of thousands of members collaborating together?
GiffGaff’s NPS score is 75, way above the industry average, approaching that of Google or Apple. When you make people participate, you grow their advocacy.
Ash Maurya says:
Entrepreneurs build systems to manufacture happy customers.
So, which system are you going to design for your startup? Traditional or community-driven?
Think about your startup as a collaboration facilitator which enable community members co-create more value for each others. As an entrepreneur, your role is to build a system to help like-minded people create together something “bigger than the sum of its parts” (Aristotle).
Welcome to the era of mass collaboration.
- This article is not a summary of other blog posts. I used Giffgaff for more one year when I lived in London. Here is my profile page if you don’t trust me :)
- Giffgaff actually succeeded in launching its community before the mobile service went live. That supports a post recently written “The 3 reasons you should start building your community from day 1”.
Related posts:
- How giffgaff reached a Net Promoter Score of 73%, using community collaboration
- 7 sections to build your community-centric business: The Collaborative Startup Canvas
- 8 ways to stay happy and connect better with your business community
- Startups: 3 Powerful Ways To Engage More Your Customers
