Vodafone says no thanks to customer rewards programs

Telco is halfway through a three-year turnaround, says CMO Kim Clarke

Vodafone CMO Kim Clarke addresses the ADMA Forum.
Vodafone CMO Kim Clarke addresses the ADMA Forum.

The chief marketer of Vodafone Australia has ruled out offering a customer loyalty program in the fashion of the Telstra Thanks program.

The Thanks program provides cheap movie tickets and other rewards to Telstra customers. Speaking at the ADMA Forum today in Sydney, Vodafone CMO, Kim Clarke, said it’s unlikely Vodafone would roll out a similar program for its own customers.

“Not in the foreseeable future,” she said. “It’s not something I’m particularly keen on.”

While the global Vodafone group has considered loyalty schemes in the past, Clarke is “not a huge fan of loyalty point systems as a general point. I don’t think it actually ingratiates what I call real customer trust and real customer engagement.”

Clarke also criticised a recent marketing effort by Optus that she said appears to be targeted at the younger generation of millennials.

“They’re chasing millennials as a particular category and hipsters,” she said. “It’s very, very niche … I’m surprised that they’ve done it, I have to be honest, because I think it’s too narrow for them as a brand, but they’re executing very well in that very niche sort of space.”

Rebuilding trust in the Vodafone brand has been Clarke’s key focus in a three-year turnaround effort at the telco, she said. The CMO estimated Vodafone is halfway through the initiative.

“In terms of the turnaround itself, we’re right in the middle of it,” she said. Vodafone has lost more than one million customers to competitors Telstra and Optus since 2010. The number-three telco is still bleeding – in the six-month period ending 30 June, it lost more than 137,000 customers.

Clarke said she is tackling the problem with a three-step process of addressing the root cause, leveraging Vodafone’s strengths, and spearheading a change program across the business.

The CMO previously outlined how she is repairing the brand in an interview with CMO Australia.

The normal lifecycle of mobile contracts has prevented a sooner turnaround, said Clarke. Customers with contracts typically stay with a telco for 18 months before changing providers, she said. However, Vodafone has had some early success winning prepaid customers who don’t want to be locked into contracts, she claimed.

An early part of Vodafone’s turnaround strategy was admitting past problems and promising to do better.

“It’s not a very human thing to do to push it away and keep walking,” Clarke said.

When Vodafone was suffering frequent network problems from 2010 to 2012, “one of the things that we probably didn’t do as well as what we could have is actually acknowledge a mistake that actually happened,” she said.

Action must follow admitting mistakes, she said. “While acknowledgment is nice, and you do expect it, if you don’t actually address what you’re acknowledging and do something about it, that’s even worse.”

Adam Bender covers digital marketing and emerging technology for CMO and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. Follow him on Twitter: @WatchAdam

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