Telstra flags plans for a new customer loyalty program in 2019

ASX-listed telco says a new customer loyalty proposition is a key milestone under its T22 transformation strategy

Telstra is planning to introduce a new customer loyalty program in March 2019 as part of its wide-reaching T22 strategy.

The transformative T22 plan was unveiled in June and is based around four key pillars. These cover customer products and services simplification, removing legacy systems and processes, and further digitisation.

The priority list includes reducing product offerings from 1800 to 20, creating a standalone infrastructure business unit, InfraCo, for traditional fixed-line assets, simplifying operational structure and ways of working, including a reduction in layers of management, and a cost reduction program and portfolio management overhaul. The work will see 8000 staff and contractors cut from the business.

Two enabling investments - networks for the future and digitisation – are also underway to support the changes. In his recent full-year 2018 results presentation, Telstra CEO, Andy Penn, described T22 as about leaving the legacy behind.

“It is about delivering simpler, more flexible products and services with a great digital service experience for our customers,” he said. “It is about maximising the value of our infrastructure assets and it is about simplifying the business and reducing our cost base for the future.”

At the time of announcing T22, the telco flagged a “new approach to rewarding and recognising customers”. Now, it appears a customer loyalty program will become a key component of this new-look proposition.

In a statement this week announcing a number of enhanced product and support offerings for Australian small businesses, Telstra also indicated it was working on a loyalty program as a “key milestone” under the transformation strategy.

This “market-leading” loyalty program is due to be introduced in March 2019. Further details were not disclosed. A company spokesperson declined to comment further to CMO.

Telstra already runs the ‘Telstra Thanks’ loyalty initiative, which rewards customers with pre-sales, discounted and free tickets to popular and exclusive events. To access the full range of offers, customers login to a portal via their device or online.

Telstra has already taken some steps under T22 to improve its customer product proposition, the first of which was launching ‘peace of mind’ data across new post-paid plans to remove excess data charges. The telco also has four major product and services experience plotted for the first year, including companion plans, express checkout and a redesigned 24 x 7 app experience.

To support this, the group is moving from legacy systems including three CRM systems to one cloud-based Salesforce platform for agents in a bid to achieve end-to-end customer experience management over the coming year.

According to Penn, radically cutting product offerings and restructuring is about taking out the complications, frustrations and complexity that exist in telecommunications. At the time of launching T22, he pointed out there are $500m in charges and costs for customers being given away in terms of service revenue as a result of the product overhaul.

“If we can fundamentally change that and disrupt ourselves, we will change the experience for customers,” he stated. All customers will move to the revised product range by 30 June 2021.

Just a month after unveiling T22, Telstra parted ways with its CMO, Joe Pollard, a move considered somewhat controversial move by the marketing industry, and one reflecting a new executive structure for T22, effective 1 October. Pollard was one of four senior executives to exit Telstra alongside CFO, Warwick Bray; chief technology office and corporate strategy group leader, Stephen Elop; and group executive of Telstra Wholesale, Will Irving.

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