Telstra may soon be launching a new loyalty program

The AFR recently published an article suggesting that unnamed marketing sources within Telstra had all but confirmed the planned launch of a new loyalty program called Telstra Plus. If true, this could be a great news story for their customers.

The AFR article also stated that the program focus will be to primarily reward long-time customers and those with multiple devices and services, which extends beyond the simplicity of the existing Telstra Thanks program.

For those unaware, the Telstra Thanks program launched in 2013 and is a ‘member benefits’ program which allows Telstra customers to access discounted tickets, pre-sales and selected experiences. Optus responded in 2015 with Optus Perks. There’s little differentiation between the two, although Telstra does have access to desirable sports tickets.

Member benefit programs have actually been getting greater traction in the market, primarily because consumers are tiring of homogenised points programs where little perceived value exists, but also because they are easy to set-up and operate.

As an existing long-time (10+ years) Telstra customer with two mobile plans, and being a loyalty consultant to boot, I am naturally excited to see what the program design will be.

Had I been designing the program, these are some of the elements that I’d consider for inclusion.

 

Formalise surprise and delight

If the program objective is to truly reward long-time customers, then this mechanic is a must. In a world where telcos typically give away the most value on the acquisition side in a bid to improve market share, it’s usually the loyal customers that lose out (sadly, because the telcos know they love the service and/or product and are less likely to switch).

First, determine who gets what, based on some kind of a scoring model:

  • Tenure; length of time with Telstra.
  • Service count; number of different services held.
  • Product type; what is the customer’s preferred device.
  • Usage patterns; their overall engagement with Telstra’s services and product suite.
  • Lifetime value; how much they’ve spent with Telstra to date (and how much they are expected to spend in the future).

Second, determine frequency of reward and communication touch points, so that customers have a high level of awareness that they’ve received something.

Third, determine what type of reward would best resonate with a particular cohort of customers. For example, you don’t want to be giving away additional data to someone who’s on an unlimited data plan, as that would take the gloss off the reward.

 

Deliver incremental value

Lack of value within loyalty programs is a broad customer sentiment across the industry. I’d be looking at ways for Telstra to leverage its App for customers to extract additional value via real-time discounts, or cashback type programs, which are becoming much more commonplace. One of the ways it might work is that customers would register their credit card in the App (effectively making it a payments App) and then use it to shop at bricks and mortar retailers to receive benefits.

If it was a cashback reward, I’d absolutely be looking at ways that the cashback could be converted into a statement credit for post-paid customers and a recharge credit for pre-paid, which would serve to reduce monthly spend for the customer and build higher brand affinity.

Access to this functionality could be based on any of the items within the scoring framework outlined above, or it could be available for everyone. The key point here is to deliver benefits that sit outside of the Telstra ecosystem, across everyday (and other) spend categories.

 

Points program

Of course, a simple points program remains an option and should still be considered. Whilst I do allude to customer disillusionment about this type of program above, the fact remains that if done right (and true value can be extracted), it remains a powerful design.

One thing to note here is that this type of program would resonate most with those in the higher spend brackets, otherwise they won’t be getting enough value and will likely disengage.

Points earning could be based on spend, where a percentage of spend is returned to the customer in (let’s call it Telstra Cash). This currency could then be earned on and redeemed on anything within the Telstra ecosystem, as well as earned at and redeemed at selected partners, effectively building out a Qantas-like coalition program.

I’m not suggesting that Telstra launch a direct credit card earn product however, because this play is becoming significantly less profitable, not to mention lacking in value for consumers. In fact, we’re seeing shifts away from credit card ownership in Australia to a point where debit cards are now the #1 payment type.

A good way to build immediate engagement with this type of model is what Uber Rewards recently introduced and has now rolled out across all of the US – retroactive counting of the last 6 months of activity to determine the customer tier within their program. For Telstra, a similar calculation would simply determine the amount of Telstra Cash its long-time customers would receive in a lump sum at program launch, to use as they wish.

 

Experiential

Another opportunity would be to deliver their higher-value, long-time members a more exclusive range of money can’t buy experiences. For example, these could be things such as a drive day in a high-performance Ferrari, or perhaps corporate box access to a highly sought after sports game.

This is an approach which really builds that emotional connection and one that Qantas Frequent Flyer does really well with their Gold and Platinum tiers, such as access to the best lounges, priority queues, etc.

In fact, Telstra could also apply that priority model to other parts of their business, such as customer service. For example, long-time customers can be placed in a true priority service queue when they call in, where wait times are guaranteed to be 2 minutes or less, irrespective of call volumes.

Of course, there are many other ideas that could be applied, but from my perspective as a long-time customer, any, or a mix of the above is certainly something that I’d see value in.

I eagerly await the official announcement and launch. Over to you, Telstra.

 

Max Savransky is Loyalty Director of Loyalty & Reward Co, a leading loyalty consulting firm based in Sydney. He has 10 years’ experience within the loyalty industry including roles at Mastercard Loyalty (Pinpoint), Silverneedle (Next & Sage Hotels) and Pureprofile. As Loyalty & CRM Manager at HOYTS, he launched the highly successful partnership with Qantas Frequent Flyer, including a world-first Qantas Points in-store redemption proposition. Max consults on program design, commercial modelling and lifecycle strategy, across both traditional and blockchain loyalty projects.

Max is an active cryptocurrency trader and a key contributor to www.blockchainloyalty.io, a global resource centre for everything blockchain loyalty.

Let’s connect!

LinkedIn: https://www.linkedin.com/in/maxsavransky/

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