Gamifying the customer journey: How advanced loyalty programs drive efficient retention strategies

In a recent interview with The Fast Mode, Ergün Mercan, Account Director at Etiya explores the role of loyalty programs in driving an efficient retention strategy, and how Etiya’s cutting-edge loyalty management solution enables operators to stand out from competition, prevent churn and deliver superior customer experiences. Etiya is a leading global software provider, specializing in customer experience-based, AI-driven technologies for end-to-end digital transformation. Founded 20 years ago, the company currently boasts a team of over 1600 employees as well as offices in 7 countries across the globe.

Tara: Given the increasingly competitive telco market and constantly changing subscriber appetites, how important are customer retention strategies in driving subscriber growth and profitability?

Ergün: Retention strategies are becoming increasingly important, largely due to the cost and effort that is involved in earning subscribers. Recouping subscriber acquisition costs often takes months, which is why losing customers midway greatly affects operator profitability. Retention strategies are also key in maximizing customer lifetime value (CLV) as it enables operators to generate revenues over longer tenures. These strategies moreover, enable operators to forge long-term relationships, which open up further engagement opportunities.

One of the contributing factors to the telco industry’s poor CX rating is operators’ failure to foster long-term customer relationships. In many instances, operators introduce attractive deals for new customers, while existing ones are bound by contracts that become less relevant, and unattractive over time. A good loyalty program addresses this gap, ensuring fairness and transparency while enabling operators to create brand differentiation. It also spurs subscriber acquisition, as word gets around on how existing subscribers are valued and taken care of.

Tara: Efficient retention strategies require minimization of churn via highly-targeted programs that maximize take-up and engagement. How do telco loyalty schemes support such strategies?

Ergün: In any competitive market, continuous engagement with customers plays a vital role. While pricing strategies can drive new subscriptions, the real challenge lies in nurturing customer relationships post sign-up. It is here that a strong loyalty program comes into play, by enabling personalized perks that go beyond the occasional discount or voucher. It allows operators to create an ‘experience’ rather than being just a service provider and promotes a stronger brand affinity while shifting the perception that existing customers are neglected. With a good loyalty program in place, operators can proactively reduce churn, and leave costly churn management as a last resort.

Tara: To meet the needs of different subscribers, loyalty schemes must be highly flexible and contextual. As a leader in the CRM space, how does Etiya’s loyalty management solution meet these requirements, while enhancing the customer journey and experience?

Ergün: Building on flexibility, Etiya offers tier-based, point-based or hybrid reward systems that allow operators to customize their loyalty programs to meet the needs of different customer segments. For example, subscribers with a long-term orientation may prefer tiered systems with accumulated rewards, while those preferring immediate gratification may opt for an action-based system. Apart from recurring rewards, we also enable one-time perks and status-based rewards based on the achievement of specific milestones. Our solution also includes support for social accounts, referrals and the ability to earn points from day one.

Using a catalog-based system, we allow the integration of discounts and vouchers from popular merchants such as hotels, clothing stores and coffee shops, extending subscriber experiences to everyday life. Via AI-based hyper-personalization, we also enable operators to tailor behavior-based rewards, for example, special badges for frequent travelers. Operators can execute all these seamlessly via an easy-to-use platform that features an intuitive interface and simplified configurations.

Tara: Telcos are looking at disruptive innovations to stay ahead in the market. In this aspect, how does Etiya’s loyalty management solution enable telcos to differentiate themselves from others?

Ergün: One of the most exciting aspects of our solution is that it gamifies the entire customer journey. This involves not only points collection, but also other forms of action-driven, contextual rewards such as badges and milestones. For example, a traveler can attain an ‘explorer’ badge, while a subscriber who gifts their data earns a ‘hero’ badge.

Another feature that gives our clients a major edge is the ability to extend merchant tie-ups with any brand that is relevant to subscribers’ lifestyles and needs. An MVNO for example, has integrated e-bike rental services for its customers in Montreal, Canada. Similarly, via the concept of community, we enable operators to drive social experiences and forge a sense of belonging among subscribers with ample opportunities to be involved and help others.

Tara: Can you share any recent deployment success stories?

Ergün: One of our recent deployments involves the launch of a new Canadian MVNO by an existing MNO. The idea is to disrupt the market by targeting tech-savvy digital-first customers and by focusing on digital experiences. With no physical stores, service representatives or fixed contracts, the MVNO leverages fully-virtualized cloud-based servers powered by Etiya Digital BSS. This enabled the MVNO to offer advanced self-service features that give subscribers complete control, from managing plans to activating SIM cards. At the same time it allows the MVNO to reduce OpEx year over year, as AI-powered chatbots and an automated ticketing system handles most customer interactions, making the operations lean and cost-effective . It also enabled the MVNO to tap into various gamification and community capabilities and expand its digital presence. Via its partnership with Etiya, the MVNO was able to go live in just ten months, closing half a million subscribers in six months. It also drew active engagement from 70% of members on its rewards program, with 50% of these users registering a much lower likelihood to churn.

Tara: Do you have any quick tips for telcos looking to boost their loyalty programs?

Ergün: A key criteria for a successful loyalty program is to keep every customer motivated, which essentially requires a balance between effort and rewards. For users who are looking for instant gratification, this involves quick rewards such as data add-ons, while users with long-term goals will expect something more significant such as higher-tier benefits. Another key tip is to find the right vendor with sufficient expertise in designing complex configurations of reward levels and points, often using various mathematical and statistical models. Additionally, operators must be able to select merchants based on what resonates best with their customers, which in turn requires in-depth analysis of their subscribers’ preferences and behaviours. The final tip is to cater for both active and passive behaviors, with interaction-based rewards for the former, and tenure-based rewards such as balance rollovers, upgrades and discounts for the latter.

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Etiya Loyalty Management is part of Etiya’s Customer Relationship Management (CRM) solution, a highly scalable and flexible subscriber management system with AI-driven predictive analytics, real-time 360-degree customer data and omni-channel support. To learn more, visit www.etiya.com/en/products/customer-relationship-management.