Where are those companies that use customer-driven business models? The British mobile telephone operator Giffgaff is a good example. It is said that its founder Tav Gyler got the idea at a seminar about Web 2.0 in San Francisco in 2008. Giffgaff is a virtual operator, i.e. it does not own any own network equipment but piggy-back on another operator’s network through usage contracts. This is nothing new. Many small operators work this way. What makes Giffgaff unique? Its relations with its customers or rather “members”. The business model is built around an active member community that helps the company keep low prices. Thanks to its member community, Giffgaff succeeds to maintain a much lower cost structure than its competitors. Existing members are rewarded to help Giffgaff win new members (no need for traditional marketing). The helpdesk is run by the community of customers (no need for call centre). The average response time is 93 seconds. The company has 25 employees and more than 750,000 community members.

It is refreshing to see this company that has built its business model with social media as an enabler. Learn more about Giffgaff on its web site. I think that many companies can pick ideas from Giffgaff of how to engage its customer base. It is interesting to see how social media now makes its way into the world of business. This also means that we may need to look into what we teach in business education.

Giffgaff Web Site

Giffgaff web site encouraging members to spread the word

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Hakan_Ericson_LQHåkan Ericson Managing Director Email Håkan Read Håkan's blog posts
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