Mobile Network Comparison

Since last Thursday, Giffgaff have been paying out millions of pounds back to their members. It’s a process of sharing and mutual returns that they have been doing since they first launched only a few years ago. This time the total paid out was almost £2 million!

Presumably taking a bit of inspiration from employee-owed businesses such as Waitrose and John Lewis, Giffgaff aims to be “the network run by you”. While this is not true in any real legal sense, Giffgaff have always gone to significant efforts to solicit feedback from their users and the Ideas forum is replete with suggestions that will eventually come to light as implemented features.

What’s more, Giffgaff actively seek the involvement of the community in other aspects of running a mobile network. They save money by relying on users as the front-line customer support. And the forums are filled with useful members willing to help out with minor issues such a APN settings or activating a SIM card.

Giffgaff also have relied strongly on word of mouth to promote their services. Much of their new customer base comes from member-to-member referrals and it’s been a very successful model due to the potential for exponential growth. At least in the early days, they didn’t have a big advertising spend and saved a huge amount of marketing money by asking their users to sell for them.

In return for their work on the forums and in promotional activities, Giffgaff rewards helpful users with payback – money that they can choose to receive either as airtime credit, cold hard cash or as a charitable donation. Keeping in theme, Giffgaff allow its members to choose the charities each payback period and match all the contributions with their own donation.

Payback is processed every six months in June and December and, as Giffgaff has grown as a network, the amount of people helping out has grown massively as has the amount of money paid back to the community. We’ve been carefully charting Giffgaff’s paybacksince the first payments went out back in June 2010.

Back then, the total paid out was only £27,000 and it went up steadily until June the next year when they paid out £250,000 (including £6,000 to just one member called uzzyy!) After that, things really took off as Giffgaff rapidly expanded and the payback payouts exploded too quickly reaching over £1 million in June last year. The graph got even steeper as the exponential increases continued until the last payback payment in December 2012 where members received a total of £1,850,000.

That level of growth has not turned out to be sustainable and it was with a bit of a whimper that Giffgaff announced their latest figures this June. However, the total is still going up just not as fast as before.

We do suspect that there’s a bit of disappointment at Giffgaff HQ that they didn’t hit the £2 million mark this time round. And their blog post certainly was careful not to mention that the trend is slowing down.

However, it was never going to be able to maintain that level of growth and we’d certainly say that the amount paid out is nothing less than impressive! If anything it robustly puts into perspective the amount of money that major networks must be wasting on customer service and marketing which makes it clearly why they charge so much more for calls, texts and data than Giffgaff.

We put together the graph at the top of the page to chart the history of Giffgaff’s payback payments so far. What do you think will happen to the trend in the future?

If you’d like to earn a cut of £2 million, you should get involved and sign up to a Giffgaff account. You get £5 free credit to start you off and you will be able to start earning as soon as your activate your SIM card. You don’t even need to use it – just having an active SIM qualifies you to get payback payments!

What do you think about the payback scheme? Are you involved or are you thinking about joining. Will this support and marketing model continue to be successful? And most importantly, can you tell us your prediction for the total paid out next time in December?