Canadian telecommunications companies (telcos) have to work hard for consumers’ loyalty and to prove they deserve it long term. This is becoming increasingly more difficult as nearly 86% of both Gen Xers and Baby Boomers claim they are ready to switch service providers due to poor customer service (ICSC), and 61% of online shoppers say they love to receive surprise incentive perks and discounts as their preferred personalized experience (SAP Hybris).
It’s only fitting then that telcos use rewards programs and sign-up incentives to drive consumer loyalty. Often, these sign-up incentives come in the form of gift cards or cash-back promotions.
With the CRTC’s Wireless Code of Conduct, consumers can return cell phones or cancel provider services such as wireless, internet, or TV within a 15 day period of signing up if they are unhappy with the device or services. A reasonable time period for most, the 15 day grace period has introduced swindlers into the mix, perhaps better known as the “system gamer.”
Aptly named for their ability to take advantage or “game” the system, telco gamers take advantage of sign-up rewards and use the code of conduct to their benefit.
Hopping from provider to provider, gamers cash in on sign-up perks, claiming those elusive gift cards and cash-back promotions and then return the product or cancel services before the grace period is up; while keeping their incentives.
Where does this leave the telco? Short of rewards, unable to track or cancel them, and without a customer that once had the potential to be profitable. So how can this emerging plague on the industry be addressed?
Ultimately, gamers technically aren’t doing anything illegal. Unethical? Definitely. But it’s hard to manage a problem that isn’t classified as illegal. And so workarounds need to be created.
With sign-up rewards and incentives driving a large portion of consumer loyalty, it isn’t as simple as cancelling all rewards programs. Instead, the mindset has to shift to get ahead of the gamers and still be compliant with the CRTC’s Wireless Code of Conduct. This is where many telcos have turned to Prepaid Programs.
Prepaid offers telcos the ability to manage and track the disbursement process. Whether online, in-store, or door-to-door, sales reps can instantly issue prepaid cards as a sign-up reward for devices and/or services.
The difference with cash-back or gift card rewards is that, while prepaid cards are pre-funded, cards can be configured to activate only after a specific number of days. Telcos can issue a card on the 12th of the month and it won’t activate until 16 days later on the 28th. This helps telcos weed out the gamers who look to return or cancel products and services but keep the rewards.
In addition, with full visibility into the parameters of a telco’s payments program, funds can be unloaded from cards whose users return or cancel products and services. This ensures that telcos don’t lose out on those funds simply because the card was disbursed.
Funds can then be redistributed or allocated back into escrow accounts, allowing every dollar spent on rewards programs to be used by those who chose to continue with the telco’s products and services; not just those who game the system.
In addition, with insights and program dashboards, Prepaid Programs provide the ability to restrict MCC (Merchant Category Codes) and vendor codes feeding the prepaid rewards back into their stores and driving foot traffic. With this approach, the score is quickly changes to:
Telco & Prepaid: 1 | Gamers: 0.