One, Two, Free Ringy-Dingies: Rewards help GTE Airfone build a customer database
Lily Tomlin’s “Ernestine the Operator” once rhapsodized about the phone company’s technology outstripping technicians’ know-how. “Watch this,” she snorted, slamming her elbows across a row of terminals. “We just lost the Midwest.”
There were echoes of this in the way GTE Airfone, an in-flight telephone service, managed its database of Home & Office members. Home & Office, a rewards program begun in 1994, had 100,000 participants – most of whom rarely heard from GTE. And the company had information scattered throughout several files.
“We were never set up to do one-to-one relationship marketing,” says director of consumer marketing Greg O’Neill. “We gathered people through acquisition mailings, but we never targeted specific offers to their usage.”
Early this year GTE Airfone turned its disparate database files over to Chicago’s Townsend Agency, which aggregated the data, matched names, credit card and call information and isolated 30,000 members who had made at least one call during the past year. Twenty-seven thousand of them (with 3,000 reserved as a control group) were broken into 11 distinct categories, each assigned a goal based on calling patterns and recency, frequency and monetary analysis.
Although the initial mailing (of four planned contacts that will update members about their reward status) went out in mid-June, the program already has generated the anticipated 25% lift in calls over last year’s level. Members reaching their individual goals are rewarded with free calls.
Much of the increase was expected to come from low-end users. O’Neill estimates that between 30% and 40% of those contacted typically make one to three calls per year. O’Neill wants to encourage such members to move up to around five calls a year.
“One of the big opportunities is among people who have a tangential relationship to the product,” says O’Neill. “When you have someone making five calls you are crossing a behavior threshold.”
Keeping in Touch
The program has helped promote database enhancement as well. Thirty-six percent of Home & Office participants who responded to the campaign wish to be contacted electronically, and supplied their e-mail addresses. In a culture where, according to O’Neill, some 66% of business travelers frequently take along laptop computers, this lets GTE stay in contact with members without the hit-or-miss potential of snail mail or telephone calls.
The mailings are driving traffic to the program’s Web site (www.airfonehomeoffice.com) too, which has the additional benefit of not bogging down GTE’s customer service phone lines. Since mid-June, the site has received hits from nearly 2 percent of those solicited – and more are signing in every day.
