Priority Moments will allow O2's 22 million customers with smartphones or Wap-enabled devices to access instant offers.
The Priority Moments app, using geo-location technology, will flag up offers nearby which consumers can redeem simply by showing sales staff the voucher on the screen of their handsets.
The offers range from a complementary Harvey Nichols canvas tote bag with every purchase of fashion or beauty and 50% off tickets from Sunday to Thursday at Odeon Cinemas.
The service, which spans 3,500 high street outlets, has the potential to save every customer £105 a month.
The scheme will be backed by a £6m ad push, spanning TV, outdoor and press, created by VCCP breaking on 26 July. The TV component will feature Zizzi, Odeon Cinemas, Harvey Nichols and WH Smith as they have signed up for a long term partnership.
In an exclusive interview, O2 marketing and consumer director Sally Cowdry explained the strategy behind the launch of Priority Moment.
Marketing: What is the thinking behind the new service?
Sally Cowdry: We have had Priority ticketing at the O2 and then the O2 Academies for many years and that’s massively successful. Customers who know about Priority ticketing have 10% more consideration points if they're our customers and actually 20% more if they're not our customers so it greatly increases our brand consideration. What we wanted to do was to take Priority ticketing to the next level.
We looked at the success of that programme but also what was going on in Britain at the time, the fact that actually it’s quite miserable and everybody has got less money. So we wanted to have everyday moments that put a smile on our customers’ face and also help them practically save money. And so Priority Moments was born.
Marketing: Who is paying for the offers, is it the brands?
Sally Cowdry: The commercial relationships between us and brands are obviously commercially sensitive and confidential. But the way it works with the exclusive offers in principle is that the brands offer the exclusive experiences and offers to our customers and we market it to 22 million customers.
Marketing: And what's in it for the brands?
Sally Cowdry: I think it's a really good three-way business model, this product. Obviously from O2 point of view, we are looking at brand engagement, customer loyalty and a deeper relationship with our customers. From the brand's point of view we will be driving footfall at a time when the high street is under pressure, enabling brands also to test and learn based on geography if they wish, time of day, even to an individual store outlet, so it gives great test and learn opportunities for the brands we are working with and obviously for the customer it helps them save money on brands that they love but also offers little experiences and moments to bring a smile to their face.
Marketing: So there's definitely no need to print off any vouchers?
Sally Cowdry: No. The other USP is that it's absolutely super easy to get, all you do is you download the app, you put your telephone number in, you get a Pin back, you put the Pin in and then you’re in, and you only have to do that once.
Marketing: Is this aimed at existing customers to stop the churn, or is it about acquisition?
Sally Cowdry: We have the lowest churn in the industry. The primary reason for doing this is to continue to treat our customers as our priority, so it’s to deepen the relationship, to deepen the engagement and to increase the number of customers who are truly fans of O2. I think it will have a knock on effect with people wanting to join.
Marketing: Does this take you away from day to day priorities, an offer like this, such as network coverage?
Sally Cowdry: No, the first thing to get right if you are focusing on customers is to get a good, consistent, functional service, so the right value for money, a great network for calls, text and data usage and great customer service. These are the fundamentals. This is a service that adds depth to the relationship but it doesn’t replace the importance of any of those items or areas.
Marketing: Do you see this as a rival to existing location-based services like FourSquare?
Sally Cowdry: I think the important thing for us is how we were going to evolve Priority, and we wanted to evolve it to the every day moments, which is why Priority Moments was born. Of course there are other companies and brands that offer parts of what we are offering here, but we think with the four unique things that we have, which is a trusted brand working with trusted brands, totally mobile and easy to use, unique offers and experiences, and long-term partnerships, that actually our offer is quite different from anyone else. We are setting our own destiny.
Marketing: Did you agonise over choosing partners?
Sally Cowdry: We wanted to choose a whole range of partners that would appeal to the many customer segments that we have. Harvey Nichols was great to get in because it really demonstrated that this isn’t like any other scheme. Harvey Nichols wouldn't associate themselves with brands that they didn’t feel had a good connection, a good synergy. Harvey Nichols is obviously more upmarket and more aspirational, and then you have the everyday Zizzi, Ask and you have National Express for students and we have Little Chef, French Connection on the high street fashion.
So yes it was really important to get a range of trusted brands that would appeal to the many different segments we have and that could offer both money-saving and also the experiences like the little O2 chocolate in Hotel Chocolat. And of course everybody loves going to the cinema, lots of people buy books.
We really wanted to have products that weren’t too niche. If you have a look at some other schemes, How many fish pedicures do you need? How many thread veins can you have removed? How many tyres can you have exchanged? We wanted to have things that people truly did want to do on a regular basis.