Can You Build Loyalty To Mobile Operators By Giving Prizes?
By Mike Masnick, Wed May 11 00:30:00 GMT 2005

In the highly competitive mobile gaming space, one company has shifted strategies by trying to turn its games into a loyalty program, similar to frequent flyer miles. Will subscribers play along, or are there better way to build loyalty?

The mobile gaming space has become highly competitive lately, with many believing that games on handsets are going to be big business -- even if some of those expectations may have been over sold. However, companies in the mobile gaming space are starting to experiment with different ideas to get noticed. One intriguing strategy has been put forth by mobile gaming firm Sennari, who just raised a few million dollars on the strength of its plan to change its business model away from selling games, towards turning those games into a loyalty program for mobile operators.

The way it works is that the operator would provide certain mobile games, and subscribers would collect "points" by playing those games. Those points could eventually be turned in for various prizes. In some sense, it's taking the classic "frequent flyer" loyalty program model and moving it to the mobile phone. Of course, there are some important differences. Frequent flyer programs work because they involve the main reason people use airlines: to fly. Most people have mobile phones to communicate; not to play games. So, a loyalty program involving games, might not make that much sense.

Furthermore, most mobile games are fun time-wasters, but are hardly something that holds someone's attention for very long. Most importantly, however, it hardly seems like some random trinkets are going to keep people with a specific operator if the service is no good or the prices are too high. Studies have shown, repeatedly, that loyalty programs do little to increase loyalty without good service. In other words, loyalty programs may help keep satisfied customers from looking at other providers, but if the operators don't provide good service at a good price, no loyalty program will keep those customers from churning. For operators looking to reduce churn it seems that providing better service and being more customer friendly will likely go a lot further than a gimmicky plan to give prizes for playing games.