In an empowered report by Forrester analyst, Doug Williams, giffgaff is highlighted for their vibrant community, run entirely by giffgaff customers using the Lithium community platform

1. Making Leaders Successful Every Day
February 9, 2011
Case Study: Giffgaff Uses Co-Creation
To Build A Differentiated Mobile
Service Business
by Douglas S. Williams
for Consumer Product Strategy Professionals

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For Consumer Product Strategy Professionals
Executive Summary
Just a few years ago, mobile virtual network operators (MVNOs) were a dime a dozen. Big companies
like Disney and ESPN tried — yet failed — to create a mobile experience differentiated from the main
operators in their markets. How have consumer product strategy (CPS) professionals at giffgaff, a small
offshoot of UK mobile operator O2, succeeded where other prominent companies repeatedly failed? The
early success of giffgaff hinges on its ability to deliver a radically differentiated service in an extremely
mature market. By eschewing traditional service provider business models in favor of co-created
products and services, CPS professionals at giffgaff have created a distinct product experience that is
continuously evolving via co-creation with public community members. Other CPS pros can take a page
out of giffgaff’s playbook and look for ways to leverage co-creation to launch new entrepreneurial lines
of business either within or outside of their core markets.
table of Contents
Co-Creation Is The Foundation Of The Giffgaff
Business Model
Giffgaff Built The Community First And The
Business Second
The Community Shapes Ongoing
Development Of The Product
Co-Creation Allows Giffgaff To Deliver On Its
Four Key Business Tenets
recommendations
Unleash The Startup Within Your Own
Company
Alternate View
Supplement Or Supplant Innovation Labs
With Radical Co-Creation
NOTES & RESOURCES
Forrester interviewed Robbie Hearn, head of
member experience at giffgaff, and Katy Kiem,
chief marketing officer and Dan Ziman, vice
president — marketing at Lithium Technologies.
Related Research Documents
“Market Overview: Co-Creation Vendors 2011”
January 24, 2011
“How To Turn Social Media Assets Into Social Co-
Creation Assets”
December 1, 2010
“Identify Participants And Engagements To Drive
Co-Creation Efforts”
October 5, 2010
February 9, 2011
Case Study: Giffgaff Uses Co-Creation To Build A
Differentiated Mobile Service Business
An Empowered Report
by Douglas S. Williams
with J. P. Gownder and Laura Wiramihardja
2
5
6
7

3. © 2011, Forrester Research, Inc. Reproduction ProhibitedFebruary 9, 2011
Case Study: Giffgaff Uses Co-Creation To Build A Differentiated Mobile Service Business
For Consumer Product Strategy Professionals
2
Co-Creation Is The Foundation Of The Giffgaff Business Model
Giffgaff is a wireless mobile virtual network operator (MVNO) in the UK and is a wholly owned
subsidiary of mobile operator O2.1
Consumer product strategists at giffgaff believe that customers
often perceive traditional mobile operators as coming up short with regard to cost, billing,
transparency, and customer service. To combat these shortcomings, product strategists at giffgaff
designed a radical business model based on deep customer co-creation, which they believe
promotes the core values of their company: honesty, simplicity, transparency, and mutuality.2
How radical is giffgaff’s co-created business model? Product strategists designed the service with a
simple tagline: “The mobile network run by you.” And they mean it: They’ve designed giffgaff to have:
· No call centers. All customer-service-oriented questions are posed to the community, and
giffgaff relies upon the community to provide most answers.
· No formal marketing. External marketing efforts are minimal. The community serves as the
main customer acquisition channel, as members are incentivized to sign up new members.
· Very few employees. As of December 2010, giffgaff employed just 14 people; this is a testament
to its ability to extract input and value from the co-creation community, thereby delivering
operational savings to the bottom line.
Giffgaff Built The Community First And The Business Second
Core to giffgaff’s success is the member community it has developed. Many companies recognize
the value of public and private communities for (among other things) developing new products that
satisfy unmet customer needs.3
In this situation, product strategists at giffgaff built the community
first, then co-created the service offering with the community’s help — all in a public forum.
The reason giffgaff’s radical approach to co-creation works is because giffgaff is operating as an
entrepreneurial business within a relatively mature market — and one the development team knows
is rife with consumer discontent. Product strategists developed the service by:
· Creating and developing the plan for the business. The idea for launching a wireless service
that was defined and largely run by its users came from Gav Thompson, head of brand strategy
at O2, in the summer of 2008. O2 knows the UK wireless market inside out, so product
strategy professionals had little difficulty building a feasible business plan within the MVNO
(i.e., wholesale) model. Over the next year, O2 developed and approved the business plan and
registered the company.
· Selecting a vendor to host the public community. Product strategists at giffgaff began their
vendor selection process in the second quarter of 2009; they selected Lithium Technologies
as the community platform provider in August of that year. They chose Lithium based on its

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Case Study: Giffgaff Uses Co-Creation To Build A Differentiated Mobile Service Business
For Consumer Product Strategy Professionals
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reputation in the market and its experience working with other prominent companies like
Verizon, as well as the flexibility of its technical architecture and its ability to integrate into
giffgaff’s knowledge base and eCommerce systems.
· Developing and launching the site — with community engagement at the center. Lithium
completed development of the site within eight weeks. The community launched in October
2009; upon launch, the company’s focus was not on growing the business but instead on
growing the community, both in terms of numbers as well as level of engagement. The
community began as a very “expert” group comprised largely of knowledgeable, tech-savvy men,
yet over the past six months, giffgaff has seen its membership become more ethnically diverse
and gain a greater number of women as well.
· Launching the service and letting the community go to work. The MVNO service went live
on November 25, 2009, roughly two months after the launch of the community. To achieve
operational cost savings, giffgaff did not create a call center for customer service. Instead, it
simply hosted a “Help” section on the community, where members could post and reply to
questions. This was the biggest “unknown” in the business model, but the results have been
strong, with response times averaging less than 3 minutes (and that’s 24 hours a day).4
In this
sense, the members are co-creating not just the product but also the overall product experience,
which is one of the key selling points of the giffgaff service.5
The Community Shapes Ongoing Development Of The Product
It would be an understatement to say that the giffgaff community is active (see Figure 1).
Membership currently numbers in the tens of thousands, yet about 220,000 posts have been
submitted across all of the community forums. Members have been involved in: defining the
contents and prices for “goodybags” (bundles of text, voice, and data); choosing a new voicemail
dial-in number (they selected 443, or GIF); independently developing giffgaff iPhone apps (which
have been revised based on member feedback); and creating and distributing a micro SIM template,
allowing members to physically alter a giffgaff SIM so that it works in an iPhone 4. Prominent
giffgaff community forums where co-creation takes place include:
· Contribute. Here, giffgaff asks for ideas relating to small tweaks in service or new promotions
or other ways to generate interest in the company. Posts in this forum come from both giffgaff
and members. More than 30,000 posts have been made in this part of the community.
· Submit. This is the formal ideation site, with more than 13,000 posts to date. This is where
giffgaff empowers members to share “fully fledged” ideas, as well as to vote for and comment
on other members’ ideas (see Figure 2).6
A total of 134 member ideas have been implemented
in less than a year.7
Robbie Hearn, head of member experience, considers the sheer volume of
ideas (more than 200 per month) to be the biggest surprise in terms of how giffgaff has evolved.8

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· Help. The Help forum serves as the customer service department for giffgaff. With more than
145,000 posts, this is where members ask questions and receive responses from one another,
awarding kudos to members that provide helpful answers. While not thought of as a direct
forum for ideation, customer service centers can reveal shortcomings within a business that
savvy product strategists can uncover and fix. Best Buy and Bosch Group have leveraged
customer service channels in this way.9
To validate these community-generated ideas, product strategists at giffgaff use a scorecard that
evaluates key factors such as implementation time, project cost, complexity, integration into existing
systems, commercial viability, strategic fit, and the impact of the idea on the product planning road
map already in place.10
Figure 1 Most Community Participation Lies In Helping, Contributing, And Submitting Ideas
Source: Forrester Research, Inc.58657
Source: giffgaff website

6. © 2011, Forrester Research, Inc. Reproduction Prohibited February 9, 2011
Case Study: Giffgaff Uses Co-Creation To Build A Differentiated Mobile Service Business
For Consumer Product Strategy Professionals
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Figure 2 A Distinct Ideation Site Exists Within The Giffgaff Community
Source: Forrester Research, Inc.58657
Source: giffgaff website
Co-Creation Allows Giffgaff To Deliver On Its Four Key Business Tenets
Remember those four key tenets to which product strategists at giffgaff wanted to adhere when
developing this new mobile service? It turns out that co-creation actually helps product strategists at
giffgaff deliver on those tenets in the following ways:
· Honesty. Giffgaff creates a stronger bond between customer and provider by being honest with
the community and treating members with respect. For example, giffgaff tags submitted ideas
so that the originator and the community know the status of the suggestion.11
When ideas
simply do not work or are too difficult to implement, giffgaff provides that honest feedback as
well. A further example: When explaining data rates to members in the community, giffgaff
asks for feedback but also clearly states that if a lower price is demanded at one place in the
model, another price point must rise.12
With giffgaff being honest about the tradeoffs in its

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Case Study: Giffgaff Uses Co-Creation To Build A Differentiated Mobile Service Business
For Consumer Product Strategy Professionals
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pricing structure, the community can make informed and rational decisions, rather than simply
demanding something for nothing.
· Simplicity. Giffgaff is a “bring your own phone” business, which keeps thing simple because
the only physical product it distributes is SIM cards.13
On launch, the only service plan available
was a simple pay-as-you-go model, but engagement with the community quickly revealed
preferences for bundles of voice minutes, text usage, and data. These “goodybags” were co-
created with the community and are purchased on a month-to-month basis. By keeping
things simple, product strategists at giffgaff have devised a service with easier marketing and
administration — and its members have a clear sense of what they are purchasing and the
flexibility to change services as needed.
· Transparency. The co-creation community has informed product strategists at giffgaff about
just how transparent it needs to be. The first time a network outage occurred, the community
lambasted giffgaff for taking 45 minutes to respond. The next time, giffgaff’s response was well-
received, as it took just 15 minutes and accompanied it with detailed technical information
explaining the cause. On another occasion, the community expressed its displeasure at giffgaff
for removing one of several service offers that had been co-created with the community six
months earlier.14
Product strategists at giffgaff have learned to share as much as possible with
the community, but they are also challenged to set expectations with the community around
unreasonable levels of participation.
· Mutuality. In the spirit of mutual giving, product strategists at giffgaff give members the
opportunity to co-create the mobile service that best suits them. In return, members give
product ideas, customer service support, marketing services, and sales channels to giffgaff.
Members earn points for participating in the community, providing accurate responses to
customer service questions, encouraging friends to become members via activating giffgaff SIM
cards, and generating new product ideas.15
This sense of mutuality provides members with an
incentive to participate.16
Rec o mme n dat i o n s
Unleash the StartUp Within Your OWN Company
CPS professionals tasked with innovation or new product planning should be on the lookout for
entrepreneurial startup opportunities within their own organizations. But be mindful that these
new — sometimes radical — products or services need not emerge from entirely new markets. In
building giffgaff, product strategists at O2 engaged in radical experimentation using co-creation
to develop a new line of business within their own familiar product space: the UK wireless market.
With this new investment, product strategists at O2 struck the right balance between risk and
safety — lessons from which other product strategists can learn.

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Case Study: Giffgaff Uses Co-Creation To Build A Differentiated Mobile Service Business
For Consumer Product Strategy Professionals
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· Stay within your knowledge base and comfort zone . . . O2 is in the wireless business,
so its product strategists knew a ton about the wireless market to begin with, including
the terms and conditions, rates, and policies that would apply to giffgaff as an MVNO. This
allowed product strategists designing giffgaff to leverage internal expertise to build a
business plan that made sense.
· . . . while pushing against conventional wisdom to create differentiation. Product
strategists at O2 also recognized the need to deliver a highly differentiated product
experience into the market. In this case, that meant ignoring the handset angle preferred by
many operators in favor of giving consumers what they found lacking in other operators in
the UK market. It was through co-creation via a public community that product strategists
at giffgaff were able to identify those unmet needs in the market and deliver a differentiated
product, while also holding true to the four key tenets of their business.
A l te r n ate v i ew
Supplement Or Supplant Innovation Labs With Radical Co-Creation
Some companies like Google and HP provide opportunities to employees across the organization
to build out their own ideas for new products and services through a type of internal“innovation
lab”process.17
While these efforts can be successful for large multinational organizations, internal-
driven innovation also has limitations because it focuses on what the company’s employees know
and believe. Instead, product strategy professionals at companies large and small should step
outside the boundaries of internal conventions to explore robust new opportunities. In order
to use radical co-creation engagements to involve consumers early in the process of exploring
complementary or substitute products, product strategists should:
· Have some target areas mapped out. We aren’t suggesting that you blindly hand the office
keys to consumers. Conduct an internal brainstorming session to identify some targeted
markets that could be explored, even at just a high level — such as mobility, outerwear, or
automotive accessories. No experience is necessary: This is an opportunity to move outside
your comfort zone.
· Engage a community. Outside-the-box thinkers or specialized experts can help you identify
what opportunities or unmet needs may exist in those markets.18
Co-creation vendors can
help you identify and engage with those people in markets around the world by creating
a custom-built community or leveraging a vendor-cultivated community.19
Community
members will help you find new business ideas — or provide quick feedback that the
pastures you are beginning to explore are not fertile.
· Worry about monetizing the idea later. Management will want to know what the ROI is
before you even get started. Product strategists should be ready to demonstrate how radical
co-creation can help unveil new opportunities, shorten the exploration/ideation process, and
reduce risk of failure moving forward. Once you are armed with a good idea, the business
case will fall into line.

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Endnotes
1
O2 itself is wholly owned by Telefónica.
2
If you know your Scottish Gaelic, you’ll recognize that it’s all in the name: Giffgaff is an old term that means
“mutual giving,” which is precisely how the company operates with its customers, or “members.” If you don’t
know your Scottish Gaelic, visit http://www.gaelic.com/ to bone up on it.
3
Forrester has published two case studies exploring social co-creation via private online communities. See
the December 17, 2010, “Case Study: IHG, Chase, And Consumers Co-Create A New Rewards Credit Card”
report and see the January 21, 2011, “Case Study: Philips Achieves Consumer Proximity Using Private
Online Communities” report.
4
Giffgaff recognizes that it can’t source 100% of customer service to the community, as the company has to
address issues relating to account or credit.
5
The Era of Experience is a new era of economics, where breakthrough product experiences will become
common, everyday events. Forrester prepares people to lead — rather than follow — in this era by adopting
a “total product experience approach” to product strategy, thus opening a Pandora’s box of compelling and
consistent digital experiences that extend the value of physical products into the realm of digital experience.
See the October 18, 2010, “How To Prepare For The Era Of Experience” report.
6
This site operates like other well-known ideation sites, such as Ford’s Your Ideas and Starbuck’s My
Starbucks Idea. See the September 24, 2010, “Case Study: Ford Pursues Co-Creation With An Ideation Site”
report and see the September 22, 2010, “Case Study: Starbucks Uses Social Co-Creation To Drive Green
Product Strategy” report.
7
Source: vincent, “Giffgaff ideas are overwhelming,” giffgaff community, January 25, 2011 (http://community.
giffgaff.com/t5/Blog/Giffgaff-ideas-are-overwhelming/ba-p/354413).
8
The increase in volume has caused giffgaff to alter its policy of replying individually to every member who
submits an idea in favor of replying only to those members whose ideas generate 10 “kudos” from other
members. Giffgaff publicly announced this policy change on its blog in order to maintain transparency and
welcome any feedback. Source: vincent, “Giffgaff ideas are overwhelming,” giffgaff community, January 25,
2011 (http://community.giffgaff.com/t5/Blog/Giffgaff-ideas-are-overwhelming/ba-p/354413).
9
Source: Janelle Noble, “Video Case Study: Bosch,” Brightidea, January 26, 2011 (http://blog.brightidea.com/
innovation_work/2011/01/video-case-study-bosch.html#tp) and see the June 30, 2010, “Case Study: Best
Buy’s Retailer-Led Product Strategy” report.
10
Source: vincent, “Giffgaff ideas are overwhelming,” giffgaff community, January 25, 2011 (http://community.
giffgaff.com/t5/Blog/Giffgaff-ideas-are-overwhelming/ba-p/354413).
11
Ideas are tagged into one of the following categories: Implemented, Accepted, Under Consideration, Future
Review, Need More Feedback, New Ideas, Duplicate (duplicates are marked, and a link to the original idea is
provided), or Not Suitable (giffgaff posts a response to inform the user why it decided that it was not suitable).

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Case Study: Giffgaff Uses Co-Creation To Build A Differentiated Mobile Service Business
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12
Source: “An update on data pricing,” giffgaff community, January 25, 2011 (http://community.giffgaff.com/
t5/Welcome-and-News/An-update-on-data-pricing/td-p/355085).
13
The lack of subsidized phones also eliminates the need for long-term service contracts.
14
Source: gaffer, “£30 goodybag, a closer look,” giffgaff community, November 16, 2010 (http://community.
giffgaff.com/t5/Blog/30-goodybag-a-closer-look/ba-p/157451).
15
Giffgaff also has the ability to award additional points at its discretion, which it may do for a particularly
inspiring new idea. In addition, “paybacks” occur every six months, whereby active members are rewarded
for their participation in the community and for getting new members to join. In December 2010, a total
of £128,000 was awarded back to nearly 15,000 members of the community. Source: robbie28, “Christmas
comes early for giffgaff community, with £128,000 bonus,” giffgaff community, December 17, 2010 (http://
community.giffgaff.com/t5/Blog/Christmas-comes-early-for-giffgaff-community-with-128-000-bonus/ba-
p/249535#comments); clairekav, “Spreading holiday cheer,” giffgaff community, December 3, 2010 (http://
community.giffgaff.com/t5/Blog/Spreading-holiday-cheer/ba-p/208265).
16
Not all participating members are involved just to earn billing credits for preloaded SIMs. In fact, at the
bequest of the community, giffgaff now enables members to donate their earned credits to a charity that was —
you guessed it — chosen by the community.
17
In HP’s 70-year history, it has innovated in many new and established technology fields. But how does
the firm cope with the inevitable slide — faced by most dominant global firms — into driving established
products rather than innovative ones? Whether in personal computers (PCs), printers, or other consumer
products, HP has shown a capacity for driving product innovation over a long period of time. HP has
established a strong core organization to drive rapid, near-term innovation via strong management, a series
of documented processes — and a willingness to openly talk about these. See the September 21, 2009, “Case
Study: How HP Drives World-Class Product Innovation” report.
18
In order to pursue co-creation, CPS pros need to have a firm grasp of the participants they can engage and
the types of co-creation engagements they can leverage. To that end, Forrester has constructed taxonomies
of co-creation participants and engagements. See the October 5, 2010, “Identify Participants And
Engagements To Drive Co-Creation Efforts” report.
19
Are you interested in implementing social co-creation engagements that move beyond Facebook, Twitter,
and the occasional outreach to consumers via the corporate blog? If the answer is yes, a near-endless string
of questions will soon follow, all centered on a single word: how? Here, we offer CPS pros guidance around
what social co-creation engagements require assistance from outside partners and the relative benefits of
each type of engagement. See the January 24, 2011, “Market Overview: Co-Creation Vendors 2011” report.

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