In last week’s Loyalty Newswire, we published an item entitled “MTS Drops Customer Bonus Loyalty Programme (RUSSIA)” along with a short description: “Russian mobile operator MTS has stopped its MTS Bonus loyalty programme. Customers can no longer register for the programme, accumulate bonus points or exchange them for goods and services.”
Our Russian loyalty correspondent, Ms. Elena Naumchik, the only Certified Loyalty Marketing Professional™ in the country, provided this commentary in response to the shut-down of the MTS Bonus program. See her response below.
“The MTS bonus program was one of the most famous on the Russian market. Its closure upset a number of subscribers who wrote about it on social networks. At the same time, the changes are rational and quite expected. A few years ago, Russian telecom operators realized that in the face of fierce competition and decreasing communication costs, financing customer rewards from their own margin is a dead end. Most of them have been transforming their loyalty programs in an attempt reduce costs and to make them more efficient.
For example, in 2016, a competitor of MTS, telecom operator Beeline, closed the program “Happy Time”, which offered discounts on communications depending on the subscriber’s term of service with the company. In February of this year, Megaphone followed suit, closing the Megafon bonus program.
Mobile operators in Russia have realized that it is much more profitable to finance rewards at the expense of partners and are actively developing multi-partner cash-back programs. This is a more promising model, since mobile operators have large customer bases and extensive opportunities for the targeting of personal offers, which arouses great interest among merchants and banks and allows customers to get more value from their mobile provider.
Of course, the shutdown of the old program by MTS and the transformation to a new value proposition is a tough move, which could hurt the loyalty of longtime customers. It could be mitigated by transforming the program without closing it or by offering current members of the program favorable conditions for the transition to a new program. I hope MTS has calculated all the possibilities and will be able to take advantage of the new model without significant losses.”
Editor’s Note: One of our mandates here at The Wise Marketer is to give voice to the global customer loyalty industry. To that end, we are building a worldwide network of loyalty practitioners who can bring perspective and context to loyalty news from their region. Ms. Naumchik, much more than a correspondent, is one of the outstanding loyalty minds in Russia. If you would like to become such a voice for your particular geography, please consider getting in touch with us to discuss the prospects, scope, and benefits of doing so.