Johannesburg — Cellphone companies show how clever innovations that meet needs connect well with their existing customer base

A WELL-KNOWN saying in marketing goes that it costs up to 10 times more to attract new customers than it does to retain existing ones.

A nother principle indicates that 20% of your customers account for 80% of your business. The obvious lesson is to see whether you can increase sales with existing customers. Often the most profitable source of new business comes from an existing customer base.

It is not surprising then that the marketing-vigorous South African cellphone industry is introducing new levels of marketing to existing clients as part of its quest to sustain its phenomenal growth over recent years.

"Value add services" has long been part of MTN, Vodacom and Cell C's marketing speak. They include call line identity, itemised billing, information lines, international roaming, conference calls, various SMS options, airtime top-up packages, handset insurance and tracking facilities.

More recently, however, initiatives have shown a purposeful focus on existing subscribers and, while service providers tag them "value add services", what they actually do, from a business perspective, is increase billing to existing, generally creditworthy customers. Initiatives like MTN's Me2U airtime transfer and Vodacom's Look4Me services are clever innovations that help to build business among existing clients.

Most recently, Vodacom's Call Sponsor service invites contract customers to sponsor the calls made by designated prepaid customers to any other three Vodacom numbers or landlines. Essentially, what this "third-force marketing" does is encourage subscribers to spend more on their contracts by paying for calls made by third parties, who might not be able to afford them.

Of course, if potential sponsors (contract customers) remain unconvinced about the offer, chances are that their dependants (the beneficiaries) might persuade them otherwise. So the three-party initiative has doublehanded potential.

Third-force marketing is an unofficial term and was coined when banks first began sending letters to gold credit card-carrying spouses, inviting them to apply for secondary cards for their partners, linked (of course) to the primary account. Call Sponsor's approach is similar.

Vodacom says that the new sponsor service "gives you the peace of mind in knowing that prepaid customers will always be connected even when they do not have airtime value available".

Indeed, many subscribers will no doubt find Call Sponsor, which costs nothing to arrange and means that calls will be charged at general service call rates, to be convenient and in our decidedly security-conscious society reassuring.

"It is also beneficial in terms of controlling airtime spend," says Brett Morris, executive creative director for Vodacom's advertising agency, FCB Johannesburg. "Where, for example, parents want to encourage children to limit calls, they do not have to continue purchasing airtime for safety's sake once monthly budgets have been used up."

Coincidently, Call Sponsor shows that cellphone advertising, too, is evolving. The television advertisement, flighted to launch the service from the beginning of May, is unlike any other to date. Featuring a teenager on his cellphone making a sponsored call and a cheesy presenter pitching in a typically retail manner, it has a palpable Verimark ring about it.

"It is easy to get caught up by technology and Call Sponsor could be confusing. We wanted to simplify the service and make sure that it is easy to understand," explains Morris.

"The television advertisement is supported by print advertising . It is upfront, straightforward and has a single purpose: to get Vodacom subscribers to take up the Call Sponsor offer." According to Vodacom, the take-up of Call Sponsor has been good.

So, if you thought that once you could access the internet via your cellphone, that would be fine, you might be surprised. Chances are you may be invited to pay for your family's time in cyberspace too.