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Clear Inner Circle Loyalty Program

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CLEAR Loyalty pilot; developed and launched within 90 days - full scope plan from research, development, communications, to launch.

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Clear Inner Circle Loyalty Program

  1. 1. CLEAR Inner CircleCustomer Loyalty ProgramMarch 13, 2011
  2. 2. 2011 Base Marketing PrioritiesStrategy & Insight Early life(activate)Engagement/Loyalty(engage/Inform)RevenueGenerating (grow)Churn/Reactivation(retain)Build top notch CRM strategy andcompetency based on actionable insightand customer-centricityImprove customerexperience and reducecustomer pull backIncrease customer engagement andbuild loyalty for the brandIncrease share of walletby building always-onrevenue engineLower customer andaccount churn proactively &reactivelyA. Project CIM: Enrich and evolvemarketing data mart (CIM) toimprove decision-making andcustomer base targetingB. Project Contact Recovery: Improvecustomer contact deliverability byscrubbing CIM dataC. Project Digital Outbound: Identifyand secure best in classdigital/email marketing solution toimprove effectiveness and quality ofcustomer communicationsD. Project NAB: Increase usage ofNAB segmentation for strategydevelopment, customer acquisition,. And to Increase relevance andimpact of customercommunicationsE. Project RapidDetection: Reducenon-RF pull back byimprovingcustomerexperience throughrapid pull-backdetection programF. Project Onboarding:Reengineercustomeronboardingapproach topositively impactpost-activation andlower non-RF pullbackG. Project CLEAR Inner Circle:Increase customer loyalty andbrand affinity by launchingCLEAR Inner Circle loyaltyprogramH. Project Lifetime Value: Buildand implement Lifetime Value(LTV/FLTV) model to helpprioritize base efforts andretention offersI. Project MyPreferences:Increase customer engagementand personalized participationthrough preference centerJ. Project Usage: Increase loyaltythrough improved serviceusage and customer educationK. Project BaseRevenue: Buildpredictable baserevenue model bydeveloping androlling out always-on upgrade & upsellprogram thatgeneratessustained baserevenueL. ProjectPartnerships:Identify and securekey strategicrelationships toincrease revenueand loyalty with thebaseM. Project React: Developand implement effectiveand cost-efficientalways-on ReactprogramN. Project Churn Model:Roll out and monitorimpact of predictivechurn modelO. Project ChurnPrevention: Design andexecute churnpreventive activitiesbased on churn risk• Contactability• Data mart integrity/sources/users• Q1 email solution availability• Penetration of NAB segments• Pull-back ratio• Usage ofproduct/service• Unsubscribe/open ratio• Pref Center penetration ratio• NPS and CSat• Revenue target• Rev/spend ratio• Churn rate• React rate• Cost per reactKPIsBigBets(strategies)GoalsFocusConsciously ConsistentlyCreating Customer Value2
  3. 3.  CLEAR continues to experience higherthan industry standard churn across itscustomer base. Currently, we are not recognizing high-value customers for their business There are no incentives to create„stickiness‟ and encourage customers toremain loyal to the brand. Increasing customer loyalty is critical toshort and long term growth of theCLEAR brand and retail business CLEAR must move the customerrelationship from a product relationship toa brand relationship to maximize thevalue of the customer CLEAR must create ‘stickiness’ in themind of the customer by providing anincentive-based program that encouragesloyalty to the brand The loyalty program will help us determine“how” to effectively manage ourrelationship with our best customersSITUATION BUSINESS OPPORTUNITYChurn PreventionOpportunity is to increase customer engagement and ‘stickiness’by strengthening customer loyalty and sustaining the relationship
  4. 4. PurposeTo create an inclusive customer loyalty program whichdelivers enhanced value and measurable ROI, whiledriving brand loyalty through incentives, exclusivity andcustomer recognition.Clearwire Confidential
  5. 5. Desired ImpactDesired impact on customer behavior:- Increased tenure (primary)- Higher MRC (secondary)- Reduced delinquencies (secondary)Other “side” benefits:- Positive brand association- Word of mouthClearwire Confidential• “There is a valuable incentive for me to stay in this relationship”• “I feel valued and recognized for my business”• “I feel rewarded for my efforts and my commitment to the brand”• “There is a perceived cost for me to switch to the competition”
  6. 6. Key Design PointsSole focus is on the desiredchange in customerbehavior (longer tenure,higher MRC and reduced non-payments) = laser-focusedOffers carefully selectedbased on high-perceivedvalue (based on research) andlow cost = limitedbudgetProgram built, sustained andcontinuously optimized basedon ROI performance =fiscally accountable1 2 3Phased launchapproach allows adequatetime for measurement and testingof initial pilot = qualitycontrolDistributive tiermodel creates differentiationand incents based on actualcustomer value. Top tier small(<2%) to minimize program cost &avoid potential impact of falsepositive = low risk offalse positiveProgram is inclusive bydesign: top tier createsexclusivity common in loyaltyprograms yet every Clear customerparticipates so most of the impactis felt in lower tiers (where churn ishigh) = broad impact4 5 6
  7. 7. Concept Validation875 surveys on 1/31/2011 – among active and cancelled customers and basic/premium category types
  8. 8. A Program That Says “Thanks”CLEAR Inner Circle is a simple,personalized loyalty programcreated for and by our customers.We thank by bringing them intoour inner circle where rewards aresegmented into three levels, orwhat we like to refer to as circles.The closer customers move to theinnermost circle, the greater theirrewards.Clearwire Confidential
  9. 9. It‟s All About Our CustomersTo build stronger relationships with our loyal customers, we arefocusing our conversation around 3 core pillars:TenurePay bills ontimeAddingservicesMove up in tierGreaterRewardsThese pillars are key to the way we communicate how customersremain and move up within the program with the ultimate benefit ofgreater rewards.Value + Recognition + Thanks
  10. 10. Year 1 Expectations
  11. 11. LOYALTY PROGRAMELEMENTSCLEAR Inner Circle1
  12. 12. Launch PhaseOnline Communications OverviewAn email announcement and banner on the account sign-in screen will build awareness and drive customers to theCLEAR Inner Circle portal site.EmailAnnouncementMy AccountSign-in ScreenBannerCLEAR Inner CircleLoyalty ProgramPortal Site
  13. 13. EmailCustomers will beintroduced to theCLEAR Inner Circle viaan email announcement.The emails will besegmented by tier andnotify customers of theirauto-enrollment into aprogram tier.It will invite them to signin to their account toview rewards and beentered into asweepstakes.
  14. 14. Banner on My Account Screen
  15. 15. Homepage13245671. Member Status Box2. Rotating Billboard Area3. Rewards and Partner Offers4. Loyalty Section Navigation5. Customer Quote6. Promotional Boxes7. Support Highlight8. News Ticker8
  16. 16. Homepage - Rotating BillboardsWelcomeUpgradeRefer-A-Friend
  17. 17. ProgramDetailsThe Program Detailspage provides aside-by-side rewardscomparison of thethree tiers.Rolling over a specificreward will display adescription box withadditional detail.
  18. 18. LAUNCH PLANCLEAR Inner Circle1
  19. 19. Initial Qualification CriteriaSource: CLEAR CIM70%854,724 15,741Silver Platinum
  20. 20. Initial Tiered Approach* Tier names are placeholders= Simplicity, ease of implementation and measurementPlatinum 2%Silver 19%Basic 71%• Mid-tier• 19% of customers• Not delinquent in past six months• MRC >$50• Tenure > 6 mo.• Eligible for anniversary gift (value related) andmore highly valued partner offers (Yours for theAsking)• HVC• 2% of customers• MRC >$70• In contract• Tenure >1 year.• Not delinquent on bill• Auto-enrolled at activation• 71% of customers• Motivating• Broad visibility• Keeps program low cost• Packaging existing offers• Eligible for Low Price Guarantee• Eligible for 50% off new device on anniversarydate
  21. 21. FacebookTwitterBanner AdsManualsTrainingCustomerCARECIMWarehouseRelicWareCLEARRetailCLEARITCLEARWebDMEMTMMobileDirectCommunicationsManualsTrainingCLEARSocialMyAccountLoyalty PagesSocial SitesCLEAR Inner CirclePROGRAM EXECUTIONWebsite (MyCLEAR Rewards)Email announcement for launchBanner ads in MyAccount and on sign-inpagesWelcome emailAnniversary emailsProgram email and text messaging updatesPilot PhasePhase 2Phase 3Foundational Layers: CIM, Brand, Legal
  22. 22. Launch SchedulePhase 1: PilotLaunch Pilot 4/13• Atlanta (69k) + 3 otherMature Markets• Limited Rewards• Integrated w/ MyAccountand CIM• Test against controlPhase 2: Roll outNationwide launch 9/15• Measure performance by tiers• Sweepstakes begins• Begin work on additionalrewards and site functionality• Integration of engagementmetrics with CIM begins• “Build-as-you-go” designSeptemberApril - June22Q2 pilot followed by Q3 launch
  23. 23. Thank you
  24. 24. Budget
  25. 25. RESEARCH RESULTSCLEAR Inner Circle2
  26. 26. OverviewResearch was conducted to:• Determine which rewards were most preferred• Assess interest in a “Basic” & “Platinum” tier program• Collect demographics and satisfaction loyalty driversThis top line report is based on:• 875 completed surveys collected from 1/25 – 1/31/20112Clearwire ConfidentialBasic Platinum Total Total %Active 374 44.7% 370 40.4% 744 85.2%Cancelled 91 10.7% 40 4.1% 131 14.8%GrandTotal 465 55.4% 410 44.6% 875 100.0%Top Line Sample Size
  27. 27. Reward RankingReward TypeAverageScore95%Lower95%Upper1 Free upgrade of device every two years Product 12.82 12.51 13.142 Sweepstakes ($100gift card monthly plus other special events) Promotion 9.16 8.76 9.563 Anniversary gift ($5off your next month’s bill) Recognition 9.03 8.67 9.394 Free activation & shipping when adding a new device or service Product 8.96 8.67 9.245 Special discounts for renewing your contract early Product 8.22 7.87 8.576 Refer a friend and get a free month of service Promotion 8.09 7.70 8.497 Get free trial of new devices or services before you buy Product 7.81 7.48 8.158 Free McAfee Security Software Partner 6.01 5.57 6.469 Free evaluation of your existing plan to determine ways you can save money Product 5.73 5.37 6.0910 Free web backup (up to 1GB) Partner 5.13 4.78 5.4811 Dedicated toll-free support line Service 4.96 4.65 5.2712 Save $5/month on DirecTV Partner 3.47 3.10 3.8413 60-days free Netflix (new customers only) Partner 3.26 2.93 3.5914 Be the first to get the newest devices (pre-order) Product 3.14 2.90 3.3815 Early notification of new products/services Product 2.11 1.94 2.2716 $10credit for music content service like MSPOT.com Partner 2.10 1.86 2.34This table shows which rewards respondents prefer. The average scores have been standardized so they are relativeto one another, e.g., a “12” is twice as preferred as a “6.” The upper and lower limit columns show how some scoresmay overlap within a statistical confidence interval.Please note that these initial rankings include responses from active and cancelled customers.2Clearwire Confidential
  28. 28. Strong Interest Among MembersActive respondents confirmed strong interest in participating in aloyalty program by CLEAR.2Clearwire Confidential
  29. 29. Confirmed by past membersCancelled respondents confirmed the potential impact of a loyaltyprogram on their decision to stay with CLEAR.2Clearwire Confidential
  30. 30. Likelihood to “Join”Based on the way the program was presented, design of the program is inline withindustry best practices in terms of simplicity, high value, motivating and appealing.Active customers only.3Clearwire Confidential
  31. 31. McAfee Loyalty Offerings• Current Relationship:• Direct partnership with executed MSA• We have a few existing customers from legacy contract but software is not currently offered to new customers• Brand Benefits:• Recognized leader in internet security and #1 in Malware Detection• Base Offer Terms:• McAfee Antivirus Plus 2011 security software (1 computer)• 6-months of FREE protection for our customers• 43% discount over retail price for continuation of service• 25% of recurring service revenue share• No cost to Clear• Premium Offer Terms (Top 2%):• McAfee Total Protection 2011 security software (up to 3 computers)• 12-months of FREE protection for our premium customers• 50% discount over retail price for continuation of service• 45% of recurring service revenue share• $9 per license cost to Clear
  32. 32. Base Offer Revenue ModelAssumptions OutcomeEstimated total free 6-month licenses distributed over2 Years (adoption of 15% for the 1.2M base over 2years)180,000Annual distribution (spread evenly throughout theyear)90,000CLWR Cost per license for 1st 6-months: free offer $0Post 6-month Trial to Paid (TTP) conversion rate andrenewal rate50%post 6-month discounted Sales Price (40% off) uponconversion$23.99Revenue share paid to Clear after year 1 conversions Year 1 = 25% Rev Share of TTP(90K licenses /50% conversion = 45Klicenses/$24= $1.08M/.25% revenueshare)$269,900Revenue share paid to Clear for year 2 conversionsand year 1 renewalsYear 2 = 25% Rev Share of TTP andof Year 1 Renewals (50% of year 1license renew, plus 50% of the new year2 TTP)$404,800Clear investment of 180,000 licenses over 2 years $0Net Revenue to Clear $674,700
  33. 33. Premium Offer Revenue ModelAssumptions OutcomeEstimated total MTP licenses distributed over 2Years9,000Annual distribution (spread evenly throughout theyear)4,500Cost per license $9.00Trial to Paid (TTP) for each year (1 and 2) 50%Post 1 year discounted Sales Price (50% off) $39.99Renewal percent for year 2 60%Revenue share paid to Clear after year 1 conversionsYear 1 = 45% Rev Share of TTP(4.5K licenses /50% renewal = 2,250licenses/$40= $90,000/.45% revenueshare)$40,500Revenue share paid to Clear for year 2 conversionsand year 1 renewalsYear 2 = 45% Rev Share of TTP andof Year 1 Renewals (60% of year 1 licenserenew, plus 50% of the new year 2 TTP)$64,800Clear investment of 9,000 licenses over 2 years $(81,000)Net Revenue to Clear $24,300

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