8 scientifically validated tools to drive advocacy, leading to longterm profitable relationships with your client base: - Member get Member - Beta Testing - Hawthorne Effect - Ambassador Programme - Causal Campaigns - Community Platforms (user help user) - Advocacy Tracking (NPS & else) - Innovation (Products/Service)

1. Key tools
to drive profitable
customer relationship
Berlin, May 22nd 2012
Alexander Meili, European Strategy Officer

2. Who we are
• ICLP Loyalty
– A full-service loyalty marketing agency with a global presence
– 25 years of experience in loyalty marketing
– Strategy / Insight / Dialogue / Delivery
• Collinson Latitude (sister company)
– Innovative products/tools delivering incremental revenue to clients
Page: 2 © 2012

3. About Telco Loyalty

4. Increasing need of innovative loyalty
Tough macro context: Digital Revolution:
Saturated Markets
Commoditization Cannibalization
European Countries in Recession
(at least 2 consecutive quarters
of negative growth)
17 mill.
people
jobless
(11%)
-10
€Bn Focus
Increase of on
Demand
contraction
commercial retention
agressiveness SMS Revenue Loss due to OTT players of telco
operators worldwide, 2011
(1) Source: Eurostat, March, 2012 and IMF, 2012. (1) Source: Ovum, 2012.
Page: 4 © 2012

5. 3rd
Focus Shift Happening most important
reason
to change provider
4% 43% (after: new handset, 76%
lower rates) prepaid subscribers
3rd party Telcos have a loyalty rank loyalty programs
model program offering high value
(Americas: 60%) gifts most appealing
(Europe: 35%) (71% on contract)
74% TELCO
Subscribers
Points
driven
LOYALTY
Telco Loyalty Facts 50%
expect higher
66% FACTS
Operators
customer level
support when being
believe that loyal or premium
customers are less client
loyal today
than they were two
years ago 70% 20%
expect shopping
cite customer vouchers as
retention and loyalty loyalty reward
as the critical factor
for driving
their growth
Sources: ICLP, Amdocs, Buongiorno , World Mobile Congress
Page: 5 © 2012

6. Recent Programme Launches
Page: 7 © 2012

7. Loyalty Models applied
Privileges (soft)
legend: programmes
no programmes
targeted
‘Tiers' ‘Tiers and Points'
Tiered program that recognises
Reward and Recognition
customers according to
program that offers telco and
ARPU spend with telco and
non-telco services and rewards
non-telco services
‘Information led' ‘Points'
Customers receive points for
Customers receive Telco
money spend and interactions
promotions and exclusive Telco-
with Telco that can be
Partner information – no
redeemed for new telco
registration needed
products
simple
Incentives (hard)
simple targeted
source: ICLP strategy, 2011
Page: 8 © 2012

8. Loyalty Models applied
Privileges (soft)
legend: programmes
no programmes
targeted
‘Tiers' ‘Tiers and Points'
Tiered program that recognises
Reward and Recognition
customers according to
11%
ARPU spend with telco and
non-telco services 4%
program that offers telco and
non-telco services and rewards
trend
‘Information led' ‘Points' increasing!
Customers receive points for
Customers receive Telco
money spend and interactions
promotions and exclusive Telco-
57%
Partner information – no
registration needed 28%
with Telco that can be
redeemed for new telco
products
simple
Incentives (hard)
simple targeted
source: ICLP strategy, 2011
Page: 9 © 2012

9. Why is loyalty getting this buzz?
Customer Lifecycle
Customer
value Upselling
 Word of mouth
Intensification
 From acquisition to
long term engagement
Activation Avoid
downselling
 Retention cost <
Acquisition cost
 Profit center
 Churn prevention
Acquisition Customer retention Customer win-back
Page: 10 © 2012

10. However, some failed…
Low engagement of customers
Lack of top executive Lack of customer
sponsorship insight
Proposition not
Business case compelling enough
built on non-
realistic grounds
Performance insufficiently
measured
source: http://blog.iclployalty.com/tag/loyalty-programme-2/
Page: 11 © 2012

11. What is the Secret
of Successful
Loyalty?

12. The Tool Set
Page: 13 © 2012

13. Follow Loyalty Trends?
Which ones?
mainly tactical – long-term engagement not guaranteed
Page: 14 © 2012

14. Match competitor proposition?
no differentiation – long-term engagement not guaranteed
Page: 15 © 2012

15. Start with the Loyalty Ladder!
Advocate!
Supporter
Client Loyalty marketing
Customer
Prospect Traditional marketing
driving Advocacy is the key to guarantee long term engagement
Page: 16 © 2012

16. What drives
customer
advocacy?

17. Growth by customer advocacy: 8 tools
3. Empowered 4. Ambassador
1. Referral program 2. Tryvertising
involvement program
-10% 25%
High partici-
Customer Buy the
pation and
acquisition product
awareness
Vodafone after testing
cost
Welcome to Spain starts
Joyn beta „…would you like to „wanna become a
AT&T Refer-
testing help design the new trend scout for a
A-Friend
program Boing airplane?...“ year?“
program
5. Causal campaigns 6. Influencer outreach 7. Advocacy tracking 8. Innovation
churn
reduction
generates 30% (non core)
BT, in advisory Feed-
volunteer sales boost churn Benefit Bundles
support of panel back
sales
reduction adding
Childline outside
differentiation
-in
Page: 18 © 2012

18. CEM: Exceeding customer expectations
Adocacy Toolbox
1. Referral
2. Tryvertising
Added program
Value
Experience 3. Empowered 4. Ambassador
involvement program
Expectation Level
Experience Level
5. Casual 6. Influencer
campaign outreach
7. Advocacy
8. Innovation
tracking
Page: 19 © 2012

19. Performance Predictor
NPS leaders
4x growth vs.
industry
average
the more clients who are advocates, the higher the growth
Page: 20 © 2012

20. Take-Aways
Difficult economy calling for impactful loyalty
Advocacy = long term strategic goal of loyalty
Correlation with revenues as ROI
Most powerful asset: Existing Customers
Validated Tools to Drive Advocacy
Page: 21 © 2012

21. Thanks!
ICLP Loyalty
Alexander Meili
European Strategy Officer
alexander.meili@iclployalty.com