The document summarizes a presentation on achieving true customer engagement through a 5-step voice of customer (VOC) driven relationship marketing process. It discusses conducting VOC research to understand customer priorities and expectations. It then outlines the 5 steps: 1) using VOC to drive relationship strategies, 2) creating opt-in databases with customer profiles, 3) deploying multichannel marketing per customer preferences, 4) delivering strong customer service, and 5) increasing the power of online experiences. Case studies show companies achieving double-digit increases in results through this process.

2. Achieving True Customer Engagement: The 5-Step Process for Increasing Sales 10 – 35%

3. Presenters Ernan Roman President Ernan Roman Direct Marketing, (ERDM) Recognized as the industry pioneer w ho created three transformational methodologies: Integrated Direct Marketing, Opt-In Marketing, and Voice of Customer Relationship Research. Will be inducted into the DMA Marketing Hall of Fame in October, 2011. Named to “B to B’s Who’s Who” as one of the “100 most influential people” in Business Marketing by Crain’s B to B Magazine. ERDM provides marketing consulting services for Fortune and Growth companies such as Microsoft, NBC Universal, Walt Disney, IBM, MSC Industrial Direct, and Songza Media, Inc. His latest book on marketing best practices is titled, “ Voice of the Customer Marketing: A Proven 5-Step Process to Create Customers Who Care, Spend, and Stay”. He is also the co-author of “Opt-In Marketing” and author of “Integrated Direct Marketing”. [email_address] www.erdm.com

4. Presenters Richard Bonfiglio: Senior Director, Marketing Operations MSC Industrial Direct Rich currently heads up Marketing Operations for MSC Industrial Direct, a direct marketer and distributor of industrial supplies. With over 15 years experience in direct marketing strategy, tactics, and analytics, he oversees strategy, tactical implementation, and measurement of programs that utilize field sales, telesales, direct mail, e-mail, and SEM to drive acquisition, retention, and customer penetration. Rich also has responsibility for advertising production, productivity enhancement, talent and project management, and administration of the overall marketing budget. [email_address] www.mscdirect.com

5. Presenters Eric Greenberg EVP Marketing Life Line Screening, (LLSA) Life Line Screening is the country’s leading provider of community-based preventive health screenings. LLSA screens nearly 1 million people in the US and UK each year in over 17,000 community locations – helping consumers avoid the catastrophic effects of stroke and heart disease. Eric has helped build LLSA into one of the country’s premier direct-to-consumer healthcare companies. Before joining LLSA in 2003, Eric, was President of DMM Partners, a direct marketing consulting practice. He also was Co-President of InteliHealth, a joint venture of Aetna US Healthcare and Johns Hopkins University. [email_address] www.lifelinescreening.com

6. Presenters Doug Stein President HMS National, Inc. Doug was a distinguished Fortune 500 consultant for Accenture in the 1990’s. There he helped manage some of the firm’s most prominent projects while also being key to the development of significant corporate solutions and industry offerings that notably increased market share and profit for the world’s largest consulting firm. In his current position, Doug is the senior executive at HMS National responsible for developing and delivering innovative growth strategies in a historically mature and commoditized industry. [email_address] www.hmsnational.com

7. Presenters Tamara Rosenthal Executive Director, Brand Marketing Ideeli Tamara Rosenthal is the executive director of brand marketing at ideeli, responsible for developing the company’s brand positioning, public relations, social media and editorial direction, as well as spearheading creative campaigns to enhance the high-growth ideeli business. She works closely with the ideeli merchandising team to create innovative brand partner marketing programs and forge key partnerships across the fashion, media and retail industries. Prior to joining ideeli, Tamara’s career spanned the fashion and e-commerce industries, including senior level positions at Ferragamo, Vogue, Lacoste and asmallworld.net . While serving as vice president of marketing at Lacoste, Tamara was recognized as one of the “Top Women in Business” by PINK Magazine and credited in Brandweek for being instrumental in freshening the “LACOSTE Look.” A native New Yorker, Tamara is married, with two children. She is a graduate of the Columbia Business School with a M.B.A. in marketing. [email_address] www.ideeli.com

8. Overview

9. What if we could treat customers the way we want to be treated… and generate double-digit increases in response and revenue?

10. This workshop was created to teach you the 5-Step Voice of Customer-Driven RM Process which will enable you to achieve consistent double-digit results such as these…

11. Achieve Consistent Double-Digit Results Microsoft Opt-in rates up to 95%. Open rates greater than 50% . Response rates performing in the double-digits. Volume license revenue from those in the VOC-driven program is 2X greater than the control.

12. “ When HP uses the Voice of Customer methodology, our marketing campaign results improve dramatically: response rates improve 3X to 10X, sales increase 2X or more, and we can spend far less to get great results. When we don’t use VOC, our results can suffer greatly.” Garry Dawson, Hewlett-Packard, Americas Advertising and Direct Marketing Manager

13. Growth Company Results HMS National, Inc. 25% increase in average renewal rates. Life Line Screening 50% growth in returning customers.

14. 5-Step Voice of Customer-Driven RM Process for Achieving Consistent Double-Digit Results Step 1: How to Use Voice of Customer Research to Drive Your Relationship Strategies. Step 2: How to Create Powerful Opt-In Databases with Customer’s Self Profiled Information. Step 3: How to Deploy Your Multichannel Mix Per Opt-In Preferences. Step 4: How to Deliver Strong Customer Service, (This is a Marketing Responsibility!) Step 5: How to Increase the Power of Your Online Experiences by 9X.

15. Important: Opt-in is not about passively agreeing to receive e-mail. It’s about actively opting-in to a relationship and self-profiling your preferences and aversions.

16. How to Use Voice of Customer Research to Drive Your Relationship Strategies Step 1

17. 5 Step VOC-Driven Relationship Marketing Process VOC RESEARCH Step 1 OPT-IN ENGAGEMENT Step 2 VOC RESEARCH Step 1 MULTICHANNEL MARKETING Step 3 VOC RESEARCH Step 1 HI-VALUE SERVICE Step 4 VOC RESEARCH Step 1 SOCIAL MEDIA Step 5 VOC RESEARCH Step 1

18. Don’t Re-Engineer Your Relationship Marketing Strategies from the Isolation of Your Conference Room…

19. Voice of Customer Relationship Research (VOC) This economy and social media have profoundly changed buyer’s priorities and expectations. Voice of Customer insights will ensure you develop truly customer-focused strategies which drive relevance and long term revenue.

21. VOC Learnings Question 1: Which has more impact on retention and repeat purchases, Customer Satisfaction or Customer Engagement / Relationship? And, by a factor of what? Answer 1: Engagement / Relationship strength has 12 times more influence on retention and repeat purchases than Satisfaction. Satisfaction is a minimum expectation.

22. VOC Learnings Question 2: Which is a more significant driver of word of mouth recommendations, Customer Satisfaction or Engagement / Relationship? And, by a factor of what? Answer 2: Engagement / Relationship strength has 18 times more influence on word of mouth recommendations than Satisfaction. Profound implications for re-allocating greater budget for Retention / Relationship building.

23. VOC Learnings Relationships: “ The fastest way to be forgotten is to buy from you.” “ Relationship? You guys are about ‘buy and die’!” “ We buy. You disappear without a trace. Oh, except for the monthly bills.”

24. VOC Learnings The Web: “ I don’t just want to transact, I want to connect with your company, your brand and your community.” “ An easy navigation and commerce process is a minimal competency … you better be at least as good as Amazon.” “ When you tell me to go to the web for service, especially while I am growing old waiting for a phone rep, what I hear is ‘Go…help yourself.’” In Part 4, tomorrow, we’ll analyze the site the 9/19/11 issue of BtoB magazine ranked #1, and see how it compares, per VOC Research findings.

25. WSJ, 7/26/06 The Importance of Community Per McKinsey research, people who participate in an effective online community, return to a site: Nine times as often. Five times as long. This represents a 45 time increase in loyalty.

26. Threadless Community driven, online marketer specializing in T-shirts designed by members of the community. Community is made up of 3 groups: Purchasers. Designers. Reviewers. According to the Sloan Management Review : 95% of those purchasing from Threadless.com have voted and posted comments…before making a purchase . Results: Over 1 million users. 30 million dollars in annual sales. Approx. 30% margins .

28. Additional VOC Learnings Communications: “ E-mail may be the base of your communications with me, but I’m getting too much junk. If it’s really important, send it to me by mail.” “ Mail should be specific to my role, to what I do all day long.”

30. Additional VOC Learnings Communications and Data Gathering: Advice from C - Level Execs: “ You think because I’m the CIO, you have to send all your marketing communications to me. That’s not how decisions are made here.” “ You’re using me as an executive mailroom and I don’t appreciate it.” “ I will tell you who you should communicate with, what information they need, when and via what medium.”

31. VOC Helps You Transform your marketing… From “CRM” and “managing customers”… which has had a high failure rate. To “CMR” and “customer managed relationships”. Per Walt Disney: “ The term “CMR” reinforces the notion of the guest being the one who is driving the experience.”

32. VOC Helps You Understand and Pre-Test: How to change from a relationship based on just transactions with customers to a deeper engagement based on a broader understanding of their needs. The critical issues facing decision makers in this economy, as they evaluate your product or service. Steps in the decision-making process. Who are the decision makers and the empowered influencers. What information and offers are most effective at each step and via what mix of channels.

33. VOC Helps You Understand and Pre-Test: The optimal role for: Web. Social Media. Email / Mail. Inside Sales. Field Sales. Tech. Stores.

34. VOC Helps You Understand and Pre-Test: How your customers define a value-added and competitively differentiating relationship with your company. Effective value propositions for engaging customers in an Opt-In relationship with you, so they will trust you with their detailed self-profiled preferences.

35. VOC Helps You Understand and Pre-Test: What information and how much information customers / prospects will self-profile regarding their preferences. This information will populate your Opt-In database with uniquely accurate information.

36. MSC Industrial Direct Deploying The Voice-of-Customer Process Across Multiple Channels

37. Presenters Richard Bonfiglio: Senior Director, Marketing Operations MSC Industrial Direct Rich currently heads up Marketing Operations for MSC Industrial Direct, a direct marketer and distributor of industrial supplies. With over 15 years experience in direct marketing strategy, tactics, and analytics, he oversees strategy, tactical implementation, and measurement of programs that utilize field sales, telesales, direct mail, e-mail, and SEM to drive acquisition, retention, and customer penetration. Rich also has responsibility for advertising production, productivity enhancement, talent and project management, and administration of the overall marketing budget. [email_address] www.mscdirect.com

38. Founded in 1941 Industrial supply distributor B-to-B: over 70% to manufacturing Multiple sales channels Exceptional service: every customer & every order Customized solutions to fit customer needs

39. MSC’s Voice-of-Customer Experience Multiple internal voice-of-customer methods Direct sales force feedback Sr. Management customer visits MSC visits by customers Two formal projects VOC 1 – May 2009 VOC 2 – March 2010 VOC Driven Programs Ongoing VOC approach

40. Voice-of-Customer 1 We conducted our first formal VOC during the recession The process started with the very simple purpose of answering a question Had the recession changed how customers view the MSC model? Customer needs were rapidly changing Did we need to change to?

41. VOC 1 - Our Approach Validate what we thought we already knew Objectives: Determine the impact of the economy on spending Identify the factors which drive When to buy Identify the factors which drive What to buy Identify the factors which impact Who to buy from Determine whether any suppliers receive the majority of their orders and why Multi-channel sample

42. VOC 1 – What did we learn? Weren‘t losing significant numbers of customers as a result of the recession We were witnessing a shift in buying behavior Validated MSC’s value in the market Uncovered significant opportunities No significant re-work of existing services

43. VOC 1 – What did we learn? Don’t invest time and resources to “win back” customers who haven’t really left No need to build out new communication channels Messages needed to be communicated in a manner relevant to the individual customer

44. Voice-of-Customer 2 A year after VOC 1 we conducted our 2 nd formal VOC We built off of VOC 1 and set off to investigate how to drive deeper customer engagement VOC 2 delved into brand perceptions, communication preferences, and use of technology

45. VOC 2 – What did we learn? Exceptionally positive views of MSC but less targeted communications were beginning to cause frustration “ I get way too many emails…I don’t even bother to open them anymore.” Very individualized preferences Preference-driven communications “ If I’m getting stuff I want [targeted and relevant communications], I have no problem telling MSC that information.”

46. VOC 2 – What did we learn? Very individualized preferences Use of information and technology “ I get the general idea of the types of products available by glancing at the two or three pages in the Big Book, and then look at the product details online.” vs. “ I just like doing it how I’m used to doing it”

47. VOC 2 – What did we learn? Less sophisticated perception of MSC than we had anticipated The basics DELIVERY INVENTORY SERVICE What about all the “cool stuff”?

48. VOC Driven Programs New Customer Onboarding – Determine customers’ wants and needs at the beginning of their lifecycle Objectives: Show the customer we care about the service they just received Profile the customer to determine what products, services, and marketing are most relevant to them Determine what channel will be most effective to retain, penetrate, and grow each individual customer Results: 20% lift in response rate Over 20% lift in sales per customer

49. VOC Driven Programs Existing Customer Profiling – Utilize data modeling to revisit “untouched” accounts to decrease attrition Objectives: Show the customer we care about the service they just received Profile the customer to determine what products, services, and marketing are most relevant to them Determine what channel will be most effective to retain, penetrate, and grow each individual customer Results: 5 to 10 point reduction in attrition rate Over 10% lift in sales per customer

50. Customer Profiling – Implications Assumptions Let’s assume you have a 40% attrition rate Assume each retained customer gives you $1,000 Without profiling 600 customers are retained Revenue = $600,000 With profiling 700 customers are retained Revenue = $770,000

51. Key Takeaways VOC projects should not be viewed as one-off events We’ve gone back to the reports and interviews to provide groundwork for several larger projects Get as much of the organization involved in the project as possible The value of listening to an in-depth conversation with your customer cannot be emphasized enough A VOC doesn’t always have to be a formal process Whenever possible we look for ways to engage with a customer in a one-on-one setting, as opposed to sales calls or focus groups

52. Key Takeaways Marketers spend large amounts of time pouring over their own internal data Good data analysis can tell you what happened yesterday and what might happen tomorrow Customer insight helps to validate what the data is pointing to

53. LIFE LINE SCREENING GAINING AN IN-DEPTH UNDERSTANDING OF CUSTOMER REQUIREMENTS

54. Eric Greenberg EVP Marketing Life Line Screening, (LLSA) Life Line Screening is the country’s leading provider of community-based preventive health screenings. LLSA screens nearly 1 million people in the US and UK each year in over 17,000 community locations – helping consumers avoid the catastrophic effects of stroke and heart disease. Eric has helped build LLSA into one of the country’s premier direct-to-consumer healthcare companies. Before joining LLSA in 2003, Eric, was President of DMM Partners, a direct marketing consulting practice. He also was Co-President of InteliHealth, a joint venture of Aetna US Healthcare and Johns Hopkins University. [email_address] www.lifelinescreening.com Presenters

55. Life Line Screening is the leading provider of community-based preventive health services. Provides affordable, high-quality screenings that are essential to the early detection of risk for stroke, heart disease, diabetes, osteoporosis and other conditions. The direct-to-consumer model is at the forefront of consumer- driven healthcare. Background

56. Background Significant number of customer touch points. Nearly 1 million people screened / year. 2 million phone calls. Screen in 15,000 community locations. 90 million direct mail letters. 1 million “Results” letters. 1 million email subscribers.

57. How can we accomplish this? Background Strategic priority is customer retention. Goal: Double the number of returning customers from 2009 to 2012.

58. "How likely is it that you would recommend our company to a friend or colleague?" 0 1 2 3 4 5 6 7 8 9 10 Detractors Passives Promoters Background Initial focus: Net Promoter Score (NPS).

59. What we did to improve NPS: Management focus & attention: Customer First Initiative. Scorecard. Incentives. Training Blasts. “ Adoption” of 5 low performing teams. Streamlined customer feedback and response. 14 Point Customer Guarantee. Employee empowerment. Background

60. Monthly Percentages NPS PROMOTERS PASSIVES DETRACTORS Customer First Mgmt Kickoff Improvement in NPS

61. Life Line Screening = 66%

62. So, why do a VOC program? A happy customer is not always a returning customer. Qualitative vs. Quantitative insights. Interactive / in-depth. Answers the question, “why?”

63. Set a Budget and Timeline Internal or external execution. Length of interviews. Sample size quantity. In person vs. telephonic interviews. Geographical considerations. Difficulty and cost of recruiting.

64. The VOC Process Determine Objectives. Set budget and timeline. Determine your audience. Develop key questions. Conduct interviews. Analyze findings.

65. VOC Objectives Gain a VOC-driven understanding of how LLSA can increase customer retention. Make sure learnings are actionable. How customers view LLSA strengths and weaknesses. Why customers return or don’t return. Opportunities for developing value-added services. Reactions to marketing communications and Test Results Letter.

66. Selecting Your Audience Who are you trying to target? RFM considerations. How many interviews? Duration of interviews? Specific product line? Incentives.

67. Life Line Screening VOC Audience Screening History Age 50-65 Age 66-80 Total M F M F Screened 1x Screened 30-60 days prior Screened 12-18 months ago and re-solicited at least 1-3x Screened 2x Screened 30-60 days prior Screened 3x or more Screened 30-60 days prior

68. Develop Key Questions Limited # questions (35-40) in 1 hour. Determine who the interviewer will be. Develop Interview Guide. Does / should the customer be prepped in advance. Interview Guide. Marketing materials.

69. Key VOC Questions How did you hear about us? Why did you come? Influencers? Strengths / weaknesses? Credible / trusted? Expectations? Likely to come back? Why? Pre / Screening / Post experience Communications & contact strategy What do you tell friends?

70. Conduct Interviews 48 one hour interviews. All by phone with professional interviewer. Interviews recorded; “best of” listened to by management team.

71. Key Findings VOC confirms NPS Scores. VOC provided these additional in-depth insights: LLSA has created a valuable service and is perceived by many as their advocate and trusted resource for their health. Perceived as efficient, professional, convenient and excellent value for money. We allow them to be proactive and empower them to take control of their health.

72. Key Findings (cont’d) LLSA patient test results summary is “valuable ammunition for the patient” and helps the doctor take them more seriously. It’s also a patient report card for the doctor. Doctor plays powerful role in acquisition & retention. What LLSA is doing is well received, but customers want more : Cu stomers not sure what to expect from LLSA (i.e. transaction vs. relationship). Greater & more personalized touches at each touch point. Ongoing information & value-added solutions.

73. VOC Follow Up Actions Create a higher value customer experience at key points: Pre-screening During the screening Post screening Established, for 1 st time, Director of Customer Experience as part of the Marketing Team Looks at process holistically Established Customer Listening post Owns Customer Service Function

74. VOC Follow Up Actions Call Center moved from Operations to Marketing Recognition of its importance Revision of success metrics Change in compensation, recruiting and hiring Substantial improvements in profitability

75. VOC Follow Up Actions Increased Customer Segmentation Call Center Prescreening process Ongoing communications that are tailored to each individuals medical history and outcomes Product Development

76. VOC Follow Up Actions: Next Up Build an online community that provides an opportunity for sharing Build a bridge to the Primary Care Doc Create a “Model Store”

77. VOC Results Customer retention = #1 strategic priority. VOC helped create unity of purpose and vision for the entire management team. Identified opportunities for improvement across all functional areas. Work in progress…but seeing a 50% increase in returning customers.

78. 1. Voice of Customer Relationship Research Specialized depth research to understand customer/prospect needs, decision making process and expectations of the optimal experience via web, social media/community, email, offline media and customer service call centers. These insights enable development of customer driven Relationship Marketing Strategies and Action Plans. 5 Step VOC-Driven Relationship Marketing Process

79. Your Top 3 Takeaways? 1. 2. 3.

80. Part II: Topics How to Create Powerful Opt-In Databases with Customer’s Self Profiled Information. Drawing for 2 Autographed Books:

81. How to Create Powerful Opt-In Databases with Customer’s Self Profiled Information Step 2

82. 5 Step VOC-Driven Relationship Marketing Process VOC RESEARCH Step 1 OPT-IN ENGAGEMENT Step 2 VOC RESEARCH Step 1

83. $ $ $ Traditional “Spray and Pray” Isn’t Working So Well…

84. Opt-Out Is The Norm More than 76% of US adults have registered for the National Do-Not-Call (DNC) Registry (Harris Interactive). Average election voter turnout: 50%. Over 191 million phone numbers are listed on the DNC. Scores of states have introduced “Do-Not-Mail” bills. Italian government banned all unsolicited mail, phone, e-mail, fax, mobile communications without affirmative consent.

85. “ Stalking” Julie Matlin was tempted by a pair of shoes on Zappos.com Then the shoes started showing up in ads on other sites she visited. “ It was as if Zappos had unleashed a persistent salesman who wouldn’t take no for an answer.” “ Do-Not-Track” legislation is a hot topic. NYT, 8/29/10

86. Respect customers and prospects by asking them to define their unique requirements in response to meaningful value propositions presented by the marketer. The Alternative…Powerful and Socially Responsible Opt-In Relationships

87. As a result of this dialogue, customers populate your Opt-In database with uniquely detailed, actionable information. The Alternative…Powerful and Socially Responsible Opt-In Relationships

88. Important: Opt-in is not about passively agreeing to receive e-mail. It’s about actively opting-in to a relationship and self-profiling your preferences and aversions.

92. The Opt-In Process VOC learnings drive strategies for customer engagement so they Opt-In to a deeper level of engagement. Customers profile: needs, decision making process, offer, message, timing and media preferences. This detailed information forms your uniquely accurate, proprietary database. Customers are actively engaged in contributing to, and defining their relationship with your company.

93. Opt-in is based on reciprocity of value : Recognition that in order to receive or access increasingly relevant information, they must share increasing amounts of information regarding their preferences. If they trust the marketer and see a useful value proposition, people will Opt-In and self-profile significant amounts of information. Reciprocity of Value: marketers provide increasingly relevant information and offers based on increasingly detailed Opt-In preferences provided by customers and prospects. The Opt-In Process

94. CHALLENGING TO IMPLEMENT! Operational precision in managing offers and communications per individual customer requirements. And…this Process requires:

95. The Payoff - Your ability to: Achieve consistent double-digit response rates. Change the customer experience: From unsolicited communications that may have little relevance. To… solicited communications that arrive with the expectation of value.

96. MICROSOFT VOC-DRIVEN SMALL BUSINESS RELATIONSHIP MARKETING PROGRAM

97. Situation Overview The 20 million Small Midsize Business (SMB) firms represent substantial growth opportunity. Market and competitive landscape raising stakes to increase need to serve the SMB market. Customers have increasing comfort with transacting online (64% broadband and 36% with websites). Total SW Market Spend* Avg. # of Employees* # of US Firms* 1-4 PCs Lower Small Business Core Small Business 5-24 PCs 25-49PCs Lower Midmarket 1+ PC Home-Based Business 50-249PCs Core Midmarket $12BN 9 228 14M 3.5M 2.5M 180K 100K * - Source: AMI 2008

98. Situation Overview A majority of Microsoft product sales in Small and Medium size business segment come through a channel partner (e.g. Value Added Reseller, Retailer, Original Equipment Manufacturer). Customers feel they have no relationship with Microsoft. SMB customers are mostly transactional (gather information, trial, purchase and disengage). Past Small Business Voice of Customer (VOC) Research indicated that most customers would welcome a relationship with Microsoft. Hence the need for a relationship program.

99. Situation Overview As a result of the first Small Business VOC, MSFT developed the SB+ Relationship Program. Results: *Source: AMI Tracker Panel Study Average 2008 - 2009 SB+ RM Opt-Ins

100. How to Approach the Diverse SMB Segment? Based on the success of SB+, MSFT wanted to scale to Midmarket (size: 100-500 employee) companies. Key questions: Will the online resource appeal to midmarket IT and business decision makers? Will they Opt-In? What are key enhancements that can help deepen customer engagement? Can results continue to exceed results of house file?

101. SMB Relationship Program Goals SMB Customer Relationship Program Goals were: Increase customer satisfaction scores. Increase licensing renewal rate. Improve customer engagement. Deliver the most relevant content and communications. Improve marketing efficiencies.

102. Pillars of the Online Relationship Program Usage Benefits Activation Implementation Customer Satisfaction

103. Voice of Customer Helped Answer Key Questions For 1-500 employees, what type of training, support, community and communication can drive deeper engagement? How to improve the value and usage of training. How to improve the support offerings to provide greater value. How customers define a value added community. How the communications strategy should be improved. Was there anything else?

104. We listened and learned… Relationship Program Value Must be Obvious and Differentiated l Keep it focused Online Resource Center value: One stop, convenient resource for SMB customers. Clearly different from other resources. Every facet of the user experience must prove this. Make it easy Must provide easy site navigation. Use lay terms / user friendly (non-tech) key word searches. Provide access to information and business solutions from every part of Relationship Program. Deliver ‘wins’ Make the initial interactions engaging by offering a ‘quick training.’ Help users by providing industry, business and technology info. Partner with non-MSFT experts for valuable content.

105. We listened and learned… l Satisfy Diff. Needs Target content based on start-up, segment, business needs and user level. Offer ways for 3 different user types (Learners, Connectors, Collaborators) to engage. Focus on Needs Develop from the user’s perspective, not MSFT. Request user feedback at every touch point. Use feedback to evolve the experience, provide relevant content / communication. Support Alleviate pain by using simple terms as self-help key words. Highlight common problems and provide quick access to solutions. Leverage peers for additional support. Personalize the Experience per Business Needs, User Level, Size, Industry and Products

106. Training As a key benefit, users should be introduced to training early on. Follow-up training to encourage the next ORC interaction. Offer user-defined categories for easy access. Make training easy to share. We listened and learned… l Community Peer interaction must be facilitated across a variety of demographic and businesses areas. Points of interaction include: Level of knowledge. Common Problems. Forums. SMEs / Moderators. Support Alleviate pain by using simple terms as self-help key words. Highlight common problems and provide quick access to solutions. Leverage peers for additional support. Tie Training, Support and Community into a Differentiating Relationship

107. Launched the Microsoft Business Resource Center Add in screen shot of 2010?

108. The Value of Opt-In Customers actively engage expecting something of equal value in return. Your Opt-In list will help you achieve greater relevance, marketing efficiency, and increased customer lifetime value. FUTURE: Apply a progressive profiling strategy, reducing the need to ask all questions at once. And enhance the relevancy of the questions and the value exchange. Value Exchange Relevancy Opt-in Profile

109. Opt-In Relationship Ask approx. 14 questions, such as: Name Email Primary role in company (i.e., sales, marketing, finance) Microsoft software usage/ownership Number of employees Industry Primary customer business need What is the biggest challenge facing your organization today? Number of PC’s Number of servers.

110. RM Coverage Relationship Desk Newsletter Trigger Based Database e-Marketing Web: Business Resource Center Customers Microsoft Personalized Service Customized Info Ease of Use Relevancy Profiles Click/Usage Behavior Purchase Intent Xsell oppty/VL

111. Web Resource: Microsoft Business Resource Center Overview Personalized Experience Telephone Customer Service (Tier 1 & 2 only) Support Free online chat tech support Training Software training and computer based training is key Community Library (info) Dashboard Personalization cue Phone # unique for tier 1 and 2 I own/use Dynamics, Office I’m a volume license customer Training for Office. Communities recommended Dynamics, Vista Articles, tips for me. OV, APO

112. Customized Communications Personalized Communications based on Opt-in Data. Welcome e-mail. Monthly personalized e-newsletter. Ongoing e-mails.

113. Results Opt-in rates up to 95%. Open rates greater than 50%. Response rates performing in the double-digits. Receiving very positive customer feedback. RM Customer volume license renewal rate is 8 points higher than non RM customers. Volume license revenue from those in the VOC-driven program is 2X greater than the control.

114. Benefits of the Value Exchange Customer Benefits Microsoft Benefits Personalized Service Customized Communication and Information Ease of Use Relevancy Opt-in Profile information to drive relevancy in web site content and communications Ability to analyze click and usage behavior Marketing efficacy Cross sell/upsell opportunities

115. Key Findings – The Good VOC research and behavioral analysis are critical to program development. Delivering what customers have asked for and offering real solutions to help them succeed drives engagement and sales. Educating customers on how to obtain more value from their software builds positive relationships and keeps you relevant. Profile-based personalization drives high open and click-through rates; fuels engagement.

116. Key Findings – The Challenging External Changing customer interactions from transactional info gathering and purchase to deeper engagement. Keep evolving the value proposition to provide on-going value over time.

117. Key Findings – The Challenging Internal Long-term program in short-term environment . Partner integration is complex. Systems and cross organizational dependencies. Community strategy is challenging with so many types of products and customers.

118. 1. Voice of Customer Relationship Research Specialized depth research to understand customer/prospect needs, decision making process and expectations of the optimal experience via web, social media/community, email, offline media and customer service call centers. These insights enable development of customer driven Relationship Marketing Strategies and Action Plans. 5 Step VOC-Driven Relationship Marketing Process

119. Your Top 3 Takeaways? 1. 2. 3.

120. Parts III and IV: Topics How to Deploy Your Multichannel Mix per Opt-In Preferences. Strong Customer Service…A Marketing Responsibility. How to Increase the Power of Your Online experiences 9X.

121. How to Deploy Your Multichannel Mix Per Opt-In Preferences Step 3

122. 5 Step VOC-Driven Relationship Marketing Process VOC RESEARCH Step 1 OPT-IN ENGAGEMENT Step 2 VOC RESEARCH Step 1 MULTICHANNEL MARKETING Step 3 VOC RESEARCH Step 1

123. “… multichannel customers spend two to three times more than single-channel shoppers. … consumers who engage with the company across three or more channels spend six times more than the average consumer.” - Glen Senk, CEO, Urban Outfitters 1to1 Media, 2-14-11

124. Message Overload

125. “… According to a study from the Direct Marketing Association, 93% of marketers using multiple channels indicated they have attempted to integrate their messaging, but only 27.4% of these said their efforts are “effective”…” DMA Report, “Rowing as One: Integrated Marketing Today” 4/11

126. Right message. Right time. Right person. Delivered per that individual’s media preferences. Without #4, we have achieved: integrated, multichannel irritation ! Let’s Define “Relevance”

127. Integrated Direct Marketing (IDM ® ) Process for the precision timing and synchronization of multiple media and channels. Precision integration of traditional and digital media and contact points. Per individual’s Opt-In preferences… IDM ® is a registered trademark of Ernan Roman Direct Marketing

128. 5 Principles of IDM Start with the Customer (VOC). Create processes for generating feedback from your social media channels and your sales and service reps. This will provide ongoing qualitative and quantitative VOC guidance.

129. VOC Guidance From CSRs Based on VOC feedback from CSR’s, Nordstrom’s, upgraded their website and inventory integration so any item in any store (not just warehouses) is shown on their website and shipped to the customer’s nearest store, with a notice to the customer. Results: Immediate customer adoption. 8% higher sales. Less markdowns. Better inventory control. A boost to customer loyalty. More add-on store sales.

130. 1. Enter your search criteria

131. 2. Select your item And method of delivery

132. 3. Select your location for pick-up or have it shipped!

133. 5 Principles of IDM Start with the Customer (VOC). Create processes for generating feedback from your social media channels and sales and service reps. This will provide ongoing qualitative and quantitative VOC guidance. Synchronize media with laser precision.

134. IDM Response Compression Traditional Time: 1 – 2 Weeks Response Phone E-mail / Mail Phone E-mail / Mail IDM Time: 1 – 24 Hours Response

135. Precision Sequencing & Timing Web and Digital Media Begin with Publicity and Continue Web & Digital Media Email #1 / Mail #1 Print Advertising Email #2 / Mail #2 1 Week 1 Week 1 - 24 Hours After Receipt Per Opt-In Preferences Outbound TM Publicity

136. Direct Mail Versus Email

137. Multichannel Success Factors Unless you obtain Opt-In message and media preferences and aversions … You’ll simply be engaging in multichannel irritation!

138. Multichannel Marketing Web: “ I don’t just want to transact, I want to connect with your company and your brand.” “ An easy navigation and commerce process is a minimal competency. Help me connect with the company and others who share my needs and interests.” “ When you tell me to go to the web, what I hear is ‘Go…help yourself.’”

139. Multichannel Marketing Email: “ E-mail may be the base of your communications with me, but I’m getting too much junk. If it’s really important, send it to me by mail.”

140. From: Daniel Brendler [mailto:D.Brendler@EastHillsChevrolet.onesource1.gmtorque.com] Sent: Monday, June 28, 2010 11:47 AM To: ernan@erdm.com Subject: We received your request for information Long Island's Premier Chevrolet Dealership! . Hello Ernan, We received your email request for information on the 2010 Corvette, are you interested in purchasing one this month? If so, please contact me directly for an appointment to discuss your needs. If you are just looking for information, go to www.chevrolet.com/ (next to the forward slash, fill in the vehicle name, press the space bar and click on the link). When you are in the market for a vehicle, please let me know and I will assist you with current incentives and finance options. Regards, Danny Brendler GM Certified Internet Sales Manager East Hills Chevrolet DESK: (516)869-8100 X 211 Cell: (516)383-3267 Fax: (516)869-9455 [email_address] contactchevydan@gmail.com

141. From: David Stein-Automatic Mail [mailto:david@automatic-mail.com] Sent: Friday, August 13, 2010 6:04 AM To: Ernan Roman Subject: Catching Up With You Dear firstname_placeholder, Hi there! Somewhere along the networking trail or via the exchange of emails, you have a home in my database. I'm sure you can relate to exactly this scenario! I hope that you will want to confirm your contact info and provide correct snail mail and email contact information so we can re-connect. ( You can use the link at the top or bottom of this email.) Or, you may not want my future emails with timely tips on how to get the most out of your budget. You just want to be left alone and we respect that. We only want to mail and email to people who want to hear from us. (Again, you can use the link at the top or bottom to permanently remove yourself from future mailings. ) So, as soon as you finish reading, I would like you to take a minute to click on the link at the bottom of this email to update your profile You can also check a box to add yourself to receive Direct Mail Success, our new newsletter. We're going to help you step out of the box to gain new perspectives on how to maximize the effectiveness of your direct mail and email campaigns. You can unsubscribe to our emails at anytime and we will never share your information, not even with my Aunt Ida and Uncle Lou!! Are you ready to drive sales and increase sales? Then go to AOLS.com and tell me what your priorities are to get started. The next step in updating my database is to talk you! If you have questions, suggestions, requests, or just want to say hello, please drop me an email at: [email_address] or call 347-581-7909. Warmest regards, [email_address] 347-581-7909

142. From: Verizon Wireless [mailto:VZWMail@Reply.VerizonWireless.com] Sent: Friday, September 17, 2010 8:45 PM To: ERNAN@ERDM.COM Subject: Thank You For Your BlackBerry Bold 9650 smartphone Upgrade

143. VOC DRIVEN MARKETING From: Carbonite Customer Care [mailto:customer_care@clickemail.carbonite.com] Sent: Saturday, September 25, 2010 4:37 PM To: Ernan Roman Subject: Your initial Carbonite backup is complete "FEEL GOOD" NEWS! Your initial Carbonite backup is complete. Dear Ernan, Good news: Carbonite has completed your initial online backup for ERNAN-LAPTOP. If you selected Automatic backup, here's how your backup works:

148. Multichannel Marketing Direct Mail: “ Mail should be specific to my role, to what I do all day long”. Direct mail should be used as a highly personalized and relevant communication. Direct mail format should reflect value and include: personalized letter, impact addressed envelope and live stamp. Post card mailings are the antithesis of this and generate low ROI.

152. Multichannel Marketing In Part 4 titled, How to Increase the Power Of Your Online Experiences by 9X, tomorrow we’ll have a detailed discussion of the following: Web Social Media, including: Twitter Facebook

153. Multichannel Marketing Field Sales: Must be trained in disciplined Pre-Call Planning and Relationship Selling. Must be integrated with your other contact points for maximum responsiveness and cost-effectiveness.

154. Multichannel Marketing Inbound Calls: Highest value, highest conversion medium. Outbound Calls: Proactive, service oriented calls to Opt-In lists increases response 500% - 700%.

155. By definition, Inbound callers are more: Qualified. Likely to spend. 5 Principles of IDM Start with the Customer (VOC). Create processes for generating feedback from your sales and service reps. This will provide ongoing qualitative and quantitative VOC guidance. Synchronize media with laser precision. Re-conceive Inbound as a high value customer interface:

156. However, what they frequently encounter are human robots! Customers have become conditioned to poor service. High Value Inbound Calls

157. What does it cost you in marketing and promotion dollars to generate an Inbound call? What do your customers experience when they call your 800#? High Value Inbound Calls

158. Inbound as a High Value Experience

159. 5 Principles of IDM Customer Lifecycle Marketing: Communications must be deployed at appropriate points in the buying cycle. Contacts should be driven by Opt-In preferences.

160. Pre–Sale VOC-driven integrated multichannel contacts. Must gather Opt-In preferences. CUSTOMER LIFECYCLE MARKETING Three Key Phases of the Customer Lifecycle:

161. Sale: Not a “close”. Instead, the beginning of proactive , value based relationship development. Three Key Phases of the Customer Lifecycle: CUSTOMER LIFECYCLE MARKETING

162. Growth and Retention: Requires ongoing proactive engagement , i.e., “How can we better serve you?” Ongoing value-added justifies price premium. Proactive generation of repeat sales. Three Key Phases of the Customer Lifecycle: CUSTOMER LIFECYCLE MARKETING

163. Customer Lifecycle Marketing Retention: Frequently overlooked. Too much focus on acquisition. Analyze reasons for your churn / inactive rates: Customer demographic may not be a good fit. Industry. Your Sales Reps. Lack of proactive marketing .

164. Customer Lifecycle Marketing Customer retention: Analyze high revenue / profit potential accounts. Are you providing true value? Do you really know what they do and how they use your products? Are they being serviced by all your channels?

165. Customer Lifecycle Marketing Market Segmentation Are you investing enough in your customers? © 2011 Ernan Roman Direct Marketing Marketing Investment Top Producing Customers Good Customers Dormant Customers & Qualified Prospects Suspects

166. Shared Set of Resources to Drive Customer Centricity at Scale: Business Insights Newsletter Microsoft Business Resource Center Digital Scale 1:1 High Touch Stratified Touches Aligning value & investment Tier 1 Tele-Driven/ Email Supported Email-Driven Tier 3 Limited Tele/Email Supported Tier 2

167. HMS NATIONAL, INC. REDEFINING THE CUSTOMER EXPERIENCE ACROSS MULTIPLE CHANNELS PER THE VOICE OF THE CUSTOMER

168. Doug Stein President HMS National, Inc. Mr. Stein was a distinguished Fortune 500 consultant for Accenture in the 1990’s. There he helped manage some of the firm’s most prominent projects while also being key to the development of significant corporate solutions and industry offerings that notably increased market share and profit for the world’s largest consulting firm. In his current position, Doug is the senior executive at HMS National responsible for developing and delivering innovative growth strategies in a historically mature and commoditized industry. He sits on two industry boards and was recently selected as an honoree by the South Florida Business Journal for their “40 under 40” awards. [email_address] www.hmsnational.com Presenters

169. Background 31 year old privately held company. Market and sell home warranties through real estate agents. Use direct marketing to renew home warranties when the one year contract, initiated during purchase of the home, is approaching expiration.

170. Background A home warranty helps homeowners avoid unexpected home repairs which are often expensive. The warranty provides coverage against mechanical failures for many major systems and appliances, coverage that is not provided by most homeowners' insurance policies. The term of the warranty is typically one year.

171. Background Traditionally, Home Warranties cover many systems and appliances, including: Air Conditioning and Heating Systems Refrigerators Water Heaters Washers / Dryers Ovens / Ranges Electrical Systems Etc.

172. Goals of the VOC Significantly improve renewal rates. Improve the customer experience across channels.

173. 3-Step Marketing Process: Know Much More About Our Customer’s Needs. . . And Use This to Drive Our Marketing. Establish Meaningful Opt-In Preference-Based Relationships. Deploy Our Multichannel Mix Per Opt-In Preferences.

174. Know Much More About Our Customer’s Needs … and Use This to Drive Our Marketing 3-Step Marketing Process Step 1

175. VOC Research Research Objectives: Stimulate greater renewal rates Identify what home warranty means to customers Determine how customers define the value of HMS Evaluate claim experiences: strengths and weaknesses

176. VOC Research Research Objectives: Measure level of satisfaction with HMS Analyze perception of marketing communications Gain insights into product enhancements Determine willingness to opt-in and self-profile preferences to drive targeted communications.

177. VOC Research Research Sample: Customers Who Renewed Customers Who Did Not Renew Segments: Home Buyers Who Purchased Home Warranty Home Sellers Who Purchased Home Warranty Filed Claim / Did Not File Claim.

178. VOC Research VOC Learnings: Regardless of who purchased the warranty, i.e., Home Seller or Home Buyer, engagement is low The customer experience , not just the amount of claims paid, significantly impacts renewal behavior Real estate agents often drive the customer’s perception of the value of renewing.

179. VOC Research VOC Learnings: Customers often calculate the value of the warranty if they consider renewing Service enhancement opportunities identified : focus on the end-to-end customer experience Customers expect HMS to be proactive throughout the claims handling process Customers are receptive to self-profiling their interests and preferences.

180. Establish Meaningful Opt-In Preference-Based Relationships Step 2 3-Step Marketing Process Step 2

181. Opting-In Customers are willing to share information regarding their homes, interests and preferences if this is used in a valuable and respectful manner. Customers can understand the value they will receive from populating the opt-in database with their preference information.

182. Opting-In Customers expect that this information will be used to drive relevant and personally useful information. Preferred communications include: Maintenance Tips Newsletters.

183. Deploy Our Multichannel Mix Per Opt-In Preferences 3-Step Marketing Process Step 3

184. VOC Driven Strategies VOC learnings helped develop more effective strategies for: How to engage customers throughout the customer lifecycle including during the renewal process e.g. telemarketing, direct marketing, auto renewal Which products to offer e.g. cross-sell or up-sell What additional information to offer regarding home repair and maintenance. Phased implementation began in 2009, and a major phase was just implemented in Q2 2011.

185. Implementation Per VOC Research Pre-VOC, our initial touch point with our customers was informational without being engaging Previous fulfillment kit: transactional delivery of warranty documents

186. Implementation Per VOC Research Pre-VOC, the initial customer touch point was informational without being engaging (con’t) T&Cs made up bulk of the initial customer touch point (Truncated 1st page)

187. Post-VOC we are leveraging this early touch point to immediately engage each customer Implementation Per VOC Research Added Personalization New Tonality Focused on Engaging Customer

188. To successfully engage customers, several elements are incorporated from VOC learnings Implementation Per VOC Research Welcome Page

189. Implementation Per VOC Research Customer engagement through a relationship oriented call Pre-VOC, multi-touch renewal process was direct mail driven In the VOC, customers shared their openness to and need for dialogue with us Post-VOC, we piloted service-oriented TM with focus on certain segments and the results were as positive as the VOC projected

190. Implementation Per VOC Research Customer engagement through a relationship oriented call (con’t) The VOC has enabled multi-channel marketing that is driving incremental sales The cost of telemarketing is several times higher than direct mail, but the incremental sales offset the expense and optimize profitability Noteworthy results from the calling initiative – a 20% increase in renewal rates was quickly realized, with far greater lift in certain segments

191. Having reengineered our upfront customer touch point and integrated a relationship oriented call, we embarked on the overhaul of the renewal solicitation stream overall Driven by VOC input, we created a integrated multi-media solicitation process that specifically delivered the customized information that we knew to be key to a customer’s decision Implementation Per VOC Research

192. Implementation Per VOC Research We created and included valuable content. This was not defined by us. It was defined by our customers and prospects.

193. Implementation Per VOC Research The new solicitation stream includes direct mail, although it is now utilized in a variety of ways Additionally, telesales and email are integrated into the marketing mix, with focus on certain segments All components are customized to a customer’s experience The solicitation process was architected with precise time triggers to optimize synergy between various media

194. The Results! The first ninety days of results from our program are impressive. We have achieved over a 25% increase in conversion rates! The results in some markets are nearly twice the average. Even better…these notable results are from our initial rollout. Now we will begin the art and science of testing and refinement to further these increases.

195. VOC #2 – B2B (More Insight Into Our VOC Journey) As a next step along the VOC journey, HMS implemented VOC research for its sales channel: real estate professionals. This was a logical next step to understanding the entire B2B and B2C process

196. VOC #2 – B2B Research Objectives were to Determine: Real estate agent’s awareness of home warranty Perception of the value / lack of value of home warranty Level of understanding of home warranty coverage Understanding of the value of home warranty as a renewable product (as identified in VOC #1)

197. VOC #2 – B2B Research Objectives were to Determine: Strengths and weaknesses of the relationship with HMS Obstacles the Agent has to overcome in offering home warranty to the consumer Strengths / weaknesses of HMS sales efforts and marketing communications Viability of new product offerings.

198. VOC #2 – B2B Findings, Implementation and Results Findings and recommendations completed in 2008 Implementation efforts began in 2009 Informed new sales strategy and redefined priorities Specified guidelines for point of sale print material and video presentation A breadth of results have been achieved, these include having a highly motivated sales team in a down-market due to best-in-class sales tools that are driving response, and closing large deals due to the strategic and customer-centric approach that HMS exemplifies.

199. Post-B2C VOC The Good Improved the effectiveness of marketing and customer service efforts by providing a roadmap for how to meet customer’s expectations as defined by the customer Re-think product offers and marketing so they provide greater value as defined by the voice of the customer Gained knowledge regarding which improvements will be valued and which will be superfluous.

200. Post-B2C VOC The Good In addition to learning ‘what’ to change to improve results, we also gained in-depth guidance regarding ‘how’ to make those improvements Customer engagement messaging in upfront sales collateral Relationship oriented Renewal offerings and touch points Customer service refinements.

201. Post-B2C VOC The Good Increased value and effectiveness of communications due to Relationship Engagement focus Customer receptiveness to personalized communications Effectiveness of engaging, rather than transactional mail Increased effectiveness of mail as part of an integrated multi-channel, multi-touch engagement strategy

202. Post-B2C VOC The Challenging Need to balance the relationship enhancements that may drive renewals with the offset of potential additional claims losses Regardless of our new knowledge about what and where to make improvements in the upfront sale, our sales channel is independent and therefore changes and enhancements happen slowly

203. Post-B2C VOC The Challenging Organizational inertia is hard to overcome for all companies, especially those that have been successfully executing a model for many years… so change takes work – hard work.

204. Multichannel Marketing Self-Check Optimal deployment of media should be driven by VOC learnings to ensure both relevance and effectiveness. Key elements of the multichannel mix must be deployed according to the individual Opt-In preferences of customers and prospects. The multichannel mix must provide customers and / or prospects with choices so they can communicate with the marketer via the media mix of their choice . The mix must meet requirements 1 through 3 above, per the timing and frequency determined by individual’s Opt-In preferences. The mix must offer a completely integrated experience . All the media must compliment each other, support each other, and send coordinated messages to customers and prospects. The medial mix must be responsive. If the organization alienates or abuses a consumer, they can expect to hear about it in a very public forum.

205. Right message. Right time. Right person. Delivered per that individual’s media preferences. Without #4, we have achieved: integrated, multichannel irritation ! Achieve Relevance

206. 1. Voice of Customer Relationship Research Specialized depth research to understand customer/prospect needs, decision making process and expectations of the optimal experience via web, social media/community, email, offline media and customer service call centers. These insights enable development of customer driven Relationship Marketing Strategies and Action Plans. 5 Step VOC-Driven Relationship Marketing Process

207. Your Top 3 Takeaways? 1. 2. 3.

208. How to Deliver Strong Customer Service, (This is a Marketing Responsibility!) Step 4

209. 5 Step VOC-Driven Relationship Marketing Process VOC RESEARCH Step 1 OPT-IN ENGAGEMENT Step 2 VOC RESEARCH Step 1 MULTICHANNEL MARKETING Step 3 VOC RESEARCH Step 1 HI-VALUE SERVICE Step 4 VOC RESEARCH Step 1

210. “ The penalty for not listening to the customer today is a lot steeper than it was in years past; similarly, the penalty for service failures becomes steeper in a social media environment with more impact to your brand.” John Hunter, Chief Operating Officer, QVC

211. Companies Lose 50% of Customers Every 5 Years!

212. . . . Particularly Because Relationships Do Not Extend Past the Initial Sale. (Dow Jones Interactive)

213. Tony Hsieh , CEO of Zappos, built a billion-dollar business in less than 10 years. Looking at every one of our interactions through a branding lens instead of an expense-minimizing lens means that we run our call center very differently from others: We…want our reps to...develop a personal emotional connection with each customer... Usually when marketing departments do their ROI calculations, they assume that the lifetime value of a customer is fixed. We view it as something that can grow if we create positive emotional associations with our brand.

214. Since Howard Schultz resumed the reins of Starbucks 2 years ago, he's taken the company from a 50% decline in operating income and share price to delivering its best financial results in company history. The equity of the brand is defined by the quality of the coffee but also, most importantly, by the relationship that the barista has with the customer and whether or not the customer feels valued, appreciated, and respected...

215. Vital Statistics 68 percent of customer defection takes place because customers feel poorly treated. Source: www.CustomerServiceManager.com 91 percent of unhappy customers will not willingly do business with you again. 70 percent of complaining customers will do business with you again if you resolve the complaint in their favor. 95 percent of complaining customers will do business with you again if you resolve the complaint instantly. Source: Lee Resources, Inc. A typical business hears from only about 4 percent of its dissatisfied customers. 96 percent simply go away without complaining. Of those, 91 percent will never come back. Source: Ruby Newell-Legner, “Understanding Customers”

219. Results of ERDM’s Customer Service Call Center Research 66% rated their recent Customer Service Call Center experience as negative or neutral.

220. Bad Customer Service Call Center experiences negatively affect customers’: Willingness to buy from that company: 86%. Perception of that company: 99%. Likelihood to recommend the company: 92%.

221. The good news: Excellent Customer Service Call Center experiences positively affect customers’: Willingness to buy from that company: 80%. Perception of that company: 94%. Likelihood to recommend the company: 81%.

222. Outsourcing Customer Service Call Centers has a negative / neutral impact; either in the U.S. or offshore. Negative to neutral impact when the Customer Service Call Center is: Located offshore: 78%. Outsourced in the U.S.: 79%.

223. Customers are clear about what makes for a good Customer Service Call Center experience. 60%+ want: An easy menu with minimum clutter to reach the right rep: 63%. A rep who understands their needs: 65%. A rep that speaks clearly and is easy to understand: 62%. 67% want their issue handled in a single call.

224. Service Quality Metrics to Drive Continuous Improvement

225. Service Quality Metrics* 1. What is the optimum average abandon rate? Answer: 2% or less. 2. What is the optimum average speed of answer? Answer: 80% of calls within 30 to 40 seconds.

226. 3. What is the maximum annual turnover rate for CSR’s? Answer: 10% to 20%. 4. What is the ideal call monitoring rate per CSR? Answer: 40 calls per month. 5. What is the optimum response time for an e-mail inquiry? Answer: 4 hours.

227. 6. Within how many contacts should you be able to resolve a customer service issue? Answer: One. 7. What is the optimum Web self-service rate? Answer: 90% to 100%.

228. 8. Where should you place live chat links? Answer: Home Page Product Pages Order Pages. 9. What is the optimum response time for a live chat inquiry? Answer: 15 to 30 seconds.

229. 1. Voice of Customer Relationship Research Specialized depth research to understand customer/prospect needs, decision making process and expectations of the optimal experience via web, social media/community, email, offline media and customer service call centers. These insights enable development of customer driven Relationship Marketing Strategies and Action Plans. 5 Step VOC-Driven Relationship Marketing Process

230. 4. Customer Service Customer service is a competitive differentiator and drives repeat purchases. It is not an “Operations” and “Cost” line item. It is a Revenue driver! 5 Step VOC-Driven Relationship Marketing Process

231. Your Top 3 Takeaways? 1. 2. 3.

232. Part V: Topic How to Increase the Power of Your Online Experiences by 9X. Drawing for 2 Autographed Books:

233. How to Increase the Power Of Your Online Experiences by 9X Step 5

234. 5 Step VOC-Driven Relationship Marketing Process VOC RESEARCH Step 1 OPT-IN ENGAGEMENT Step 2 VOC RESEARCH Step 1 MULTICHANNEL MARKETING Step 3 VOC RESEARCH Step 1 HI-VALUE SERVICE Step 4 VOC RESEARCH Step 1 SOCIAL MEDIA Step 5 VOC RESEARCH Step 1

236. Bad news: Social / digital media are not “ the answer”… They will not make it all better!

237. Unless we learn how to engage per customer’s preferences and expectations… the addition of social and digital media will only result in multimedia irritation.

238. Granted… we will have new and improved multimedia irritation… But the end result will still be the same consumer alienation.

239. In this section we’ll: Provide you with 8 VOC-based Digital Media Takeaways. Review best-in-class case studies, including: Amex OPEN ideeli 8 VOC-Based Digital Media Takeaways

240. Per VOC, Insatiable Hunger for Multichannel Information Which Consumers Manage: Consumers have shifted from being passive recipients of “push” marketing to creating and managing information networks from selected, value added multichannel sources. Opportunity: How do you gain entry into their online and off-line worlds ? Takeaway 1

241. 1,281,182 Blogs!

243. Per VOC, You Must Think Multichannel / Multimedia: “ I take pride in being a smart shopper. I might see something on TV, or hear an ad on the radio. I’ll text some of my fellow Frugal Mom$ friends to check it out. Then I’ll browse the web site. If the item interests me, I’ll put it in my cart. When I’m finished browsing, I’ll print out the cart and call customer service to place the order and have them answer any questions.” Takeaway 2

244. “… multichannel customers spend two to three times more than single-channel shoppers. … consumers who engage with the company across three or more channels spend six times more than the average consumer.” - Glen Senk, CEO, Urban Outfitters 1to1 Media, 2-14-11

245. Consumers Want Voice of Customer-Driven Relationships: Where marketers trust the needs and wisdom of customers to drive: engagement, communications, offers, and customer experience across all points and channels. This quality of VOC-driven engagement goes straight to the bottom line. Has been proven to achieve consistent double-digit increases in response and revenue. Takeaway 3

248. After listening carefully to all your feedback, we’ve come up with a new and improved shipping-and-returns policy that I think you’re going to love. Here’s an overview of the changes we’ve made:

249. If they trust the marketer and see a useful value proposition, people will Opt-In and self-profile significant amounts of information. Per VOC, Consumers Want Reciprocity of Value: Consumers recognize that in order to receive or access increasingly relevant information, they must share increasing amounts of information regarding their preferences. Takeaway 4

250. Reciprocity of Value equation: marketers provide increasingly relevant information and offers based on increasingly detailed Opt-In preferences provided by customers and prospects. E-Harmony: questionnaire asks 436 questions. Microsoft’s VOC-driven Relationship Marketing program (Business Resource Center) requests answers to 14+ detailed business questions in order to deliver targeted and relevant information / education.

251. Results: Microsoft Opt-in rates up to 95% . Open rates greater than 50%. Response rates performing in the double-digits. Volume license revenue from those in the VOC-driven program is 2X greater than the control group. Recent VOC Learnings

252. Per VOC research: The three dimensions of experience, in order of importance: Provide access to peers , for the most trusted information. Provide access to relevant subject matter experts. Provide easier and faster access to the corporation . Per, VOC, Consumers Want A Three-Dimensional Website Experiences: Websites must now provide a three-dimensional experience that engages the customer and abandons the current one-dimensional, corporate, “me”-oriented Web experience. Takeaway 5

253. Customers and prospects are consistently disappointed by their web experiences. Reasons for dissatisfaction include: Their expectation of the company “brand experience” is missing from the web experience, thus creating an uncomfortable disconnect. Frustration that they cannot “connect” with the company on the web site due to the impersonal / transactional / generic experience.

254. Lack of meaningful personalization which further fuels alienation. Expectation that customer-oriented web experiences will allow for Opt-In profiling to indicate their preferences. Lack of usage of their Opt-In preferences to drive targeted, relevant follow-up email communications and offers.

255. Powerful recommendations from customers: “ Make your site a destination I want to return to!” “ Make your site fun!” Easy access to content, with few clicks. Make it easy to share content, i.e.. Facebook, LinkedIn and Twitter. Make it easy to engage via mobile. Feature blogs and communities. Make it a visual experience.

256. Let’s take a look at the site voted #1 among “10 Great B-to-B Sites” in the 9/19/11 issue of B-to-B Magazine. American Express OPEN Forum www.openforum.com

259. Easy Access

260. Share

261. Mobile

262. Blogs

263. Community

264. Making Connections

265. Let’s take a look at another effective website. NIKEiD www.nikeid.com

270. VOC-Based Social Media Overview: Success is achieved as the result of a series of personal conversations, and points of engagement with consumers and prospects. Social media tools represent not a means for direct selling but a means for creating or improving relationships with consumers. Selling becomes a by-product of the quality and mutual benefit of those relationships. Takeaway 6

271. Per IBM's 2010 CEO Study: “57 percent of companies that have invested in social business tools have outperformed their peers, citing collaboration as having a direct impact on their organization's growth.”

272. 3 Unmistakable attributes: Power Speed Volatility.

273. The Power Ford’s Fiesta Movement Scorecard. 4.5 million YouTube views. 3.5 million Twitter impressions. 80,000 “hand raisers” who asked to be kept up to date on the U.S. launch of the Fiesta, 97 percent of whom did not own a Ford vehicle. 1,000 people who reserved a Fiesta online (informally, with no purchase commitment). 37 percent Fiesta brand awareness among Generation Y members, roughly equal to the awareness levels of the traditionally promoted Fusion and Flex models.

274. The Speed AmieStreet.com, one of the hottest on-line music start-ups: Discovered by “TechCrunch”: influential blog which raved about their strategies. Within 24 hours, this article triggered over 1,200 positive blog postings.

275. United Breaks Guitars United Airlines damaged Dave Carroll’s Taylor guitar through mistreatment by baggage handlers. Dave spent over 9 months trying to get United to pay for damages. During his final exchange with the United customer relationship manager, he said that he was left with no choice but to create a music video. Manager responded “Good luck with that one, pal”. The Volatility

277. United Breaks Guitars… Results Dave’s original YouTube video received over 9 million hits. Only then, United attempted a settlement. Dave’s response, “Good luck with that one, pal.”

278. Twitter Fatigue? Or Irrelevance Fatigue? Recent research, has begun to reference Twitter Fatigue* Our view per VOC findings: “The real issue is “Irrelevance Fatigue” based on using old thinking to drive the deployment of new interactive media. Three questions to consider: How customized is your tweetstream to topics raised by individual users? Do you send untargeted messages without names of individual users? How often do you use Twitter to communicate with specific, named followers, one at a time? *Psych Central Blogs Takeaway 7

279. Recommendations: Twitter's strength lies in one-to-one exchanges with individuals who are having problems or want to share insights with your company. Don't use it as a platform for mass communication. Ensure 50% (or preferably more) of your tweets use "at signs" (this symbol: @) to have conversations with individual users. This means using Twitter to communicate with one user at a time. This is one of the best practices followed by companies like Comcast, Zappos, and Dell.

280. Major Milestone: “ Just last week, we had a pretty cool milestone at Facebook. For the first time ever, in a single day, we had half a billion people use Facebook.” Mark Zuckerberg, 9/22/11 Takeaway 8 Facebook

281. Facebook Stats: People: More than 800 million active users More than 50% of our active users log on to Facebook in any given day Average user has 130 friends Activity: There are over 900 million objects that people interact with (pages, groups, events and community pages) Average user is connected to 80 community pages, groups and events More than 2 billion posts are liked and commented on per day On average, more than 250 million photos are uploaded per day From the Facebook site, 9-25-11

282. Privacy Concerns: Marketers who disregard privacy concerns are causing damage! Per VOC, during the past 12 months, significant increase in consumer concerns about allowing companies access to their Facebook accounts.

283. Two consumer concerns about marketer’s misuse of personal information: Personal security and irrelevant information. Social responsibility: “I’m afraid my friends will think I am spamming them”.

284. ideeli.com

285. Presenter Tamara Rosenthal Executive Director, Brand Marketing ideeli Tamara Rosenthal is the executive director of brand marketing at ideeli, responsible for developing the company’s brand positioning, public relations, social media and editorial direction, as well as spearheading creative campaigns to enhance the high-growth ideeli business. She works closely with the ideeli merchandising team to create innovative brand partner marketing programs and forge key partnerships across the fashion, media and retail industries. Prior to joining ideeli, Tamara’s career spanned the fashion and e-commerce industries, including senior level positions at Ferragamo, Vogue, Lacoste and asmallworld.net . While serving as vice president of marketing at Lacoste, Tamara was recognized as one of the “Top Women in Business” by PINK Magazine and credited in Brandweek for being instrumental in freshening the “LACOSTE Look.” A native New Yorker, Tamara is married, with two children. She is a graduate of the Columbia Business School with a M.B.A. in marketing. [email_address] www.ideeli.com

287. What is ideeli? online retailer specializing in limited-time sales, featuring fashion for women, men and children, home décor and travel launched in June 2007 based in New York City 225+ employees

288. Who we reach Demographics Female 96% Average age 36 College degree 86% Average HHI $107K Top DMAs 58% (NY,CA, PA, CD, TX, MA, FL, IL) Engagement 4.7 million+ members 160,000+ Facebook likes 25,000+ Twitter followers 2,800+ brand partners

289. reaching + keeping our core customer our recipe for growth and success: the ideeli blend of commerce and content our strategy embraces three elements to make this work: be new be relevant be differentiated what does that really mean?

290. reaching + keeping our core customer new – keeping our site and our customer experience fresh and distinctive relevant – offering the right products for our audience differentiated – being unique in an increasingly crowded retail marketplace

291. differentiated: reaching special-size shoppers Fall 2010: we noticed an increase in Voice of Customer via Facebook and Twitter for more plus-size options

292. differentiated: reaching special-size shoppers created first Plus Size Perfection sale within the resonated with customers: exceeded sales plan by 57%

293. differentiated: reaching special-size shoppers Plus Size sale is now a biweekly event that generates significant revenue ideeli is the first limited-time sale site with a dedicated program for special sizes Petite Perfection sale as well

294. differentiated: reaching special-size shoppers Facebook: Over 250,000 impressions to date on plus-size content Twitter: conversations using #plussize made nearly 2 million impressions

296. relevant: seeking the shoe-obsessed ideeli members are obsessed with shoes shoe content + commerce is incredibly relevant for our members shoe content gets 47% more Facebook impressions than non-shoe posts according to a survey, members buy 10-12 pairs per year; overwhelming survey response with over 10,000 responses in less than 48 hours

297. “ More shoes. Period.” Source: 4Q 2010 ideeli buyer surveys

298. relevant: seeking the shoe-obsessed

299. relevant: seeking the shoe-obsessed answered demand ideeli shoes tab on Facebook, providing fun editorial content, as well as access to ideeli shoe sales

300. relevant: seeking the shoe-obsessed ran two shoe-themed giveaways on Facebook over four weeks; 70% gain in followers held Shoetopia week of shoe sales on ideeli, biggest shoe events ever; exceeded previous best by 73%

301. new: the pleasure of discovery

302. how we capture VOC social media: Facebook and Twitter surveys: on-site, email and phone customer service: proactive shopping assistance customer analytics: utilizing customer behavior data to tailor on-site experience

303. customer engagement: what’s next evolving: constantly testing new customer experience and interface to meet customer needs and preferences expanding how we capture VOC: loyalty programs for top customers deeper qualitative as well as quantitative research mobile and Facebook commerce personalizing: future emails and site interactions will be tailored to reflect shopper interests and past purchases— while still facilitating pleasure of discovering new brands

305. Your Top 3 Takeaways? 1. 2. 3.

306. 1. Voice of Customer Relationship Research Specialized depth research to understand customer/prospect needs, decision making process and expectations of the optimal experience via web, social media/community, email, offline media and customer service call centers. These insights enable development of customer driven Relationship Marketing Strategies and Action Plans. 5 Step VOC-Driven Relationship Marketing Process

307. 4. Customer Service Customer service is a competitive differentiator and drives repeat purchases. It is not an “Operations” and “Cost” line item. It is a Revenue driver! 5 Step VOC-Driven Relationship Marketing Process

308. Additional Information for Participants: 14 Step Checklist for Breakthrough Socially Responsible Multichannel Opt-In Marketing 7 Marketing Mistakes You Need to Avoid Case studies Power Point

309. Contact Info: Ernan Roman President Ernan Roman Direct Marketing 718-225-4151 [email_address] Rich Bonfiglio Sr. Dir., Marketing Operations MSC Industrial Direct (516) 812-1475 [email_address] Eric Greenberg EVP Marketing Life Line Screening 425-722-6794 [email_address] Tamara Rosenthal Exec. Dir., Brand Marketing ideeli 646-442-2464 [email_address] Doug Stein President HMS 425-722-6794 [email_address]

310. Achieving True Customer Engagement: The 5-Step Process for Increasing Sales 10 – 35%