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J.D. Power | Presentation | © 2013 J.D. Power and Associates, McGraw Hill Financial. All Rights Reserved. CONFIDENTIAL & PROPRIETARY—For Internal Use.

Overview

June 2013

Kirk Parsons, Senior Director, U.S. Telecom

Adrian Chung, Director, Canadian Telecom

Achieving Wireless Retail Excellence

1J.D. Power | Presentation | © 2013 J.D. Power and Associates, McGraw Hill Financial. All Rights Reserved. CONFIDENTIAL & PROPRIETARY—For Internal Use.

Agenda

• The Financial Impact of Retail CSI

• Best Practices to Achieve Retail Excellence

• Recognizing Performance

• Question and Answers


Challenges Facing Wireless Retailers

Corporate Retail Operations

Retail Store Manager Regional Marketing Operations

Regional Retail Operations

I need a way to differentiate my

brand from the competition,

attract new customers, and

reduce customer churn

I need a way to provide a

consistent customer experience

across the retail chain and

increase store traffic

I need a way to recognize our

brands commitment to customer

satisfaction, reinforce a positive

brand image, and drive interest in

our products/services

I need a way to differentiate my retail

store location, validate/implement

retail store best practices, and

increase avg. revenue per customer

and store traffic


The Financial Impact of Getting It Wrong

The Potential Revenue Impact of a Poor Retail Experience is Significant

<Carrier> Subscriber Base (as of Q4 2012): 107 M

Net adds in 2012 3.8 M

Visit Retail Store for Purchase* Past 6 Months: 63% = 2.7 M

% Unsatisfied (Rate Carrier 1-5 on Overall

Sales Satisfaction) and “Def/Prob.” will

Churn Away From Carrier*: 39% = 1.05 M

Monthly ARPU** (Wireless): $64.98

Potential Loss of Revenue per Year: $68.4 M

*Based on those who report making a transaction between July ’12-December ’12

** Q4 2012 reported ARPU


Value of Getting It Right

• Motivate Employees

• Improve the Customer

Experience

• Improve Individual Store

Performance

• Achieve Performance

Consistency Across Retail

Chain

• Attain Market

Differentiation

• Positive ROI


The Economic Value of Service Excellence

• Lower incremental cost

• Higher incremental revenue

CSIROI

Lower Incremental Cost

Lower Customer

Acquisition Costs

+Lower

Problem Resolution

Costs

Higher Incremental Revenue

Higher TotalSales

+Higher Price

Premiums

+

Incremental Investment in

Customer Satisfaction

+Higher

Incremental

Spend

=


The Economic Value of Service Excellence (Cont.)

80%Definitely Will

Return to Store

Driving Loyalty

U.S

.C

an

ad

a

79%Definitely Will

Recommend Store

Creating Advocates

78%Definitely Will

Return to Store

77%Definitely Will

Recommend Store

• Providing an exceptional retail customer experience has significant ROI implications

Source: 2013 Canadian Wireless TOE and U.S. Wireless Purchase Experience Studies


The Economic Value of Service Excellence (Cont.)

66%Require Customer

Service Contacts

(Past 6 Months)

82(months)

Tenure with

Current Carrier

(Months)

51%Prob./Def. Will Use

Carrier for Addt’l Services

Lower Overhead Long-term Customers

Product Penetration1

Source: 2013 V1 Wireless Purchase Experience (U.S.), 1 – 2013 Canadian Wireless TOE Study


Wireless Retail Best Practices


Three Components for Achieving Wireless Retail

Excellence

• Outstanding sales

interaction

• Increasing sales

revenue per customer

• Achieving consistent

performance across

the retail network Increasing Sales

Revenue per Customer

Outstanding

Sales Interaction

Achieving Consistent

Performance Across

the Retail Network


Best Practice 1: Outstanding Sales Interaction

• Promptness of Rep

• Rep Courtesy

• Rep Knowledge

• Rep Empathy


Walk-in Purchase Timing Carrier A B C D

Time to be greeted (Min.) 1:57 1:41 2:03 1:36

Time to speak with a sales

rep (Min.)5:55 6:43 5:51 6:36

Walk-in Purchase

ComplianceCarrier A B C D

% Were met by personal

greeter76% 74% 66% 78%

Best Practice 1: How Companies Perform

109

Purchase Index – Example

Promptness of Rep

Source: 2013 U.S. Wireless Purchase Experience Study Vol. 1Current industry range

Opportunity for the industry to improve overall

customer satisfaction by standardizing this

practice in their retail stores


Best Practice 1: How Companies Perform (Cont’d)

Rep Courtesy

Purchase Index – Example

181

Although a common

practice, the

consequences of not

thanking a customer

for their business is

significant

In-Store Purchase Compliance U.S. Carrier Avg. Canadian Carrier Avg.

% Rep Thanked Customer 92% 84%


Best Practice 2: Increasing Sales Revenue/Customer

Exceeding Customer

Expectations


Key Diagnostic AreasSatisfied

(10-8)

Not Satisfied

(7-1)Difference

% Likely to recommend retail store

(Definitely/Probably Will)94% 67% 27%

% Would visit store again

(Definitely/Probably Will)94% 75% 19%

Intent to switch from service carrier

(Definitely/Probably Will)8% 20% -12%

Best Practice 2: How Companies Perform

Exceeding customer

expectations increases

brand advocacy and loyalty

Exceeding Customer Expectations


Best Practice 2: How Companies Perform (Cont’d)

• Customers who are Satisfied with their Purchase Spend More Per Month and Subscribe to Premium Services

= Significantly ABOVE Industry Average at 95%

Confidence Level.

= Significantly BELOW Industry Average at 95%

Confidence Level.

Source: 2013 U.S. Wireless Purchase Experience, Vol. 1

10 - "Highly

Satisfied"

8 Thru 9 -

"Satisfied"

5 Thru 7

"Indifferent"

1 Thru 4

"Dissatisfied"

Monthly Spending $149 $143 $140 $136

Service Plan Minutes 965 895 876 823

% With Data Plan 81% 81% 79% 82%

% With International Coverage 21% 18% 15% 15%

% With Mobile Broadband 5% 4% 4% 5%

% With Data Plan for Tablet 9% 4% 4% 6%

Satisfaction with Purchase Experience - In Store


Wireless Retail Certification Program


Wireless Retail Certification Program At-A-Glance

Research

Certification

Recognition


Wireless Retail Certification Program

Aggregate

Results

Administer

Customer Phone

Survey

CUSTOMER CONFIRMATION PHASE – J.D. POWER SURVEY:Outline

Improvement

Opportunities

Proceed to Criteria

Compliance Phase

Certification

Achieved

CRITERIA COMPLIANCE PHASE:

Stores Complete

Criteria Checklist &

Submit Data

Revise Processes/

Documentation

(1 Opportunity)

Aggregate

Results

CUSTOMER CONFIRMATION PHASE - CARRIER SURVEY OPTION:

Validate Carrier

Survey

Methodology

Carrier Revises Survey/Methodology or Utilizes J.D. Power Survey

Obtain Data

From Compliant

Retail Stores

Obtain Customer

Sample

Obtain Customer

Sample

NO

YES

YES

NO

YES

NO

Met or Exceeded

Performance

Benchmark?

Survey &

Methodology

Compliant?

Store

Processes &

Documents

Compliant?


Recognition

• Promote your operational excellence and customer-

centric focus recognition via the following:

Window Decal

In-store Signage

Business Cards

Sales Receipts


• Independent and un-biased

confirmation of quality

• Point of differentiation from

competitors (first-to-market provides

greatest advantage)

• Established reputation in providing

certification to best-in-class

organizations

• Proven value within retail channel

• Unaided awareness of the

J.D. Power brand by consumers

is 52%

– Aided awareness is at 72%

• Independent research confirms that

J.D. Power is:

– Trusted, Unbiased, Influential:

60% of consumers are more willing

to consider a product or service

based on a J.D. Power award

• Consumers will complete J.D. Power

surveys compared to others: 76% agree

Value of J.D. Power Recognition


Certification and Distinction Programs

• J.D. Power has proven

processes and extensive

experience providing

certification program

solutions across a variety

of industries

• Helps consumers and B2B

customers identify product

and service providers that

deliver an excellent

customer experience


Insurance Carrier―Top 15 in U.S. Net Premiums

• Business challenge: Improve the customer experience

• J.D. Power Solution: Distinguished Insurance Agency Program

Source: J.D. Power U.S. Auto Insurance StudySM

812

821

831

821

836

847

860

818

838 841

847

854 857

878

800

820

840

860

880

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Industry Average DIAP Par cipa ng Carrier


Case Study―Big 3 AutomoSve

• Business challenge: Improve the customer experience

• J.D. Power Solution: Performance Improvement Certification Program

focused on dealership and service assessment

Sources: J.D. Power Sales Satisfaction Index (SSI) StudySM

J.D. Power Customer Service Index (CSI) StudySM *Brand C was #1 in CSI during Years 4 and 5

750

800

850

900

950

Year 1 Year 2 Year 3 Year 4 Year 5

Sales Satisfaction Index (SSI)

Brand A Brand B Brand C

750

800

850

900

950

Year 1 Year 2 Year 3 Year 4* Year 5*

Customer Service Index (CSI)

Brand A Brand B Brand C


Clients of J.D. Power Branded Certification Programs,

Assessments, and Performance Improvement Initiatives


Questions?


For more information, contact:

Kirk ParsonsSenior Director, U.S. Telecom

[email protected] | 203-663-4120

Adrian ChungAccount Director, Canadian Telecom

[email protected] | 416-507-3257