1. Earning the Reputation You Want and Deserve Fred Crawford Managing Director AlixPartners, LLC 2005 Annual Conference Napa Valley, CA Implications of Reputation; How Intangibles Can Drive Performance and Build Strategic Advantage

2. Earning the Reputation You Want and Deserve What (positive) reputation do you want? How can it be achieved?

3. A Comprehensive Study: Consumer Relevancy Consumer Relevancy Study… Conducted in U.S. in late 1999 and February 2001, pan-European study in January 2002, Japanese study in 2003; US study repeated in 2005 Interviewed over 161,000 consumers Asked 60 questions about the importance of various aspects of the shopping experience Consumer Relevancy Study… Conducted in U.S. in late 1999 and February 2001, pan-European study in January 2002, Japanese study in 2003; US study repeated in 2005 Interviewed over 161,000 consumers Asked 60 questions about the importance of various aspects of the shopping experience …gets rave reviews New York Times, Business Week and Wall Street Journal best seller [Lafley, P&G] CR is the best tool…for incorporating customer wants and needs.” [Burandt, Georgia-Pacific] “…a big idea and blueprint for action.” [Smith, FEDEX] …exceptional strategic thinkers who have given anyone concerned about customers a practical, innovative and unique approach to competitive differentiation” …gets rave reviews New York Times, Business Week and Wall Street Journal best seller [Lafley, P&G] CR is the best tool…for incorporating customer wants and needs.” [Burandt, Georgia-Pacific] “…a big idea and blueprint for action.” [Smith, FEDEX] …exceptional strategic thinkers who have given anyone concerned about customers a practical, innovative and unique approach to competitive differentiation”

4. FACT: a very different customer… The Two Myths of Excellence That most businesses understand what customers are really asking for That attempting to be great on all aspects of customer engagement is the way to win

5. Three Mega Trends Informed and aware, but cynical and confused consumers “Clarify my options, allow me to feel satisfied with my choices” Proliferation of information and communication technologies Societal SituationHuman ConditionConsumer Need Societal devolution Increasing inability to keep pace with daily life Inability of traditional institutions to adequately reflect fundamental human values “Fortify, reinforce, ratify my personal value” Increase in stress, guilt, anxiety “Help me survive psychologically and emotionally” ….A Changing Need Set

6. Human Values Are Embedded in the Context of an Offering Maslow’s Hierarchy of Needs Source: Maslow, A. H., The Farther Reaches of Human Nature, 1968; CGE&Y Analysis “Today, technical differences between products are barely perceptible, which is the reason why context has become more and more important for brands.” – AG Lafley, Chairman, Procter & Gamble Self Actualization Esteem Love and belongingness (feeling loved and accepted by others) Safety, security Physiological Needs (air, water, food, sleep) Context = Human Values Content = Basic Needs

7. The Conceptual Model for Consumer Relevancy Trust is a substitute for perfect knowledge and the time to act on it. Level III Seek Level II Prefer Level I Trust Experience Price Product Service Access Solution Convenience Ease Intimacy Agentry Inspire Customize Care Consistency Reliable Educate Respect Honesty Credible Accommodate

8. The Second Myth of Excellence That attempting to be great on all aspects of consumer and customer engagement is the way to win A 5,4,3,3,3 profile/mix is optimal. Companies that try to be excellent in every attribute are either doomed to fail or leave significant money on the table A 5,4,3,3,3 profile/mix is optimal. Companies that try to be excellent in every attribute are either doomed to fail or leave significant money on the table Dominate Differentiate Parity Ideal Value Profile (as perceived by consumers) ILLUSTRATIVE

9. Consumer Relevancy Examples

10. Building the Desired Reputation Drives Different Operating Behaviors MarketingSales Manufacturing Supply HRStore Ops Agentry Inspire Customize Solution Intimacy Value Features Flexible Answers Comfort Standard Innovate Flexible Results Lifestyle Standard Quality Adaptive Extend Integrate Productivity Knowledge Transfer Satisfy Customers Problem Solved Leverage No Frills Test/Use Educate/ Personalize Comfort Facilitate Relationship Price Product Service Access Experience Cust. Svce Basic Inform Response Empower Custom IT Low Cost Innovation Customer Insight Knowledge Mgt Customer Interaction

11. Thank You!! Fred Crawford fcrawford@alixpartners.com