1 05 Offering.ppt Market and Customer Management - Customer Loyalty 1. Programme offer Frequently asked questions: qWhat were the requirements for the offering? qHow does the offer look like? qWhich part of the offer influences which customer segment? qWhat about co-operations with other companies? qWhat are possible options for new offers after launch?   1 Offering 1 Offering 7 Finance 7 Finance 2 Processes 2 Processes 8 Communi- cation 8 Communi- cation 3 Call Center 3 Call Center 5 Information Technology 5 Information Technology 4 Cards 4 Cards Key topics of the programme Key topics of the programme 6 Structure 6 Structure

2 05 Offering.ppt Market and Customer Management - Customer Loyalty Requirements to the Offering Requirements from a customer point of view:  Benefits  Simplicity; Understandable  Transparency  others Requirements from a company‘s perspective point of view:  Attracting a broad amount of customers  Pushing additional sales, profitability and loyalty  Pushing cross selling/ up selling  Rising the image of the company  others Requirements from a market point of view:  Focusing on large market fields  Considering the competitor intensive market fields  Focusing on future market fields  No legal conflicts  others Requirements for the offering at launch time There are not just requirements from the internal optic but also requirements from the client and the business perspective to take into consideration. 1. Programme offer

3 05 Offering.ppt Market and Customer Management - Customer Loyalty The programme is based on a set of point collection and point redemption offers and includes also win back offers Special campaigns for point collection Special campaigns for point collection Ongoing point Collection Ongoing point Collection Ongoing Point Redemption Ongoing Point Redemption Point redemption with club partners Point redemption with club partners Club Membership Joining offer: Win back offer: 100 points per fix line 100 points per mobile telephone 100points per pager 100points per internet access 200points for member get member double points for calls to Italy during summer double points for international calls during Christmas others 1point per $ turnover 1 point extra per $ turnover if fix line and mobile 500 points when returning within 30 days 1point = 3 cents 3000points: Special mobile phone 5000free access for one year $ voucher for shop purchase 2500free friends and family programme <8000special agent of support 24h available others 2points for 1 frequent flyer mile 1000 points for one box of chocolate others Example Programme offer

4 05 Offering.ppt Market and Customer Management - Customer Loyalty The loyalty programme has one offering but targets four segments in different ways. Premium Customer (over US$ per month) Strategy: Identify customers, VIP concept, keep the customer happy, retention what ever the costs are, improve cross- and upselling whenever possible Most of the very attractive rewards for these customers within 1 year of point collection Premium customers can profit up to 8% Profitable Customer (between US$ per month) Strategy: Identify customers and make them loyal. Up- and cross selling Turnover per customer over the average, most of the very attractive rewards for these customers after 1.5 years of point collection. Profitable customers can profit between 3 - 7% Long collector (between US$ per month) Strategy: Focused cross selling incentives for enhancement of turnover Probably profitable customer now A very attractive reward can be reached, if the annual turnover is substantial growing and points are collected over a period of years Long collectors can profit between 2 - 6% Uninterested (between US$ per month) Barely profitable customers Strategy: No additional discounts / benefits Hardly reach enough points within one year for a redemption possibility (with exception off the first year). Substantial growth of turnover is needed to reach the very attractive redemption possibilities. Long collectors can profit between 0 - 3% Customer structure: 8% Premium customer 21% Profitable customer 31%Long collector 40% Uninterested Programme offer

5 05 Offering.ppt Market and Customer Management - Customer Loyalty Possible special offers in combination with the launch for the club programme Below you will find a set of ideas for the launch of a loyalty programme. This special offers should be attractive, especially for the target groups, and should reflect the main offering of the programme. Ideas for additional offers for the programme start of the Telco loyalty programme “Follow the wire” Travel around the world Videoconference with friends Breakfast with famous people Back-Stage tickets for concerts Free health check The golden button Free ticket for cinema Prepaid cards / special edition Painting of a famous painter Combination with Smart-Cards Balloon Trip Flight Tickets Starring in a TV commercial / soap opera Right for getting new products first Full telecommunication equipment Limited Card Editions Early Bird (z.B. Prepaid card for the first 10’000 customers) Programme offer

6 05 Offering.ppt Market and Customer Management - Customer Loyalty Depending on the structure of the offer, the reaction of the customer and the impact for the company will be different. customer Each component of the offer lead to different reaction of the customers. On the one hand, they can reduce their costs. On the other hand, the offer is influencing the usage and convenience of their products and services. From the view of the Telco, the different offers will have different customer reactions. On the one hand, customer loyalty may increase. On the other hand, the profitable customers can be paid more attention. The offer in this Case for practical implementation has a balanced structure and covers all effects. Cost Reduction for Customer More Customer Usage/ Con- venience Effect on Profitability Effect on Loyalty High Impact Low Impact High Impact Low Impact High Impact Low Impact High Impact Low Impact Joining offer Offers of partners for redemption Offers in the point of sale Club Card Leverage of benefits Member gets members Additional products for bundling Redemption with different offers Telco different offers different offers 1. Programme offer