Loving Your Customers Equally But Differently Janet Petersen Worldwide Senior Manager IC Layout & Verification Customer Support Division

JP, SSC BP Acct Mgt, November 2005 Confidental 2 About Electronic Design Automation (EDA) The Electronic Design Automation industry provides the design software used to create all of the world’s electronic systems. n n It is time-critical technology used to design the most complex system-on-chip (SoC) semiconductors & printed circuit boards. n n Mentor Graphics has been an EDA industry leader for two decades with annual revenues over $700 million.

JP, SSC BP Acct Mgt, November 2005 Confidental 3 n n Founded in 1981, headquartered in Wilsonville, Oregon n n World-class reach and development – 28 engineering sites worldwide n n 3,850 employees worldwide n n High-touch, global distribution channel – 48 sales offices around the world n n Strategic partnerships with leading electronics manufacturers, semiconductor and electronic design suppliers for development of new design solutions and methodologies About Mentor Graphics Corporation

JP, SSC BP Acct Mgt, November 2005 Confidental 4 n $250M+ in support revenue n 450+ support professionals worldwide n One unified global support tracking and knowledge management system n 14 support centers in 4 global regions - ALL SCP Certified About Customer Support Division

JP, SSC BP Acct Mgt, November 2005 Confidental 5 Customer Support: The Beginning….

JP, SSC BP Acct Mgt, November 2005 Confidental 6 n 1981 – 2000 — Remove all barriers between our customers and our technology — All customers receive the same excellent, reactive support regardless of need or how much business they do with us n September 1999 – Strategic Planning — Differentiated Services Segmentation Project — Make our Global Accounts willingly dependent on MGC product and services — Improve customer satisfaction by addressing our customer’s definition of “support” which is much more than excellent remedial telephone support. 5 STAR Support

JP, SSC BP Acct Mgt, November 2005 Confidental 7 GOAL P.O.S.T. GOAL: Address the needs of each customer segment profitably P: With the exception of “Global” customers, we supply the same level of service to all customers regardless of their needs or how much business they do with us. O: Develop offerings that meet each segment’s needs while achieving overall gross margin targets. S1: Invest heavily in the Global accounts, but keep the number of accounts small to contain overall impact to margin. — Example Tactic: Allow more consistent treatment of Global Accounts by leveraging our call tracking and entitlements systems S2: Increase self-service capabilities for Mass Market accounts. — Example Tactic: Invest in SupportNet

JP, SSC BP Acct Mgt, November 2005 Confidental 8 GOAL P.O.S.T. GOAL: Address the needs of each customer segment profitably (cont’d) S3: Reduce the need for support by influencing Product Divisions’ quality development processes, not just inspection. S4: Productize what we learn from Global accounts and offer to next tier accounts. S5: Project Focus: Develop a synchronized strategy for delivering differentiated support levels by customer segment. Define proactive support deliverables segment by segment and build into value statement

JP, SSC BP Acct Mgt, November 2005 Confidental 9 Customer Support: Today

JP, SSC BP Acct Mgt, November 2005 Confidental 10 CSD Foundation Vision: To remain the services leader in solving our customers’ design problems from anywhere to anywhere. Vision: To remain the services leader in solving our customers’ design problems from anywhere to anywhere. Mission: Eliminating the barriers between our customers and our technology. Mission: Eliminating the barriers between our customers and our technology. High Level Focus: Strengthen CSD’s role as a sales differentiator. We want Sales to feel they can lead with Support. Grow overall Mentor Graphics revenue and profitability. We must help Sales sell by driving adoption to optimize CSD revenue. High Level Focus: Strengthen CSD’s role as a sales differentiator. We want Sales to feel they can lead with Support. Grow overall Mentor Graphics revenue and profitability. We must help Sales sell by driving adoption to optimize CSD revenue.

JP, SSC BP Acct Mgt, November 2005 Confidental 11 Provide Proactive, Scalable, Differentiated Added-Value Services for our Largest Customers Expand Mentor’s Return with Differentiated Support

JP, SSC BP Acct Mgt, November 2005 Confidental 12 Top Account Support n Globals: — High relationship support n Global Support CAEs — Customized infrastructure n Strategic / Keys: — Aligned with region — Designated Accounts Support Managers n Regional / Focus: — Aligned with Support Sales — Proactive communication

JP, SSC BP Acct Mgt, November 2005 Confidental 13 Example of Proactive Support Deliverables

JP, SSC BP Acct Mgt, November 2005 Confidental 14 Sample Custom Web Site

JP, SSC BP Acct Mgt, November 2005 Confidental 15 Overall Customer Satisfaction – 2005/Q1 Globals vs. NA Strategics vs. Focus & Mass Market Focus & Mass Market Globals North America Strategics

JP, SSC BP Acct Mgt, November 2005 Confidental 16 Loyalty Measures – Globals vs. Non- Globals n All measures for Globals higher than other account categories, significantly higher than Mass Market.

JP, SSC BP Acct Mgt, November 2005 Confidental 17 Customer Distribution & Revenue Impact n Thousands of small customers represent only 3% of support revenue. n A few dozen massive customers demand & deserve special attention. n Hundreds of companies in between. Thousands of small companies with mass market products Lower % of revenue Higher % of revenue Several very large customers Customer Size / Revenue Impact Continuum Revenue Impact Customer Size

JP, SSC BP Acct Mgt, November 2005 Confidental 18 The Journey n Educate first n Earn trust, gain credibility n Build by delivering on time – the right answer n Deliver in small increments — Reports — Training — Lunch-n-learns — Webinars n Get them hooked Source: Are in Arial. 8 Point, Italic. Place in this location.

JP, SSC BP Acct Mgt, November 2005 Confidental 19 The Future… Tomorrow’s Challenges & Questions n n Measure ROI n n Customer satisfaction significantly higher than general customer base n n Become 6-STAR n n Make a North American operation truly global n n Grow technical skills beyond the customers n n Meet diverse needs of customers n n Know their flows n n Be on-site – everywhere (scalable?) n n Work while geographically dispersed as customers acquire and merge

JP, SSC BP Acct Mgt, November 2005 Confidental 20 “In the Information age, much of the wealth will be created by those who add layers of intangible capital on top of commoditized goods and services.” --William Davidow, Intel Corp.

JP, SSC BP Acct Mgt, November 2005 Confidental 21 Customer Support: Tomorrow….

JP, SSC BP Acct Mgt, November 2005 Confidental 22