1. Optimization in the World of Marketing Neil Skilling

2. Strictly Portrait Software Confidential © 2009 Portrait Software Portrait: –“an up close and clear picture of a single person or individual” –1:1 –A True Relationship Traditional Marketing: –“uniform campaigns designed to attract an entire defined population” The Portrait Proposition: The Perpetual Portrait “Achieve a 1:1 relationship with your customers” “The Proposition” TMO, 31st October 2008Page 2

3. Strictly Portrait Software Confidential © 2009 Portrait Software Monday, June 01, 2015 Overview - page 3 Portrait Software at a Glance 300 enterprise customers worldwide Founded in 1986: 20+ years heritage in CRM innovation Recognised as leader by Gartner in Intelligent Dialogue Marketing Acquired Quadstone Analytics (2005) Acquired Oslo based Million Handshakes (2008) Main offices in UK, Oslo and Boston, USA Portrait Software International partner network

4. Strictly Portrait Software Confidential © 2009 Portrait Software TMO, 31st October 2008Overview - page 4 We have 300 enterprise customers worldwide

5. Strictly Portrait Software Confidential © 2009 Portrait Software Different types of Marketing Above the line –Brand building, awareness –Billboards, television, internet banners Strictly Portrait Software Confidentialpage 5 Below the line – targeted marketing Direct Mail Outbound calling Email etc B2C operations: Retail, Telecommunications & Financial Services predominate

6. Strictly Portrait Software Confidential © 2009 Portrait Software 6 Customers Value Customer Lifecycle Management Control costs: Increase revenues Reduce cost to serve Predict who to leave? Retain: Churn prediction Savability (offer ROI) Churn reasons drive messaging & processes Acquire: Target predicted high value, low Churn Avoid predicted high risk cases Nurture: Proactive retention Increase satisfaction Grow: Predict value/profit potential Cross-sell response to best next product TMO, 31st October 2008

7. Strictly Portrait Software Confidential © 2009 Portrait Software Core Idea of Targeted Marketing Goal: Maximize ROI on targeting spend Reducing attrition Increasing spend Decreasing losses Targets Customers action will be most effective in Targets III

8. Strictly Portrait Software Confidential © 2009 Portrait Software How is the model created? Human “makes up” rule Word Processor Human “makes up” rule by looking at data Segmentation, Profiling, Visualization Human uses software to build predictive model Modelling software Machine builds predictive model (“on-line”?) Automated or Real-Time Modelling software MADE UP MODELLED

9. Demonstration Strictly Portrait Software Confidentialpage 9

10. Strictly Portrait Software Confidential © 2009 Portrait Software Typical Gains Chart Strictly Portrait Software Confidentialpage 10

11. Strictly Portrait Software Confidential © 2009 Portrait Software Not much better than random... Strictly Portrait Software Confidentialpage 11

12. Strictly Portrait Software Confidential © 2009 Portrait Software Worse than random... Strictly Portrait Software Confidentialpage 12

13. Strictly Portrait Software Confidential © 2009 Portrait Software Measuring Success 1.Did my campaign go out of the door? 2.Did I send as many as I could? 3.Did I spend all of my budget? 4.How many responses did I get? 5.What was the value of those responses? 6.How much did it cost to generate those responses? 7.How many of my responses were incremental Strictly Portrait Software Confidentialpage 13

14. Strictly Portrait Software Confidential © 2009 Portrait Software How to Measure Campaign Success (Uplift) IQPC 24th November 2008 Uplift = Treated Responses – Control Responses Uplift can only be measured against a control group or background response rate Campaign profitability is measured from Uplift only not total responses What was the average cost per incremental response? Where did the Uplift come from? Can we target on Uplift only? Page 14

15. Strictly Portrait Software Confidential © 2009 Portrait Software Wanamaker’s Lament “I know half the money I spend on advertising is wasted, but I can never find out which half” – John Wanamaker IQPC 24th November 2008Investor briefing - page 15

16. Strictly Portrait Software Confidential © 2009 Portrait Software NoYes No Fundamental Segmentation for Retention PERSUADABLES SLEEPING DOGS  SURE THINGS  LOST CAUSES  LEAVE IF TREATED LEAVE IF NOT TREATED IQPC 24th November 2008Page 16

17. Strictly Portrait Software Confidential © 2009 Portrait Software Incremental Impact for Retention Sure Things Stay whether you treat or not Lost Causes Leave whether you treat or not 1 2A 2B 3 Persuadables : Only stay if treated Sleeping Dogs Stay unless you treat 2 No impactPositive impact Negative impact 123 IQPC 24th November 2008Page 17

18. Strictly Portrait Software Confidential © 2009 Portrait Software Case Study: Mobile Phone Retention I –Overall campaign reduces churn by 4.8 pc pt Positive impact Negative impact No impact –Targeting best 65% by ROI improves campaign ROI by 27 pc pts. –Targeting best 70% by Uplift reduces churn by 5.7% –Targeting 42% by Uplift also reduces churn by 4.8% Incremental value c. €1.75m p.a. IQPC 24th November 2008Page 18

19. Strictly Portrait Software Confidential © 2009 Portrait Software Case Study: Mobile Phone Retention II –Overall campaign increases churn by 1 pc pt Positive impact Negative impact No impact –Targeting best 20% by ROI improves campaign ROI by 800 pc pts. –Targeting best 40% by Uplift achieves 1.8 pc pt reduction in churn –Targeting no one leaves churn unaffacted Incremental value c. €40m p.a. IQPC 24th November 2008Page 19

20. Strictly Portrait Software Confidential © 2009 Portrait Software Multi-Campaign Optimization Multiple potential offers with predicted ROI Constraints –Channel volumes and costs –Contact limits Typical 3-6 month planning timeline Challenge is now to balance this against real-time interactive prompts Strictly Portrait Software Confidentialpage 20

21. Strictly Portrait Software Confidential © 2009 Portrait Software Strictly Portrait Software Confidential, June 2008Investor briefing - page 2124 June 2008Investor briefing - page 21 www.portraitsoftware.com Europe (Headquarters) The Smith Centre, The Fairmile Henley-on-Thames, Oxfordshire, RG9 6AB, United Kingdom T: +44 (0)1491 416600 F: +44 (0)1491 416601 Americas 125 Summer Street 16 th Floor Boston MA 02110, USA T: +1 617 4575200 F: +1 617 4575299 Edinburgh 39 Melville Street Edinburgh EH3 7JF, United Kingdom T: +44 (0) 131 220 4491 F: +44 (0) 131 220 4492 Asia Pacific Level 7 15-17 Young Street Sydney NSW 2000 Australia T: +61 2 8004 9600 F: +61 2 9276 2799 Oslo Maridalsveien 87, Bygg 1 0461 Oslo Norway T: +47 22 38 91 00 F: +47 23 40 94 99