1. Customer Loyalty Imperative

2. The Story Behind the Program Ferguson knew we had a high customer SATISFACTION rating, but what if Gitomer was right and it’s really about LOYALTY? The math behind it: Companies with even the highest satisfaction ratings, still have dissatisfied customers. Example: 97.5% satisfaction = 2.5% dissatisfied customers who tell others. Satisfaction is no longer the gold standard – LOYALTY is what counts.

3. Research Approach Original intent was off-the-shelf modules Gitomer’s observation Steering committee made of senior level representation from all business groups Focus groups Branch study Candid customer and associate feedback SME meeting prior to launch of each phase for planning and improvement

4. Tough Questions In a $1B+ company, how do you stay tuned in to the voice of the customer? Speak with your customers and be prepared for some answers that will make you uncomfortable. –During candid customer interviews, we ask: What they like/ don’t like about us Would they recommend us to others, why or why not –Regular follow up with semi-annual surveys mailed to thousands of customers. Don’t just talk to those who love you, talk to those that loathe you.

5. Program Overview Train-the-Trainer Sessions 8 sessions initially held throughout the US Program rolled out to over 1000 locations and 19,000 associates Phase I – “Customer Loyalty is the Measure of Your Present and Future Success” Training course developed from Jeffrey Gitomer’s book, Customer Satisfaction is Worthless, Customer Loyalty is Priceless. Eight hour, leader led program Phase II - IV – In order to participate in phases, associates are required to have been enrolled in and completed each previous phase. Web-based 12 modules per phase/ four lessons per module Designed to complete a lesson per week with phase completion within a year Incorporates candid customer and associate feedback, video from the pros, and interactive games to keep associates engaged

6. Evaluation Not a PROJECT an IMPERATIVE Placed on manager scorecards Measurement addresses both confidence and skill set change User totals in each department or branch Highest confidence group Learner totals On time progress each department or branch Progress in each department or branch Skill meter – current class level Course schedule status in each department or branch

7. Associate Results 90% of the associates saw real and tangible value in the training Over 88% said they felt the training IS a priority for management 83% have implemented positive changes in the way they do their job 76% felt more empowered to take action for a customer or colleague 32% found courses useful in BOTH their professional and personal lives

8. Customer Results Only one questions matters: Would your customer recommend you to others? –Nov. 2006 92.0% Yes, 4.7% No, 3.3% Survey not valid* –July 2007 94.9% Yes, 2.8% No, 2.3% Survey not valid* –March 2008 94.2% Yes, 4.6% No, 1.2% Survey not valid* Why? –Relationship: Nov. 2006 50%, July 2007 58%, March 2008 64% (+14%) –Associate Knowledge of Product/ Industry: Nov. 2006 43%, July 2007 49%, March 2008 51% (+8%) –Product Selection: Nov. 2006 35%, July 2007 41%, March 2008 41% (+6%) * Different geographies are surveyed each time, which may account for the slight change in data

10. Questions?