X-treme Customer Satisfaction

1. X-treme Customer Satisfaction maximizing loyalty in a commoditized market Rudy Vidal/CCO-UCN

2. About UCN, Inc. • Began in 1997 as a reseller of telecommunication services • Publicly traded on NASDAQ as UCNN • An innovator of all-in-one hosted contact center software product that enables businesses to manage customer LOYALTY through the quality and productivity of their customer contacts Salt Lake City, Utah Headquarters

3. UCN’s Suite of Contact Center Applications

4. The Power • Never underestimate the power of a small group of dedicated individuals to change the world. • In fact, that is all that has ever changed the world. A small group of dedicated individuals. • Margaret Mead

5. Things we know but we ignore • Customer is always right. • The main reason customers defect is not high prices or poor products, but Poor Service – Joan Koob. • Customer want to solve their problems today. • Retaining existing customers is 5 times less expensive than attracting new ones. • 96% of unhappy customers will not complain to you, but will tell 9~12 of their Acquaintances – Tarp Survey 2006. • Loyal customers are 5X as likely to recommend to family and friends.

6. Falling Cost of Information • Exponential reduction of barriers to entry • Increased competition • Increased product cycles • Wide Commoditization • Difficulty differentiating • What is the largest temptation to compete?

7. 15 Features $799 20 Features $499 ? Commodity Model 10 Features $999 Is this what our customers want? It’s easier to lower the price than to think.

8. The Basic Question • Are we aligned with customer values? • Remote controls • Gas Station • Apple Care • Financial institutions • Do people look forward to opening an account? • Retail experience

9. Customer Hierarchy of Needs Partnership Both act in the best interest of the relationship. Loyalty is achieved Value Recognition Acceptance Customer recognizes long term potential of relationship, may expand to other products and services. Customer can influence vendor products.. Mutual Understanding –Start of Trust 2-way dialogue Dialogues can begin to discover the potential opportunities. Fear, anxiety and uncertainty no longer drive the relationship. Quick Prob. Resolution Fear and Apprehension Provides customer with a sense of the vendor’s commitment. Provides the Vendor with opportunities for occasional recovery and the building of trust in the vendor’s processes and ability. Product Must Work The most basic need. The product must function and fulfill the core essence of its value. Although problems may occur from time to time, they cannot cause consistent business disruptions.

10. 2000’s Chucky-Cheese Experience $100 Value Evolution to the Experience Economy 1960’s Bakery = Cake Services $10 1950’s Betty Crocker = Cake Product $2 1930’s Flour, Egg, Milk = Cake Raw Materials $1

11. Where are most of us? Evolution towards the experience economy 2000’s Experience $100 1960’s Services $10 1950’s Product $2 1930’s Raw Materials $1 Where do we start addressing experiences NOW? At the Customer !

12. Online Customers 70% X5 X9 8% 1% 3% is Not Enough ! Customer Satisfaction Definitely Will Buy Again Definitely Will Recommend Average Word of Mouth Overall Satisfaction Very Satisfied XCS = 64% 73% 2.3 Satisfied “Mollified” 13% 17% 3.8 = Dissatisfied = 3% 7.2 From April ‘07 CEA/ Tarp Benchmark Survey

13. EMOTION LOYALTY Willingness to Pay More Transactions vs. Emotional Events • XCS creates an emotional experience which results in a bond between the customer and the brand. • “The essential difference between Emotion and Reason is that Emotion leads to Action while Reason leads to Conclusions” –Neurologist Don Calne • “Emotion and reason are intertwined, but when they are in conflict, emotion wins every time.” –Kevin Roberts, CEO Saatchi & Saatchi.

14. What keeps us from XCS? • The belief that Customer Loyalty is: • Short-Term Expense • for a Long-Term • Unquantifiable result • Lack of an easily understandable, measureable methodology • Paradigm Paralysis Bad ROI

15. What is the value of X ? • A: How many Products do you sell/year? • B: What is the average revenue? • C: XCS loyalty rate: 64% • A x 1% x B x C = Value of X

16. XCS – Return on Customer (ROC) Estimate of increased XCS Total Purchases = 20 million customer 1% of customers = 200K Average revenue per customer = $80 % of XCS that will repurchase (loyalty) = 64% 1pt. increase in XCS (200k x 64% x $80) = $10.3MM Additional Sales Pts. Increase 10pts. = $103MM 20pts = $206MM 50pts = $515MM

17. March 2007 > Beating the Market with Customer Satisfaction

18. How do we maximize XCS throughout the Organization and onto the Customer?

19. Drivers matter in the XCS model Corporate KPIs KPIs KPIs KPIs KPIs Touch-point Customer Expectations (VOC) Touch-point Customer Expectations (VOC) Touch-point Customer Expectations (VOC) Touch-point Customer Expectations (VOC) Start Here Culture (behavior) Policy & Procedures Management Expectations

20. Find Touchpoints through a Customer Journey Motivation Awareness Research • Advertising • Mass Media • Recommendations • Website • Call Center Decision Purchase Delivery • Recommendation • Retail • Website • Retail • On line Experience • Follow-up Experience • Delivery Expectation • Out of Box Experience Installation Set-up Service Operation • Turn-around-time • Quality of repair • Call Center Operations • Operating Instruction • Call Center • Operating Instructions • User interface • Call Center

21. Rate Touchpoints through Power Transfer • High Power Transfer • Volume x Emotional Potential • Key touch-points • Customer Call Centers • Web site • Operating Instructions • Out of Box Experience • Service Recovery

22. XCS in Summary • People Value Experiences most • Align ourselves with our customers’ values. • Ask, listen, don’t wait for the customer to understand us. • XCS is: Giving the customer “More than they Expect” • Loyalty starts in a spark of positive emotion • Identify our touchpoints from the Customer Journey • Power Transfer = Volume x Emotional Potential • Contact Centers are NOT Cost Centers

23. Requirements for success in XCS • Be impatient • Be emotional • Take it Personally !

24. Thank you. (willtheybuyagain.wordpress.com)

25. Initial Culture (Behavior) Management • Middle Management Workshops • Immersion, hands-on, pragmatic, concentrate on real customer experiences • Focused, Simple, Consistent Communications • “Slightly more than they expect” • Create Emotional Events at every touch-point • Customer is anyone who receives your output • Manage Micro-cultures as needed • Pre Sales – Product design, operating instructions, • Post Sales Support (Call Centers, Service) • Web teams (Less is more, FVR, Customer Tool) • Sales teams (Add value, surprise • Recruiting / New Employees • Maximize Opportunities for Discussions and involvement • Internal Blog • E-mail • Customer visits

26. Three levels of Satisfaction Metrics • First call resolution • Top Driver of Customer Satisfaction • “Agent had the skill and expertise to resolve my issue” • “The number of calls made on this issue was sufficient” • Call Experience • Emotional perception • “The call was easy to navigate” • “I was satisfied with time to reach a live agent” • Member loyalty • Satisfied, loyal Customers • “I learned something new on this call” • “The support I received will influence my member renewal”

27. Call Center • KPIs • Average Speed of Answer, Abandon Rate • First Call Resolution , Time to Resolution • Customer Satisfaction, repurchase/recommend • Actions: • Culture Management • Full Call Center Assessment • IT Stabilization • Policy/Process redesign for XCS -> Efficiency • Empowerment • Self Contained Teams –> FCR • 15 minute Interventions • Many more

28. Call Center Metrics

29. Call Center Metrics

30. First Call Resolution is the #1 driver of XCS As number of contacts increase, opportunity for XCS decreases % completely satisfied Number of contacts needed to solve problem

31. Concierge Survey Results: MTD Sept 2006 First Call Resolution

32. Concierge Survey Results: MTD Sep 2006 Xtreme Satisfaction with Action taken

33. CEA Customer Survey feedback - Panasonic 2002 Panasonic (phone) 2003 Panasonic (phone) April 2004 Panasonic (phone) April 2005 Panasonic (phone) April 2006 Panasonic (phone) April 2007 Panasonic (phone) Average # of reasons for contact 1.2 1.7 2.3 2.5 2.5 2.7 % Completely satisfied with action taken 47% 40% 45% 39% 63% 80% Average Time Until Final Action Within 1 day Within 2 days Within 1 day Within 2 days Within 4 hr. Within 2 hrs Average # of contacts 2.9 2.4 2.1 2.8 1.9 1.6 Overall Satisfaction 55% 48% 44% 48% 65% 76% Overall Repurchase Intention 39% 36% 33% 28% 43% 62% Overall Recommend Intention 46% 45% 40% 32% 51% 65%

36. Paradigms Knowing when to get off

37. A set of rules established to solve a problem. A pattern for expected action. • Effects • Increased efficiency in solving problems • Filtering effect between data and information • Blindness to change • Even Drastic Change !

38. Some see the new paradigm • Barnes & Noble • Starbucks • Harley Davidson • Nordstrom’s • Kayak.com They all add value through the experience.

39. Some didn’t see the Shifting Paradigm • Transportation – Shift from Rail to Trucking • Time keeping – Shift from mechanical to electronic • Computing – Shift from Mainframes to Distributed • AOL – Shift from Fee-Portal to Free-Community • Shift from on-premise hardware to Software as a Service

40. Anatomy of Paradigm Shifts • Acceptance too late Problems Solved • Ahead of the curve • Usually by an outsider Time

41. Destroy your paradigm before someone else does • The Paradigm doesn’t have to encompass your entire company, there are many throughout • Tie them together on a common theme • Examples: • Dell’s distribution model • Apple sells fruit turned into designs • not features Problems Solved Time

42. Paradigms are shifting faster • How do you catch up? • Generally, most companies don’t • The best approach is to create new ones

43. XCS is a new Paradigm Contact Centers are the engines of change