Maximizing Customer Loyalty and Profitability Mariano Legaz Florida

Maximizing Customer Loyalty and Profitability Mariano Legaz Florida Region President Verizon Wireless Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.

Maximizing Customer Loyalty & Profitability Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 2

Maximizing Customer Loyalty & Profitability Postpaid Churn Verizon AT&T Sprint T-Mobile 3% 2% 1% 0% Q 1 2013 Q 2 2013 Q 3 2013 Q 4 2013 Q 1 2014 Q 2 2014 Q 3 2014 Q 4 2014 Q 1 2015 Sources: - Wireless Carrier Quarterly Reports Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 3

Maximizing Customer Loyalty & Profitability Prepaid % of Subscriber Base W Europe CE Europe N America CL America Asia-Pacific M East & Africa 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: - Strategy Analytics 2015 (Wireless Operator Strategies (WOS) Strategic Advisory Service Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 4

Maximizing Customer Loyalty & Profitability Year on Year Wireless Total Revenue Growth Verizon AT&T Sprint T-Mobile 50% 40% 30% 20% 10% 0% Q 1 2013 Q 2 2013 Q 3 2013 Q 4 2013 Q 1 2014 Q 2 2014 Q 3 2014 Q 4 2014 Q 1 2015 -10% Sources: - Wireless Carrier Quarterly Reports Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 5

Maximizing Customer Loyalty & Profitability EBITDA Margins Verizon AT&T Sprint T-Mobile 50% 40% 30% 20% 10% 0% Q 1 2013 Q 2 2013 Q 3 2013 Q 4 2013 Q 1 2014 Q 2 2014 Q 3 2014 Q 4 2014 Q 1 2015 Sources: - Wireless Carrier Quarterly Reports Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 6

CRM Lifecycle Success Starts well before the sale ONBOARDING First 30 Days CULTIVATION In Contract / Device Plan Out of Contract / No Device Plan New customer introduction to VZW Stimulate usage of existing products and services CHURN REDUCTION Expiring Contract / Installment Post Contract / Installment Proactive actions to reduce churn and respond to bells of churn Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 7

The Service-Profit Waterfall Employee Engagement Retention & Productivity Customer Satisfaction (NPS) Customer Loyalty Revenue & Profit Adapted from The Service-Profit Chain, Heskett, Sasser & Schlesinger Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 8

Maximizing Customer Loyalty & Profitability Verizon Credo…. …“We focus outward on the customer, not inward. We make it easy for customers to do business with us, by listening, anticipating and responding to their needs. We know our products and can explain them to customers. We focus on fundamental execution. We are accountable and we follow through with a sense of urgency. We know that having the highest ethical standards is a competitive advantage. ”… Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 9

It starts well before the sale… Three Types of Employee Engagement: 1. Actively Engaged ( typically 17 -29% of employees) • employees that you build your organization around are the ones that help take your organization to the next level. • According to a recent Gallup poll, world class businesses that make money and exhibit low company turnover, and among other things have engaged employee to disengaged employee ratios of about 9. 6: 1, as opposed to a disappointing 1. 8: 1 for the average business. 2. Unengaged ( typically 50%) • like their jobs and may be good at them, but they don’t really care much about the company’s goals (often because they have no idea what they are). 3. Actively Disengaged – (17 -29%) • • employees who go to work just to get their paychecks cost American companies an estimated $300 billion annually in lost productivity Sources: - theproductivitypro. com article 00135 - gallup. com / businessjournal / 166667/ five ways improve employee engagement Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 10

ENGAGEMENT A heightened EMOTIONAL AND INTELLECTUAL CONNECTION that an employee has for his or her job, organization, manager or co-worker that in turn influences him or her to apply additional discretionary effort to his or her work. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 11

Facts High-Engagement Companies Achieve: • 87% less likely to leave the organization Retention • 8 X the number of employees exerting highest level of effort • 86% higher levels of customer satisfaction Discretionary Effort Customer Satisfaction …Over Low-Engagement Companies Source: CLC Survey of 59 Organizations, 50, 000 Employees Worldwide Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 12

Levels of Engagement. . . from A Customers Viewpoint Actively Engaged “He appreciated that I knew what I wanted and did not try to talk me out of it. PLUS, he actually heard my objections and was able to meet my needs perfectly. Really happy with the transaction AND the service. Thanks! I actually usually travel a good distance to this particular store just for the service. Has always been EXCELLENT!” Unengaged “Online reviews from multiple sources were different than representatives personal opinion. Felt a little like being sold a product that was there rather than being given honest answer. We are not thrilled with what was purchased, but it will do. ” Actively Disengaged “Went back to the store with questions regarding the bill I have already received with items on it that were not explained to me. Bill is $70. 00 higher then what was told to me. The girl that talked with me was not professional at all and I don’t like being patronized or talked to the way she did. Nothing was solved. I walked in calm and walked out angry. I will not return to that store and will look at a way to find service with another company. ” Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 13

Engaged Employees – Key Factors Engagement is driven by a number of interrelated factors including: o Employee confidence that they can do their job properly Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 14

Engaged Employees – Key Factors o Being allowed to do so with minimal oversight Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 15

Engaged Employees – Key Factors o Ongoing communication and feedback from management, especially in terms of conveying information and congratulating good work Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 16

Engaged Employees – Key Factors o Access to training and career development o Opportunities for Growth Sources: - theproductivitypro. com article 00135 - gallup. com / businessjournal / 166667/ five ways improve employee engagement Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 17

Engaged Employees – Key Factors o A clear understanding of the company’s goals, and why employee contributions matter Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 18

Engaged Employees – Key Factors o Trust in the company and its integrity o Pride in the company, and their place in it Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 19

Engaged Employees – Key Factors o Opportunities to work in a team environment o Relationships with team members and other co-workers Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 20

Engaged Employees – Key Factors o Presence of a confident, competent, and (most importantly) supportive manager who can lead by example Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 21

Key Drivers of Employee Engagement Source: Talent. Keepers Employee Engagement Model, © 2011. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 22

Current Engagement level? How would you describe your team’s engagement? What can you do or have you done to improve their engagement? What is the single biggest obstacle that gets in your way in improving employee engagement? How are engagement efforts reflected / measured in your Customer Satisfaction metrics? Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 23

Maximizing Customer Loyalty & Profitability 65% are likely to speak about a negative experience 25% are likely to speak about a positive experience 8 chur out 10 n cu s say it co tomers u ld been prev have ente d Sources: • Harvard Business Review: Stop Trying to delight your Customers July 7, 2010 • gallup. com / businessjournal / 166667/ five ways improve employee engagement It costs almost 6 times as much to acquire a new customer as it does to retain a current one. 98% of Customers that churned, discussed their issue with a rep 90% of Customers who left were not offered a Save tool or incentive to stay Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 24

Thank You Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement. 25