1. January 23-26, 2007 Ft. Lauderdale, Florida Customer-Centered VoIP Marketing Internet Telephony Conference & Expo East 2007 Presented by Karen Strouse Management Solutions Fort Lauderdale, Florida, USA

2. January 23-26, 2007 Ft. Lauderdale, Florida …but they are nothing until I call them. Some of them are strikes, and some of them are balls…. …and I call them as they are. The Customer Defines the Business The past The present The customer …and I call them as I see them.

3. January 23-26, 2007 Ft. Lauderdale, Florida Bundle Mythology - Debunked Everyone wants bundles, but... The motivation for bundles is one provider, one bill, but... Customers cant wait for quadruple play, but... Fixed-access providers are well-positioned for quadruple play, but... Few buy bundles. The purchase criterion is price. Customers are suspicious of too much commitment. Most customers only bundle 2-3 services Many households dont bother with conventional wireline voice

4. January 23-26, 2007 Ft. Lauderdale, Florida Bundling: Pyramid Research Report From Transforming Triple Play research report Metrics routinely used by cable companies (measuring revenue-producing applications rather than customers) provide the best management information. Telcos routinely sell 1 to 1.5 services per customer; cable companies 1.5 to 1.9. Bundles do not compensate for substandard elements. Quadruple play availability provides portfolio flexibility. Wireless and VoIP displace fixed-line component in multiple play bundles. Discounts arent a proven catalyst for bundle sales.

5. January 23-26, 2007 Ft. Lauderdale, Florida The Good News about Bundles Bundles currently aid retention Bundles could become more popular and more sustainable when the value they offer is more than the sum of the parts The customers preferred bundle provider is the best at the service that matters most

6. January 23-26, 2007 Ft. Lauderdale, Florida Marketing Strategies Product development Pricing Branding Segmentation Database marketing, customer value and retention

7. January 23-26, 2007 Ft. Lauderdale, Florida Product Development: Revisiting the Diffusion of Innovation Curve Minimal Marketing Focus Niche Marketing (bowling alley) Build Market Share (Tornado) After: Crossing the Chasm, Geoffrey A. Moore Sell to the end user (Main Street) Product Leadership Operational Excellence Customer Intimacy Value Disciplines Market Strategie s

8. January 23-26, 2007 Ft. Lauderdale, Florida Product Development: In-Stat findings

9. January 23-26, 2007 Ft. Lauderdale, Florida Product Development: Fundamentals Customer service expectations –Network reliability –Customer care –Technology innovation First-mover advantage is critical Some of the most successful launches have been surprises

10. January 23-26, 2007 Ft. Lauderdale, Florida Price: Pricing Structure Shapes Market Development Sprint introduction of per-minute pricing AOL flat-rate monthly service Internet service, Europe vs. US Wireless penetration, Europe vs. US Monthly flat rates or large buckets of minutes for wireless and long-distance

11. January 23-26, 2007 Ft. Lauderdale, Florida Price: Telephia research findings Price is the most important factor for customers selecting a bundle

12. January 23-26, 2007 Ft. Lauderdale, Florida Price: Aim for Sustainable Critical Mass Create a profitable commodity service in price- driven segments Practice price discrimination Event-based pricing Exploit customer initiative

13. January 23-26, 2007 Ft. Lauderdale, Florida Branding: Demystifying Differentiation What it isnt: 24/7 customer support, high- quality service, and service bundles. What it is: Offering something that your competitors dont offer and probably cant offer later. Exclusive access to content or partners. Switching costs: the dual-edged sword.

14. January 23-26, 2007 Ft. Lauderdale, Florida Branding: Value Differentiates Commodity Preferred Brand Market Leader Service provider commands price premium Purchase decision based on price alone Service providers reputation affects purchase Bias towards a particular service provider

15. January 23-26, 2007 Ft. Lauderdale, Florida Branding: Best Practices Know the market segment buyer values Build on strengths Support brand identity with infrastructure Be prepared to invest in branding for the long- term Recognize that brand extensions have risks

16. January 23-26, 2007 Ft. Lauderdale, Florida Segmentation: Price/Service After: Strouse, Karen, Marketing Telecommunications Services: New Approaches for a Changing Environment, Artech House, 1999 Wholesale Systems Integrator Retail Turnkey Services Resellers Education, local government, not-for-profit Consumers, low-end Price-driven segments Multinational, Fortune 500, technology- dependent vertical markets Mid-sized and vertical markets where technology isnt the primary mission-critical task Small business, SOHO market, telecommuters Service-driven segments Offer ancillary services, information services, support Target a vertical or geographical submarket Target a demographic or geographical sub-segment Opportunities for new entrants

17. January 23-26, 2007 Ft. Lauderdale, Florida Segmentation: Business/Consumer Select one segment or serve both through yield management High and low volume segmentation Lessons from the airlines –can practice price discrimination –benefits all users –benefits provider Vary all elements of the marketing mix

18. January 23-26, 2007 Ft. Lauderdale, Florida Segmentation: Value-Based Identify value of factors: –Acquisition costs –Total lifetime revenue –Cost of providing products and services –Length of customer relationship Compute net present value of customer relationship Focus on high value segments Provide excellence in the customers view

19. January 23-26, 2007 Ft. Lauderdale, Florida Value and Retention: Anticipate and Meet Customer Needs Consult CRM applications to predict and prevent churn proactively Analyze customer databases to develop market segments based on buying patterns Decentralize authority to react to competitive initiatives Detect service problems before customers report them

20. January 23-26, 2007 Ft. Lauderdale, Florida Value and Retention: Churn Conventional wisdom: churns expense is the high cost of customer acquisition Less evident: wireless customers most likely to churn had higher average bills Customers will churn to service providers that make it easy to churn again Bundling reduces churn

21. January 23-26, 2007 Ft. Lauderdale, Florida Value and Retention: Churning for Small Discounts Source: TNS Telecoms

22. January 23-26, 2007 Ft. Lauderdale, Florida Thank you! Karen Strouse www.karenstrouse.com