1. Maritz Research, April 2010 Synching Brand and Customer Experience Research PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Keith Chrzan, VP, Marketing Science, Maritz Research

2. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Commonly Asked Questions Will I be able to obtain copies of this presentation after the event? Is this Webinar being recorded so that I or others can view it at a later date? Yes Yes

3. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Have A Question? How to submit questions to the speakers during this presentation: Floating Tool Bar

4. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Maritz Research, April 2010 PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Synching Brand and Customer Experience Research Keith Chrzan, VP, Marketing Science, Maritz Research

5. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 5 Brand and Experience Research are not in Synch Companies invest in marketing programs, at least partly to shape potential customers’ beliefs about their brands They also invest in operations, to fulfill the promises they make with their marketing efforts But they often silo the research on these two expenditures – Often two views emerge, only partly aligned – As a result, a holistic picture never emerges Resource allocations are less evidence-based than they could be

6. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 6 Advantages of Synching Once we know the contribution of each kind of experience in brand choice we can see how important they are relative to one another, informing resource allocation decisions

7. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Three Ways to Make Them Synch Statistical model for customer experience as one of many ways of knowing about brands Direct questions about the relative contribution of customer experience and brand building efforts Integrating customer experience into a choice model of brand selection 7

8. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 8 Three Case Studies 4,371 mobile phone users in North America and Europe 1,858 U.S. buyers of automobile insurance 1,202 buyers of delivery pizza

9. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Three Ways to Make Them Synch Statistical model for customer experience as one of many ways of knowing about brands Direct questions about the relative contribution of customer experience and brand building efforts Integrating customer experience into a choice model of brand selection 9

10. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 10 Ways Customers Know Brands Different kinds of experiences affect people’s knowledge of, evaluations of, and choices among, brands First-hand experience Advertising Public Relations Word-of-mouth Word-of-mouse Website Etc. First-hand experience Advertising Public Relations Word-of-mouth Word-of-mouse Website Etc.

11. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 11 Modeling Metricized Categorical Regression

12. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 12 Questionnaire Ask only for brands respondent has heard about via Word-of-Mouth We ask similar questions for each brand they’ve experienced first hand, each they’ve seen advertised, etc. 10.Based on what your friends, relatives, or colleagues said, how do you feel about each of the following automobile insurance companies? Extremely positive Somewhat positive Neutral Somewhat negative Extremely negative a. State Farm54321 b. Allstate54321 c. Progressive54321 d. GEICO54321 e. Nationwide54321 Etc.

13. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 13 MCR Model Use respondents’ evaluations of experience, advertising, PR and WOM to predict brand preference/choice MCR quantifies separate effects of different sources of information (and of missing information)

14. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 14 Relative Importance – Auto Insurance Personal experience is consistently most important, but … – the website plays a significant role for several brands – word-of-mouth matters Source of Information All Brands Experience75%80%73%65%57%74%76%74%71% Advertising214946164 Word of Mouth10 899111011 Website11 13142678711 PR/Word of Mouse222242322 PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2009 Relative Importance of Information Sources By Brand For All Customers (Percentage)

15. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 15 Relative Importance – Auto Insurance Personal experience trumps all for loyal customers Among switchers, advertising and word-of-mouth count for more than personal experience Source of Information All Customers (%) Loyal Customers (%) (81% of All) Switchers (%) (19% of All) Experience757713 Advertising2239 Word of Mouth10934 Website11 7 PR/Word of Mouse227 PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2009

16. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 16 Relative Importance - Mobile Phones Same relationships hold for Mobile Phone market Source of Information Loyal Customers (%) Switchers (%) Experience5831 Advertising1830 Word of Mouth1428 Website99 Word of Mouse11 PR11

17. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 17 MCR Special Effects Intrinsic to the MCR modeling is the notion that effects of experience, advertising, etc. on brand preference/choice may not be linear MCR automatically quantifies the effect of “non-experience” PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2009

18. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 18 Response Function for Experience - Pizza Very negative Somewhat negative NeutralSomewhat positive Very positive 1.2 1.0 0.8 0.6 0.4 0.2 0.0

19. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 19 Response Function for Advertising - Pizza Very negative Somewhat negative NeutralSomewhat positive Very positive 1.0 0.8 0.6 0.4 0.2 0.0

20. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Three Ways to Make Them Synch Statistical model for customer experience as one of many ways of knowing about brands Direct questions about the relative contribution of customer experience and brand building efforts Integrating customer experience into a choice model of brand selection 20

21. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 A Second Approach to Determine Source of Preference A stated importance approach combines answers from two direct questions: 21 FOR EACH FACTOR CHOSEN: What made you believe that (BRAND PREFERRED) is better on (FACTOR)? Multiple responses allowed. Method a. Advertising( ) b. Website( ) c. Personal experience( ) d. Things I heard from relatives/friends/coworkers( ) e. Things I read in magazines, newspapers, blogs( ) f. Other…please specify( ) Which one thing below made you choose (BRAND PREFERRED)? What other things led you to select (BRAND PREFERRED)? MostOthers a. Offers the phones that you are interested in( ) b. A good selection of wireless phones in their stores( ) c. Reliable wireless coverage( ) d. Economical, predictable pricing( ) e. Texting and data plans that fit your needs( ) f. Etc.( )

22. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 22 For Loyal Customers, Personal Experience Most Influences Choice Choice Influencers (Cross-Brand) Among Loyal Customers

23. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 23 Among Likely Switchers, Advertising and WOM More Important Choice Influencers (Cross-Brand) Among Switchers

24. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Similar Findings about Drivers of Brand Preference Experience is clearly the most important driver of brand preference Word of mouth and advertising flip-flop in importance between the two measurement approaches 24 MCR (Derived) vs. Stated Influence for: * Re-based to add to 100%.

25. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Three Ways to Make Them Synch Statistical model for customer experience as one of many ways of knowing about brands Direct questions about the relative contribution of customer experience and brand building efforts Integrating customer experience into a choice model of brand selection 25

26. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 A Customer Satisfaction Model 26 Satisfaction Product Price Service Speed Size Function Color Sales Support Price Deal Experience attributes predict overall satisfaction on a five point scale.82.79.76.63.85.71.84.76.81.14.05

27. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Satisfaction Model Integrated into Choice Model 27 Brand C Brand B Brand E Brand A Brand D Brand G Brand F Product Price Service Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63

28. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 What’s Different? 28 Brand C Brand B Brand E Brand A Brand D Brand G Brand F Product Price Service Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63

29. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Attribute Importances Tell a Different Story 29 Brand C Brand B Brand E Brand A Brand D Brand G Brand F Product Price Service Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63

30. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Multiple Brands Reflect Competitive Environment 30 Brand C Brand B Brand E Brand A Brand D Brand G Brand F Product Price Service Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63

31. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Fancy Math Connects Satisfaction to Choice Outcome 31 Brand C Brand B Brand E Brand A Brand D Brand G Brand F Product Price Service Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63

32. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Outcome is a Brand Choice (Translatable into $) 32 Brand C Brand B Brand E Brand A Brand D Brand G Brand F Product Price Service Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63 ProductProduct PricePrice ServiceService Speed Size Function Color Sales Support Price Deal 4.21.96 1.06.82.79.76.85.71.84.76.63

33. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Simpler if You Want to Hold Competition Constant 33 Brand Share Product Price Service Speed Size Function Color Sales Support Price Deal Attributes predict brand choice instead of satisfaction

34. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 And Better Still if Competition is Irrelevant 34 Retention Product Price Service Speed Size Function Color Sales Support Price Deal Attributes predict retention/defection (called survival analysis)

35. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 35 Summary Through careful questionnaire construction and modeling we can synch brand and customer satisfaction research studies We’ve shown three different methods – Linkage via MCR model (powerful model, so-so results) – Linkage via direct questions (better, but still a “nice to have” in a “need to have” world) – Linkage via integrating customer experience into a choice model (seems like the way to go)

36. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Questions?

37. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010 Obtaining Copies of Today’s Presentation For copies of today’s presentation or to replay this webcast (recording generally available within 24 hours) Go to: http://www.maritz.com/News-Events-and-Insights/Events/Webcasts.aspx To contact today’s speaker: keith.chrzan@maritz.com To receive a copy of the Maritz Research Forum Quarterly eNewsletter, see www.maritzresearch.com (left sidebar)www.maritzresearch.com Follow Maritz Research on Twitter: @MaritzResearch

38. PROPRIETARY AND CONFIDENTIAL, MARITZ COPYRIGHT 2010