1. Naïve to Natural Steven Walden Senior Head of Research and Consulting Kalina Janevska Consultant

2. Agenda N2N Model – Background Other Companies’ Examples Pfizer Top-Line and Key concepts 2

3. The Cake Experience Differentiated Stage experiences Deliver services EMOTIONAL ENGAGEMENT Make goods Extract commodities Undifferentiated Same as everybody else More expensive PRICING Welcome to the Experience Economy, Pine & Gilmore, HBR, July-August 1998 3

4. The Cake Experience Differentiated Stage experiences Sell party Deliver services Prepared cakes EMOTIONAL ENGAGEMENT Make goods Box cake mix Extract commodities Raw Ingredientsbr />Undifferentiated Same as everybody else More expensive PRICING Welcome to the Experience Economy, Pine & Gilmore, HBR, July-August 1998 4

5. The Charge/Credit card Experience? Differentiated Stage experiences Embedded in lifestyle Deliver services Personalized benefits EMOTIONAL ENGAGEMENT Card with benefits package Make goods Extract commodities A basic card Undifferentiated Same as everybody else More expensive PRICING Welcome to the Experience Economy, Pine & Gilmore, HBR, July-August 1998 5

6. Differentiated Managing wellbeing Stage experiences Treating the patient Deliver services EMOTIONAL ENGAGEMENT Treating the disease Make goods Treating the obvious symptoms Extract commodities Undifferentiated Same as everybody else More expensive PRICING Welcome to the Experience Economy, Pine & Gilmore, HBR, July-August 1998 How would this look for the “Being a Patient” Experience? 6

7. Naïve to Natural Model Background Globally North America, United Kingdom, Europe, Asia Pacific Across a range of Industries Financial Services, Automotive, Airline, Retail, Utilities, Entertainment, Telco, etc. World Leading Global Organisations Allianz, Aviva, Eon, Merck, IBM, Maersk, International Hotel Group (Holiday Inn…), etc. 7

8. Identifying the Natural advantage Post 1980s Pre 1980s Post 1970s Pre 1970s 8

9. Agenda N2N Model – Background Other Companies’ Examples Pfizer Top-Line and Key concepts 9

10. Creating Delight 10

11. Using emotional and subconscious engagement Could equally apply to : Tone of Voice Carpeted Malls On-site workers 11

12. A customer centric business You run a construction company remodelling government sponsored low-income housing. It is often not possible for tenants to stay in their homes during the day while you complete your work. What would you do?

13. Creating a new market space Law requires homes of a certain standard Govt. pre-selects contractor for other contracts Govt. de-selects contractor from other contracts Government needs contractor to bring homes up to standard Result: Mears have witnessed double digit growth (20-40%) over the last five years! Win contracts from government Govt. builds goodwill Govt. loses goodwill Service government owned homes Tenants have exceptionally good experience Tenants have bad experience

14. Think of your average public library experience? Internet Video Games TV Movies etc. Competition for Libraries 14

15. Cerritos Library Cerritos Library wanted to make sure that the customer experience stood out as much as the building. Of all Cerritos city services, the library received the highest level of customer satisfaction The library knew the first step to achieving that was getting the staff excited about their work and infusing the culture with passion and enthusiasm In 2003, Cerritos Library was named the “Experience Stager of the Year” by Experience Economy authors Pine & Gilmore. Help employees learn to focus on the big picture versus each individual task The library has experienced a 70 percent increase in circulation – from 600,000 to more than 1 million materials circulated per year. Make the work culture fun and engaging for staff and, consequently, the customers. Reservable space at the library is now booked every weekend for almost a year ahead of time. When the library first opened it was booked only about 2 days per month Train the staff to be “on stage” and to “choose their attitude” at work.

16. Cerritos Library 16

17. Leaky pipe vs. silver bullet CUSTOMER EXPERIENCE Measurement People Process Leadership & Culture Systems Strategy 17

18. Agenda N2N Model – Background Other Companies’ Examples Pfizer Top-Line and Key concepts 18

19. The key role of Pharmaceuticals Healthcare consumer’s perception of healthcare providers’ importance in keeping them healthy ( the total sums to 100%) 29% 26% Share of role in keeping healthcare consumers healthy 24% Source: Q1 2010 Customer Experience Trend Tracker, Beyond Philosophy 21% Physician/ Primary Healthcare provider Hospital Health Insurer Pharmaceutical Company 19

20. 24 Assessments Work is still on-going. The enclosed is an impression so far Canada France Germany Italy Spain UK Australia & New Zealand Greece Netherlands Austria Belgium Denmark Finland Portugal Switzerland Sweden Norway Ireland Medical Affairs(ROC) Medical Affairs (DG) RBT CV RBT Uro & Resp PBT Pain & CNS PBE 20

21. Top-Line So Far: High End Transactional Action is required All countries are different All archetypes are different This is a general overview Current Action Executive Understanding Experience Gap 21

22. Actions required: 1. Having a direction Having an overarching strategy 22

25. Company 2: The most admired business in the world Inspiring and engaging colleagues Driving high performance with colleagues Winning together Creating exceptional value for customers and company Managing risk and reputation 25

26. Company 3: Professional Warm Responsible Thoughtful British 26

27. Company 4: Keeping aisles clear Ensuring that customers can buy what they want Our prices are low We have smaller queues 27

28. Company 5: Great work environment and treat each other with respect and dignity. Embrace diversity as an essential component in the way we do business. Develop enthusiastically satisfied customers all of the time. Contribute positively to our communities and our environment. Apply the highest standards of excellence to the purchasing, production and fresh delivery of our product. 28

29. Company 6: Well trained, friendly people are key to providing service Our menu features the choice and variety consumers enjoy eating often The comfort and convenience of our restaurants attract customers Through our products and restaurant experience, we deliver value to our customers “Forever young” and engaging, our Brand connects with people around the world 29

30. What are the take-aways from this exercise? Themes by themselves do not differentiate It’s difficult to associate customer reality with the themes It’s the interpretation and follow-through of the themes that really count There is usually a key anchor word that gives the game away i.e., the company owns that word 30

32. Sainsbury's Supermarkets employs over 145,000 people.

33. A large Sainsbury's Supermarket offers over 23,000 products.

36. He switched these priorities and the worst thing a store manager could do was:be overstocked be out of stock What do you think was the effect of this change? 31

38. The shift in priority caused managers to prefer to be out of stock to being overstocked

39. The priority changed because the costs of an overstock is easily measured.

40. Service levels declined from 99% average to below 90%.

41. How do accountants measure the impact of frustrated customers?

42. They don’t because it’s not ‘hard’ data (i.e. it is not in the past)

43. What happens if customers continue not to find what they are looking for?

44. By the time Sainsbury’s recognised the problem, customer attrition had gained its own momentum!32

45. Sainsbury’s: Slight Shift – Huge Impact Revenue Cost Stock price A drop in revenue that lagged behind the decrease in cost Initially a boost in stock price but then a decline Shift in Priority Decline Initial boost Time Before After 33

46. Actions required: 2. Driving change Having a CE measurement structure in place 34

47. 30% 20% 10% Net Promoter: The One Number You Need to Grow On a scale of 0-10, how likely is it that you would recommend (company, brand, product, experience) to a friend or colleague? Not at all likely Very Likely 0 2 9 8 4 3 7 6 5 1 10 Neutrals Promoters Detractors % of Promoters (score > 8) LESS % of Detractors (score < 7) Net Promoter Score 35

48. NPS and business growth Paul Marsden, London School of Economics Harvard Business Review, One Number your Need to Grow, F. Reicheld, 2003 36

49. The Problem of Hidden Defectors 37 Beyond Philosophy © All rights reserved. 2001-2010 Case Study: Enterprise with 2 million customers Revenue = $200,000,000 per year Average Revenue per customer = $100 per year Sources: Cherry Tree Research, Bain & Co., McKinsey, Harvard Business Review and Gartner 2,992 customers $299,200 At risk — 34%Issue not resolved 2,464 customers $246,400 Complain2% Defect — 28% 8,800 customers Poor experience22% Resolved — 38% 440,000 customers Do notcomplain98% At risk — 55%Decline in wallet share 237,160 customers $23,716,000 Positiveexperience 78% 431,200 customers 194,040 customers $19,404,000 Defect — 45%

50. 38