2. 2011 Base Marketing Priorities
Strategy & Insight Early life
(activate)
Engagement/Loyalty
(engage/Inform)
Revenue
Generating (grow)
Churn/Reactivation
(retain)
Build top notch CRM strategy and
competency based on actionable insight
and customer-centricity
Improve customer
experience and reduce
customer pull back
Increase customer engagement and
build loyalty for the brand
Increase share of wallet
by building always-on
revenue engine
Lower customer and
account churn proactively &
reactively
A. Project CIM: Enrich and evolve
marketing data mart (CIM) to
improve decision-making and
customer base targeting
B. Project Contact Recovery: Improve
customer contact deliverability by
scrubbing CIM data
C. Project Digital Outbound: Identify
and secure best in class
digital/email marketing solution to
improve effectiveness and quality of
customer communications
D. Project NAB: Increase usage of
NAB segmentation for strategy
development, customer acquisition,
. And to Increase relevance and
impact of customer
communications
E. Project Rapid
Detection: Reduce
non-RF pull back by
improving
customer
experience through
rapid pull-back
detection program
F. Project Onboarding:
Reengineer
customer
onboarding
approach to
positively impact
post-activation and
lower non-RF pull
back
G. Project CLEAR Inner Circle:
Increase customer loyalty and
brand affinity by launching
CLEAR Inner Circle loyalty
program
H. Project Lifetime Value: Build
and implement Lifetime Value
(LTV/FLTV) model to help
prioritize base efforts and
retention offers
I. Project MyPreferences:
Increase customer engagement
and personalized participation
through preference center
J. Project Usage: Increase loyalty
through improved service
usage and customer education
K. Project Base
Revenue: Build
predictable base
revenue model by
developing and
rolling out always-
on upgrade & upsell
program that
generates
sustained base
revenue
L. Project
Partnerships:
Identify and secure
key strategic
relationships to
increase revenue
and loyalty with the
base
M. Project React: Develop
and implement effective
and cost-efficient
always-on React
program
N. Project Churn Model:
Roll out and monitor
impact of predictive
churn model
O. Project Churn
Prevention: Design and
execute churn
preventive activities
based on churn risk
• Contactability
• Data mart integrity/sources/users
• Q1 email solution availability
• Penetration of NAB segments
• Pull-back ratio
• Usage of
product/service
• Unsubscribe/open ratio
• Pref Center penetration ratio
• NPS and CSat
• Revenue target
• Rev/spend ratio
• Churn rate
• React rate
• Cost per react
KPIsBigBets(strategies)GoalsFocus
Consciously Consistently
Creating Customer Value
2
3. CLEAR continues to experience higher
than industry standard churn across its
customer base.
Currently, we are not recognizing high-
value customers for their business
There are no incentives to create
„stickiness‟ and encourage customers to
remain loyal to the brand.
Increasing customer loyalty is critical to
short and long term growth of the
CLEAR brand and retail business
CLEAR must move the customer
relationship from a product relationship to
a brand relationship to maximize the
value of the customer
CLEAR must create ‘stickiness’ in the
mind of the customer by providing an
incentive-based program that encourages
loyalty to the brand
The loyalty program will help us determine
“how” to effectively manage our
relationship with our best customers
SITUATION BUSINESS OPPORTUNITY
Churn Prevention
Opportunity is to increase customer engagement and ‘stickiness’
by strengthening customer loyalty and sustaining the relationship
4. Purpose
To create an inclusive customer loyalty program which
delivers enhanced value and measurable ROI, while
driving brand loyalty through incentives, exclusivity and
customer recognition.
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5. Desired Impact
Desired impact on customer behavior:
- Increased tenure (primary)
- Higher MRC (secondary)
- Reduced delinquencies (secondary)
Other “side” benefits:
- Positive brand association
- Word of mouth
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• “There is a valuable incentive for me to stay in this relationship”
• “I feel valued and recognized for my business”
• “I feel rewarded for my efforts and my commitment to the brand”
• “There is a perceived cost for me to switch to the competition”
6. Key Design Points
Sole focus is on the desired
change in customer
behavior (longer tenure,
higher MRC and reduced non-
payments) = laser-
focused
Offers carefully selected
based on high-perceived
value (based on research) and
low cost = limited
budget
Program built, sustained and
continuously optimized based
on ROI performance =
fiscally accountable
1 2 3
Phased launch
approach allows adequate
time for measurement and testing
of initial pilot = quality
control
Distributive tier
model creates differentiation
and incents based on actual
customer value. Top tier small
(<2%) to minimize program cost &
avoid potential impact of false
positive = low risk of
false positive
Program is inclusive by
design: top tier creates
exclusivity common in loyalty
programs yet every Clear customer
participates so most of the impact
is felt in lower tiers (where churn is
high) = broad impact
4 5 6
8. A Program That Says “Thanks”
CLEAR Inner Circle is a simple,
personalized loyalty program
created for and by our customers.
We thank by bringing them into
our inner circle where rewards are
segmented into three levels, or
what we like to refer to as circles.
The closer customers move to the
innermost circle, the greater their
rewards.
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9. It‟s All About Our Customers
To build stronger relationships with our loyal customers, we are
focusing our conversation around 3 core pillars:
Tenure
Pay bills on
time
Adding
services
Move up in tier
Greater
Rewards
These pillars are key to the way we communicate how customers
remain and move up within the program with the ultimate benefit of
greater rewards.
Value + Recognition + Thanks
12. Launch Phase
Online Communications Overview
An email announcement and banner on the account sign-
in screen will build awareness and drive customers to the
CLEAR Inner Circle portal site.
Email
Announcement
My Account
Sign-in Screen
Banner
CLEAR Inner Circle
Loyalty Program
Portal Site
13. Email
Customers will be
introduced to the
CLEAR Inner Circle via
an email announcement.
The emails will be
segmented by tier and
notify customers of their
auto-enrollment into a
program tier.
It will invite them to sign
in to their account to
view rewards and be
entered into a
sweepstakes.
17. Program
Details
The Program Details
page provides a
side-by-side rewards
comparison of the
three tiers.
Rolling over a specific
reward will display a
description box with
additional detail.
20. Initial Tiered Approach
* Tier names are placeholders
= Simplicity, ease of implementation and measurement
Platinum 2%
Silver 19%
Basic 71%
• Mid-tier
• 19% of customers
• Not delinquent in past six months
• MRC >$50
• Tenure > 6 mo.
• Eligible for anniversary gift (value related) and
more highly valued partner offers (Yours for the
Asking)
• HVC
• 2% of customers
• MRC >$70
• In contract
• Tenure >1 year.
• Not delinquent on bill
• Auto-enrolled at activation
• 71% of customers
• Motivating
• Broad visibility
• Keeps program low cost
• Packaging existing offers
• Eligible for Low Price Guarantee
• Eligible for 50% off new device on anniversary
date
22. Launch Schedule
Phase 1: Pilot
Launch Pilot 4/13
• Atlanta (69k) + 3 other
Mature Markets
• Limited Rewards
• Integrated w/ MyAccount
and CIM
• Test against control
Phase 2: Roll out
Nationwide launch 9/15
• Measure performance by tiers
• Sweepstakes begins
• Begin work on additional
rewards and site functionality
• Integration of engagement
metrics with CIM begins
• “Build-as-you-go” design
September
April - June
22
Q2 pilot followed by Q3 launch
26. Overview
Research was conducted to:
• Determine which rewards were most preferred
• Assess interest in a “Basic” & “Platinum” tier program
• Collect demographics and satisfaction loyalty drivers
This top line report is based on:
• 875 completed surveys collected from 1/25 – 1/31/2011
2
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Basic Platinum Total Total %
Active 374 44.7% 370 40.4% 744 85.2%
Cancelled 91 10.7% 40 4.1% 131 14.8%
GrandTotal 465 55.4% 410 44.6% 875 100.0%
Top Line Sample Size
27. Reward Ranking
Reward Type
Average
Score
95%
Lower
95%
Upper
1 Free upgrade of device every two years Product 12.82 12.51 13.14
2 Sweepstakes ($100gift card monthly plus other special events) Promotion 9.16 8.76 9.56
3 Anniversary gift ($5off your next month’s bill) Recognition 9.03 8.67 9.39
4 Free activation & shipping when adding a new device or service Product 8.96 8.67 9.24
5 Special discounts for renewing your contract early Product 8.22 7.87 8.57
6 Refer a friend and get a free month of service Promotion 8.09 7.70 8.49
7 Get free trial of new devices or services before you buy Product 7.81 7.48 8.15
8 Free McAfee Security Software Partner 6.01 5.57 6.46
9 Free evaluation of your existing plan to determine ways you can save money Product 5.73 5.37 6.09
10 Free web backup (up to 1GB) Partner 5.13 4.78 5.48
11 Dedicated toll-free support line Service 4.96 4.65 5.27
12 Save $5/month on DirecTV Partner 3.47 3.10 3.84
13 60-days free Netflix (new customers only) Partner 3.26 2.93 3.59
14 Be the first to get the newest devices (pre-order) Product 3.14 2.90 3.38
15 Early notification of new products/services Product 2.11 1.94 2.27
16 $10credit for music content service like MSPOT.com Partner 2.10 1.86 2.34
This table shows which rewards respondents prefer. The average scores have been standardized so they are relative
to one another, e.g., a “12” is twice as preferred as a “6.” The upper and lower limit columns show how some scores
may overlap within a statistical confidence interval.
Please note that these initial rankings include responses from active and cancelled customers.
2
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28. Strong Interest Among Members
Active respondents confirmed strong interest in participating in a
loyalty program by CLEAR.
2
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29. Confirmed by past members
Cancelled respondents confirmed the potential impact of a loyalty
program on their decision to stay with CLEAR.
2
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30. Likelihood to “Join”
Based on the way the program was presented, design of the program is inline with
industry best practices in terms of simplicity, high value, motivating and appealing.
Active customers only.
3
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31. McAfee Loyalty Offerings
• Current Relationship:
• Direct partnership with executed MSA
• We have a few existing customers from legacy contract but software is not currently offered to new customers
• Brand Benefits:
• Recognized leader in internet security and #1 in Malware Detection
• Base Offer Terms:
• McAfee Antivirus Plus 2011 security software (1 computer)
• 6-months of FREE protection for our customers
• 43% discount over retail price for continuation of service
• 25% of recurring service revenue share
• No cost to Clear
• Premium Offer Terms (Top 2%):
• McAfee Total Protection 2011 security software (up to 3 computers)
• 12-months of FREE protection for our premium customers
• 50% discount over retail price for continuation of service
• 45% of recurring service revenue share
• $9 per license cost to Clear
32. Base Offer Revenue Model
Assumptions Outcome
Estimated total free 6-month licenses distributed over
2 Years (adoption of 15% for the 1.2M base over 2
years)
180,000
Annual distribution (spread evenly throughout the
year)
90,000
CLWR Cost per license for 1st 6-months: free offer $0
Post 6-month Trial to Paid (TTP) conversion rate and
renewal rate
50%
post 6-month discounted Sales Price (40% off) upon
conversion
$23.99
Revenue share paid to Clear after year 1 conversions Year 1 = 25% Rev Share of TTP
(90K licenses /50% conversion = 45K
licenses/$24= $1.08M/.25% revenue
share)
$269,900
Revenue share paid to Clear for year 2 conversions
and year 1 renewals
Year 2 = 25% Rev Share of TTP and
of Year 1 Renewals (50% of year 1
license renew, plus 50% of the new year
2 TTP)
$404,800
Clear investment of 180,000 licenses over 2 years $0
Net Revenue to Clear $674,700
33. Premium Offer Revenue Model
Assumptions Outcome
Estimated total MTP licenses distributed over 2
Years
9,000
Annual distribution (spread evenly throughout the
year)
4,500
Cost per license $9.00
Trial to Paid (TTP) for each year (1 and 2) 50%
Post 1 year discounted Sales Price (50% off) $39.99
Renewal percent for year 2 60%
Revenue share paid to Clear after year 1 conversions
Year 1 = 45% Rev Share of TTP
(4.5K licenses /50% renewal = 2,250
licenses/$40= $90,000/.45% revenue
share)
$40,500
Revenue share paid to Clear for year 2 conversions
and year 1 renewals
Year 2 = 45% Rev Share of TTP and
of Year 1 Renewals (60% of year 1 license
renew, plus 50% of the new year 2 TTP)
$64,800
Clear investment of 9,000 licenses over 2 years $(81,000)
Net Revenue to Clear $24,300