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Brand portfolio Spain , Argentina , Chile , Uruguay , Peru , Ecuador , Venezuela , Colombia, Mexico , Guatemala , Panamá , El Salvador , Costa Rica and Nicaragua United Kingdom and Germany Brazil

O 2 (Telefónica UK Ltd) around • Starts operating in 2006 • We were createdinsight. a simple customer That mobile's are as • Has 25 million mobile essential to us as our customers wallet and keys. And it's never been truer than it is • Has been independently today. It was the recognised by Ofcom as the foundation of our name, our logo and our brand mobile operator with the identity. But our brand's highest customer service way more than that. We've created a whole O 2 world satisfaction that means everything we do looks, feels and sounds like O 2.

Telefonica O 2 ’s Priority Moments has become one of the UK’s fastestgrowing loyalty programmes and cut customer churn considerably.

Objectives v Make Priority Moments the best and most-used mobile loyalty programme in the UK v Reach and reward more O 2 customers - 2011 - acquire 1. 5 million customers - 2012 - acquire 4 million customers v Drive more frequent engagement - 30% using every week v Drive customer advocacy (Customer Service Impact – CSI) of O 2 and reduce churn v Drive positive brand perceptions - consideration, attractiveness and value for money

Our audience: Age: 16 -35 well oriented in the Digital Environment live in a world of information appreciate the time and high quality - always stay in touch

Customer Touchpoints Become aware v Learn about Priority Moments (Press/Media/ Advertisement) Dowland Use service v Registration and use all of the v Install the programs program on rewards mobile v (purchase phone tickets, food, clothes) Successful client Refer v Active v Recommen participant of d this Priority Program to Moments friends and rewards every colleges day in his v Sharing personal and consumer business life experience v ( loyal on Social customer) Media

Describe/measure CX. The Priority Moments journey begun by talking to O 2 customers to understand what really mattered to them. This insight informed the structure and content of the Priority Moments programme and continues to do so with on-going bespoke research, social media tracking and behavioral analysis. We used both qualitative focus research and quantitative research into customer preferences, behavior and identified all the things that mattered to them: v Their favourite brands v Moments when they needed a boost e. g. Monday mornings, or the last few weeks of the school holidays v Celebratory moments e. g. birthdays (personal or anniversary of being with O 2)

1. Extraordinary moments • To celebrate the Jubilee: a free pair of Union Jack flip flops from BHS. • An upgrade on the Heathrow Express and an airport lounge pass. • A free lunch with Priority Moments at a popular food chain. • The chance to get a new game or DVD release before anyone else at HMV These are unmissable experiences, content and rewards that can’t be found anywhere else, which create extraordinary moments for thousands of customers, rather than just a lucky few:

2. Extraordinary offers These consist of exclusive offers giving O 2 customers real value and savings on everyday items and more occasional treats. Buy one pair of shoes at Office for the party season, get another pair for free. £ 1 for a pizza and unlimited salad at Pizza Hut. 20% off at Toni & Guy hair salons 50% off movie tickets at Odeon. Four free Millie’s Cookies.

3. To say thank-you Targeted rewards based on value segment are sent to thank O 2 customers for their loyalty on their two-year anniversary with O 2 when NPS typically dips, or just to surprise them. Customers are targeted via SMS/ MMS and collect their personal ‘thank-you’ via the Priority Moments app, or mobile web site: A Caffè Nero iced coffee on a hot day just to say thank-you. A £ 5 -£ 20 mobile gift card to spend at Debenhams. A handpicked gift box from Hotel Chocolat.

4. Headline moments This is a package of unmissable rewards to create excitement and a sense of urgency at a key moment such as Christmas, where O 2 can help customers make the most of the festive season. Exclusive shopping events at Bluewater shopping centre. Christmas master-class with renowned chef Jean. Christophe Novelli https: //www. youtube. com/watch? v=yc 3 X 5 p. OIQm. E

Customer experience Mark: “O 2 do still give loyalty discounts to certain customers I don't know why it's only certain ones though it really should be all or nothing” Rose : “This is obviously not right and displays double standards. I know, no one is obliged to have loyalty bonus but if a firm starts dealing an individual preferably over others that too without any criterion then surely that organisation can't be trusted. ”

Conclusive results Increase advocacy of O 2 and reduce churn • the initiative generated significant incremental churn benefit, saving millions across all Priority Moments-registered customers; • heavily-active users have a much lower annualised churn; • registered customers with low active use saw a churn reduction ; • positive CSI, with scores much higher that those not aware; Reach and reward more customers • registrations doubled in 2012, making it the UK’s fastest-growing loyalty program; • over one billion offers have been viewed to date; • 75 offers are viewed every second of the day. Registrants with Priority Moments • In 2012, registrants of Priority Moments increased over 100%. Frequent engagement with Priority Moments • In 2012, Priority Moments’ active base (those customers that used Priority Moments at least once in the last 30 days) doubled.

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