1. Strengthening Bonds Driving Stakeholder Commitment 2007 Harris Interactive Employee Engagement and Ambassadorship:How to Achieve Wow Customer Value Delivery Building Employee Commitment to the Companys Product/Service Value Promise, the Organization,and the Customers Michael Lowenstein, PhD CMC Senior Vice President and Senior Consultant Harris Interactive Stakeholder Relationship Consulting David Smallen Senior Vice President and Senior Methodologist Harris Interactive Advanced Methodology

2. Our Perspective and RoleatHarris Interactive Stakeholder Relationship Consulting

Understanding, and helping clients leverage, what drivesstakeholder commitment .Commitment is essential behavior because it is closely linked to key customer/financial metrics

Stakeholders are principally customers (prospective, current, at risk, and former), employees, and channel partners

Based on vast research experience in multiple b2b and b2c business sectors, we have identified behavioral similarities, as well as differences, between these stakeholder groups

Harris Interactive Stakeholder Relationship Consulting has developed a suite of approaches to support clients goals in building and sustaining stakeholder commitment, addressing each stakeholder groups attitudes and behavior, on either an independent or integrated basis.

3. HarrisInteractiveStakeholderRelationship Consulting Concept& Model ofCustomer and Employee Commitment StrengtheningBonds&BuildingRelationships HARRIS INTERACTIVE Loyalty 4.

EMOTIONAL Based on Trust

Sense of personal relationship with brand or company

Reinforced by service experiences

Supported by customer touch points

RATIONAL

Based on Satisfaction

Relationship based on meeting functional expectations

Reinforced by ongoing performance quality

Value for the money

RATIONAL CONNECTIONEMOTIONAL CONNECTION Defining Rational and Emotional Bonds For Customers 5.

EMOTIONAL Based on Trust and Commitment

Sense of personal relationship with company

Participation and contribution, belief in direction

Alignment with culture and values

Opportunities for advancement and growth

Recognition

Job satisfaction

RATIONAL

Based on Satisfaction

Salary and benefits

Safety and environment

Opportunities for advancement and growth

RATIONAL CONNECTIONEMOTIONAL CONNECTION Defining Rational and Emotional Bonds For Employees 6. Linkage of Stakeholder Groups

Customerswho actively (vocal, level of favorability, reduced consideration set, etc.) express their personal commitment to a supplier can be either strongly positive (advocates) or negative (saboteurs).

Employees , similarly, can significantly impact customer loyalty behavior toward their employer through a range of attitudes and behaviors on behalf of the brand, company and customer.These attitudes and behaviors, like customers,range from highly positive to highly negative.

7. Connection of Employee Attitudes and Beliefs to Customer Behavior HARRIS INTERACTIVE Loyalty 8. The Role of People in Leveraging Behavior Why They Can Be So Critically Important 70% 41% 68% ofcustomers LEAVEbecause of poor employee attitude ofcustomers are LOYALbecause of a good employee attitude of customerbrand perception is determined byexperiences with PEOPLE UK retailer: 1% increase in employee commitment = 9% increase in monthly sales Enterprise IG Source: Parkington and Buxton, Study of the US Banking Sector, Journal of Applied Psychologyy Source: MCA Brand Ambassador Benchmark Source: Ken Irons, Market Leader 9. Further Proof Points of Employee Attitude/Action Linkage to Customer Behavior

Northwestern University :Study in hotel chain showed that, for The extent to which employees try to satisfy customers, a 10% increase in this factor resulted in a 22% increase in customer spending per hotel visit.

Sears :Study in 800 stores showed that a 5 percent documented improvement in employee attitudes toward their jobs and commitment to the company directly resulted in a 1.3% increase in customer perceptions toward the retailer and, in turn, a .5% increase year-over-year revenue.

Royal Bank of Canada :Studies have shown that level of employee commitment accounts for 60% to 80% of bank customer satisfaction; and 40% of the difference in how customers view RBCs services can be linked directly to their relationship with bank staff.

10. Mirroring Research: Correlating Employees Perceptions of Value Delivery to Those of Customers HARRIS INTERACTIVE Loyalty 11. Employee Mirror Research: Customer-Supplier Perceptual Gap Profiling

Valuable staff debriefing device

Counterpoint for customer research findings; adds significant, unique insight

Alignment determination is foundation for training and process improvement

Can be utilized for employee incentive and motivation programs

Effective for staff communication continuity

12. Measuring Customer and Staff Alignment Significant misalignment * Based on % 6/7 performance ratings on a 7-point scale 13. Customer Need Importance Perceptual Gaps Relative Importance Of Issue Actual vs. Perceived Customer Needs 14. Nine Employee AmbassadorshipBest Practices

Build a climate of trust and authenticity

Train, train, train (and cross-train in customer sensitivity and value proposition)

Make certain everyone has a career path

Provide frequent evaluations/contribution reviews

Seek to inform, seek to debrief, and be transparent

Recognize and reward customer-focused initiative

Dont just ask employees what they want, provide it

By all means, have fun

Hire the right employees in the first place

Source:Customer WinBack , Jill Griffin and Michael Lowenstein

15. Essence of Employee Ambassadorship

You have to treat your employees like customers.When you treat them right, they will treat your outside customers right.That has been a powerful competitive weapon for us. Herb Kelleher, Co-Founder and former Chairman and CEO, Southwest Airlines

Were talking about a change that puts the people in organizations above everything else.When a company puts its people first, the results are spectacular.Their people are inspired to provide a level of service that truly comes from the heart.Were not saying choose your people over your customers.Were saying focus on your peoplebecauseof your customers.That way, everybody wins. Hal Rosenbluth, former CEO, Rosenbluth International (now part of AmEx Travel-Related Services); co-author ofThe Customer Comes Second

We believe that customer service shouldnt be just a department, it should be the entire company.If you get the culture right, most of the other stuff like great customer service, or building a great long-term brand, or passionate employees and customers will happen naturally on its own .Tony Hsieh, CEO, Zappos

16. Defining the Employee Ambassador Research Framework HARRIS INTERACTIVE Loyalty 17. Employee Research Approaches Employee Satisfaction, Values, and Loyalty Employee Engagement and Alignment Employee Commitment and Ambassadorship (Advocacy) Employee Attitudes and Behaviors Research 18. Definitions of Employee Research Concepts and Methods

Employee Satisfaction and Loyalty Identifies employee attitudes and behaviors leading to job satisfaction and employer loyalty

Employee Engagement and Alignment Identifies employee attitudes and behaviors leading to agreement with, and belief in, overall company mission and objectives, as well as fit, or alignment, and productivity within organizational culture

Employee Ambassadorship Identifies the most active level of employee commitment to the companys product and service value promise, to the company itself, and to optimizing the customer experience.It is linked to, but distinctive from, the productivity and empowerment elements of employee satisfaction, engagement, and alignment research because its emphasis is building customer bonds through employee interaction.

19. Customer Commitment and Advocacy Optimizing Customer Experience and Relationships Linking Customer and Employee Commitment to Business Results Strong Correlation Weak and Intuitive Correlation Customer Loyalty TQ andSatisfaction Employee Commitment and Ambassadorship Employee Engagement and Alignment Employee Satisfaction & Loyalty C U S T O M E R R E S E A R C H E M P L O Y E E R E S E A R C H Now Now 1990s 1990s 1980s and earlier 1980s and earlier 20. Many Ways to Define Employee Engagement

Analysis conducted byThe Conference Boardin 2006 showed that, among twelve leading engagement research companies, there were 26 key drivers, of which eight were common to all:

-Trust and integrity How well do managers communicate and 'walk the talk?

-Nature of the job Is it mentally stimulating day-to-day?

-Line of sight between employee performance and company performance Do

employees understand how their work contributes to the company's performance?

-Career growth opportunities Are there opportunities for growth within the company?

-Pride about the company How much self-esteem do the employees feel by being

associated with their company?

-Coworkers/team members How much influence do they exert on the employees

level of engagement ?

-Employee development Is the company making an effort to develop the employee's

skills?

-Relationship with one's manager Does the employee value relationship(s) with

manager(s), and is there trust and credibility between the levels?

Typically, little or no mention/inclusion of customer or customer focus in measures or analysis employee engagement.

21. Our Framework: The Two Components of Engagement Commitment to Company-Commitment to, and being positive about, the company (through personal satisfaction and an expression of pride), andto being a contributing, and fully aligned, member of the culture . Commitment to Value Proposition- Commitment to, and alignment with, the mission and goals of the company, as expressed through perceived excellence (benefits and solutions) provided by products and/or services 22. Employees That Score High on Commitment to the Company and The Value Proposition Are Considered Engaged Company Value Proposition Engaged 23. Though Engagement is Useful,Employee Ambassadorship is More Actionable 24. The Three Components of Ambassadorship Commitment to Company-Commitment to, and being positive about, the company (through personal satisfaction and an expression of pride), andto being a contributing, and fully aligned, member of the culture . Commitment to Value Proposition- Commitment to, and alignment with, the mission and goals of the company, as expressed through perceived excellence (benefits and solutions) provided by products and/or services Commitment to Customers- Commitment to understanding customer needs, and to performing in a manner which provides customers with optimal experiences and relationships, as well as delivering the highest level of product and/or service value. 25. Employees That Score High on Commitment to the Company, The Value Proposition, and the Customer Are Considered Ambassadors Company Customer Value Proposition Ambassador 26. First Generation Employee Ambassadorship Research Findings September, 2006 HARRIS INTERACTIVE Loyalty 27. Employee Commitment Categories Employee Ambassadors (Advocates) the most active level, representing employees who are strongly committed to the companys brand promise, the organization itself, and its customers.Also, and importantly, they behave and communicate in a consistently positive manner toward the company, both inside and outside. Positive Loyalists employees who exhibit positive feelings about their job and emotional kinship with the company.They are favorable about the company, overall, have every intention of remaining with the company, and actively and positively perform on its behalf.Though their communication about the company to others is infrequent to nil, when they do communicate, the messages are largely positive. Indifferents employees who are generally satisfied with their jobs but rather ambivalent to mildly positive about the company overall, their relationship with it, and its products. They may communicate some generally positive messages about the company to others, but rarely and inconsistently. Disinterested Seatfillers employees who, because of their lack of interest, favorability toward or kinship with the company and its products, either do not communicate positive messages about the company internally or externally, or do not communicate at all.For these minimally involved members of staff, employment with the company is just a job, and very little more. Employee Saboteurs employees who, though still drawing a paycheck from the company, are active, and frequently vocal, detractors about the organization itself, its culture and policies, and its products and services.These individuals are negative advocates, communicating their low opinions and unfavorable perspectives both to peers inside the company and to customers, and others, outside the company 28. Overall Ambassadorship Method Findings * weighted N Employee Ambassadors Positive Loyalists Indifferents Dis-interested Seatfillers Employee Saboteurs Harris Poll Baseline

Overall Full-Time Employees, working for a company

612* 15% 27% 27% 20% 11%

Overall Full-Time Service Employees, working for a company

441* 15% 31% 27% 16% 9% Las Vegas Hotel/Casino

All Employees

2,622 23% 28% 25% 15% 9% 29. Harris Poll Service Employee Baseline ResultsThoughts/Feelings About Company Percent I trust the company I like the company (16%)* (18%)** (20%)* (8%)** * = Top Box % on 5-point description scale ** = Bottom Box % on 5-point description scale Employee Ambassadors Employee Saboteurs 30. Harris Poll Service Employee Baseline ResultsCompany Attributes/Diagnostics Percent The organization is well-managed The organization is focused on attaining the highest quality possible * = Top Box % on 5-point description scale ** = Bottom Box % on 5-point description scale (12%)* (16%)** (25%)* (6%)** The organization is very loyal to its employees (13%)* (16%)** Employee Ambassadors Employee Saboteurs 31. Harris Poll Service Employee Baseline ResultsComparative Assessments (Fram & McCarthy Diagnostics) Percent # of product/ service features we provide Overall product/ service quality * = Percent rating their company Much Better compared to competition (5-point scale) (29%)* (33%) (31%) (29%) (34%) (25%) (30%) Overall value of product/ service Trust among customers Long-term relationships with customers Perceived prestige of the organization Benefits of products/ services to customers Employee Ambassadors Employee Saboteurs 32. Comparisons of Key Results Fram & McCarthy Employee Brand Champions andEmployee Ambassadorship * = Element of employee ambassador technique Low to High Brand Loyalty (Difference in % Points) Saboteur to Ambassador (Difference in % Points) Attitudes Toward Employer

Organization is well-managed

+27 +62

Like the company

+32 +65

Proud to work for company *

+20 +64 (Comparative) Attitudes Toward Employers Products/Services

Number of product/service features

+20 +30

Overall product/service quality

+32 +33

Overall value of products/services

+27 +37

Perceived prestige of organization

+24 +36 33. Mirroring Diagnostic Elements (Top 2 Box Scores 7 Point Scale)

Employee Ambassadors were dramatically more likely to rate Las Vegas Hotel/Casino highly when compared to Saboteurs

Guests are committed to continuing their relationshipwith the hotel Guests are loyal hotel customers Percent Top 2 Box Guests would continue to stay at the hotel because of the high level of personal service they receive Guests would continue to stay at the hotel because of the fun and fulfilling experience it provides Guests would continue to stay at the hotel because of the value of what they receive for the price Guests would continue to stay at the hotel because of the exceptional quality of the experience Guests All Employees Employee Ambassadors Employee Saboteurs 34. Swing Voter Analysis HARRIS INTERACTIVE Loyalty 35. Swing Voter Analysis of Employee Ambassadorship

Swing voter analysis for employees, as it does in politics, deals with how to move the undecided and leaning voters into the desirable camp and how to avoid moving them into the undesirable camp.

In this case the desirable camp is the Employee Ambassador group and the undesirable camp is the Employee Saboteur group.

• In particular, this analysis shows how to move the Indifferents, the middle group, into the Ambassador camp.

• It also shows which attributes put at risk the same middle group, the Indifferents,that are closest to becoming Saboteurs

36. Ambassador/Saboteur Swing Voter Analysis Saboteurs Indifferents EmployeeAmbassadors What turns indifferent employees into ambassadors? What turns indifferent employees into saboteurs? Swing Voters 37. Swing Voter Analysis Importance Scores for Selected Attributes (Swing Up To Ambassadors, Swing Down To Saboteurs) Delighters Dissatisfiers Dual effects SwingUp Swing Down I trust the hotel 28% 4% My work gives me a sense of personal accomplishment 8% 4% The hotel is focused on attaining the highest quality possible 7% - Overall value of service provided 6% 23% I very much enjoy doing my job 6% 10% I feel a lot of stress at work 6% 6% The hotel is very loyal to its employees 6% 2% My immediate supervisor 4% - The hotel will do whatever it takes to makes guests happy 4% - I have a clear understanding of the hotels mission, goals, and objectives 2% 13% The extent of diversity of co-workers - 8% I am very committed to my work 2% 5% 38. Second Generation Employee Ambassadorship Results, Spring, 2008 HARRIS INTERACTIVE Loyalty 39. Ambassadorship Groups By Selected industries (Sorted by % Ambassadors) Total Base = 4,312Industry N >/= 70) Industry Unconnected Indifferent Ambassadors Total N Total % Religious /Non-Profit Organizations 12.8 55.6 31.6 117 100 Construction (heavy/special trades) 24.3 47.3 28.4 74 100 Legal Services 26.4 50.6 23.0 87 100 Insurance 23.2 58.5 18.3 82 100 Banking and Finance 28.2 55.0 16.8 131 100 Healthcare and Social Assistance 27.3 56.2 16.5 557 100 Engineering Services 31.5 52.2 16.3 92 100 Other Services 32.5 51.2 16.3 166 100 Education 25.2 58.5 16.2 702 100 Technology Services 25.5 59.1 15.4 149 100 Retail Trade 36.9 51.2 11.8 287 100 Arts, Entertainment, and Recreation 22.9 65.7 11.4 70 100 Public Administration /Government 30.5 58.7 10.8 223 100 Accommodation and Food Services 36.0 53.5 10.5 114 100 Manufacturing 37.5 52.9 9.6 293 100 Telecommunications 31.1 59.5 9.5 74 100 Transportation and Warehousing 40.0 51.0 9.0 100 100 Administrative Support Services 36.5 58.4 5.1 137 100 40. Validation 41. Employee Loyalty* By Ambassadorship Group *PLS factor of the following three metrics: Saboteur Indifferent Ambassador Total Low 61.0 3.2 0.0 19.8 Medium 38.5 84.3 27.3 61.9 High 0.5 12.5 72.7 18.3 Total 100 100 100 100 42. How Often Say Good Place/Bad Place To Work by Ambassadorship Groups Good Place To Work BadPlace To Work Saboteur Indifferent Ambassador Total Rarely/Never 55.5 7.0 0.9 20.4 Sometimes-Very Often 42.4 63.6 13.4 49.6 Almost Always/Always 2.1 29.4 85.7 30.1 Total 100 100 100 100 Saboteur Indifferent Ambassador Total Rarely/Never 50.5 86.5 98.1 77.7 Sometimes-Very Often 42.3 13.0 0.7 19.8 Almost Always/Always 7.1 0.5 1.2 2.6 Total 100 100 100 100 43. How Often Say Good/Bad Products/Services by Ambassadorship Groups Good Products/ Services Bad Products/ Services Saboteur Indifferent Ambassador Total Rarely/Never 46.0 7.9 1.6 18.1 Sometimes-Very Often 50.3 65.7 20.1 54.1 Almost Always/Always 3.8 26.5 78.2 27.8 Total 100 100 100 100 ambass1 Total Saboteur Indifferent Ambassador Total Rarely/Never 64.9 88.9 97.3 83.1 Sometimes-Very Often 31.6 10.5 1.0 15.3 Almost Always/Always 3.5 0.5 1.6 1.6 Total 100 100 100 100 44. Examples of Corporate Employee Ambassadorship Programs

Zappos

-One of the companys 10 core values is Deliver WOW Through Service,and the culture is focused on building the best customer experiences.

Eastman Kodak

-Companys FAST (Focus, Accountability, Simplicity and Trust) program has been designed to drive growth by requiring all employees to treat everyone internal and external as a customer

Hewlett-Packard (Harris Interactive client)

-Several times a year, HP Demo Days program has current/retired employees volunteer and train to spend days at local electronic retailers as company brand ambassadors

NCR (Harris Interactive client)

-Ambassadorship program created to drive customer loyalty and advocacy, and enhanced company culture, for customer-facing and non customer-facing employees.Employees are recruited and trained in customer interaction soft skills, and NCR overall company and brand information.Program participants are also required to report back on their experiences as ambassadors.

45. Best In Class Customer Service Directly Linked to Business Results Leadership engagement Customer and Employee Linkage Model Creating Employee Ambassadors Employee Ambassadors Engaged Employees Employees An Ambassador is an employee who promotes NCR bothinternally and externally Creating Customer Advocates Customer Advocates Satisfied Customers Customers An Advocate is an customer who promotes NCR within or beyond their own company 46. Services Survey: Category Impact on CommitmentTotal Respondents 4 47. Ambassador Program Summary

Currently open to all Services employees

• Special invitations to those identified via survey

2-3 hour initial training requirement to become an ambassador

• Training Covers: Ambassadorship, in general and at NCR; Company information, including branding; Customer Interaction soft skills Customer Service, Professionalism, Communication skills

• Welcome letter, gift, and access to SharePoint site provided upon completion of training

Expectations of Ambassadors

• Participation in ambassador opportunities PR, Marketing, Community Relations, Internal Communications (based on availability)

• Incorporate ambassadorship into everyday activities

• On-going training

• Periodic reporting back

Benefits for Ambassadors

• Welcome gift

• Broad and sometimes advanced access to information

• Special ambassador events and professional development opportunities

• Reward program to acknowledge extraordinary contributions

Launched 1/19/09

350+ Employees Signed Up to Date

48. Nine Employee AmbassadorshipBest Practices

Build a climate of trust and authenticity

Train, train, train (and cross-train in customer sensitivity and value proposition)

Make certain everyone has a career path

Provide frequent evaluations/contribution reviews

Seek to inform, seek to debrief, and be transparent

Recognize and reward customer-focused initiative

Dont just ask employees what they want, provide it

By all means, have fun

Hire the right employees in the first place

Source:Customer WinBack , Jill Griffin and Michael Lowenstein

49. Concluding Thought

Every Honeywell employee is a brand ambassador.With each

customer contact, and whenever we represent Honeywell, we

have the opportunity to either strengthen the brand or cause it

to lose some of its luster and prestige.Generations of Honeywell

employees have built our powerful brands with their hard work,

spirit of innovation, passion for quality, and commitment to

customers.I am counting on every Honeywell employee to

continue that legacy.

Message from

David Cole, Chairman and CEO

Honeywell International, Inc.

August, 2004

to companys 120,000+ employees

50. Based on Ambassadorship Research, What Actions Should Companies Be Taking?

Employees, at all levels and in all functions, need to have a thorough understanding of what is important to customers so that their actions match customer expectations and performance requirements.

Employees behavior needs to be aligned around positive customer experiences and customer loyalty.

Management must build processes, technology, training, and organizational/cultural practices that support employees being able to optimize customer experience.

Companies should evaluate the effectiveness of metrics associated with delivering customer value financial and non-financial performance, addressing customer life cycle, amount of cross-functional collaboration to support customers.