building the integrated broadband communication services group · building the integrated broadband...

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France Telecom investor day, June 10th 2004:France Telecom investor day, June 10th 2004:

Building the integrated broadband communication services Group

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Sales & ServicesSales & Services

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Has something changed in the value chain?Has something changed in the value chain?

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AgendaAgenda

!! WhyWhy a Sales & Services Division?a Sales & Services Division?

!! N°1 for sales N°1 for sales and and services in Franceservices in France

!! Benefits from Benefits from an an integrated integrated modelmodel

!! 2004 initiatives2004 initiatives

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Why a Sales & Services Division?Why a Sales & Services Division?

!! ControlledControlled distribution distribution –– Key for Key for retaining share retaining share of value on of value on maturing marketsmaturing markets

–– FasterFaster services services launchlaunch

–– FasterFaster diffusion of new servicesdiffusion of new services

–– Faster customer learningFaster customer learning of new of new features features

!! High tech requires high touch High tech requires high touch

!! Enabling customerEnabling customer interface for interface for customized offerscustomized offers

In current markets, sales and services becomes a central asset

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FT shopsFT shops

©© France France TelecomTelecom

A standalone Division for sales and services

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Why a Sales & Services Division?Why a Sales & Services Division?

!! By By implementing the integrated operator implementing the integrated operator modelmodeleach product each product line line benefits frombenefits from::

–– Better marketBetter market intelligenceintelligence

–– Stronger brandingStronger branding

–– ImprovedImproved sales sales effectiveness and versatilityeffectiveness and versatility

–– Integrated customerIntegrated customer supportsupport

–– Shared costsShared costs

–– Develop Develop usageusage

A key lever for FT's integrated operator strategy

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Poland" 192 own TP shops" 25 own Centertel

shops

Belgium" 2 own Mobistar shops" 122 Mobistar exclusive

affiliated retailers

United Kingdom" 248 own Orange shops

International footprint summaryInternational footprint summary

France" 620 own FT shops" 106 Orange exclusive

affiliated retailers

Already 1,315 controlled shops in four countries

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Roadmap and objectivesRoadmap and objectives

!! Reconfigure for Reconfigure for better integration and better integration and efficienciesefficiencies–– France France fully integrated fully integrated by by year year end 2005end 2005–– RollRoll--out out integration internationallyintegration internationally

!! Expand retail Expand retail network network coverage coverage in France in France –– New shop formats to New shop formats to be introducedbe introduced–– From From 620 to 800 620 to 800 shops shops by by year year end 2006end 2006

!! ApplyApply TOP TOP program program to to customer facing customer facing –– 8 TOP 8 TOP projects launchedprojects launched

FT differentiates from competition also on Sales and Services

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AgendaAgenda





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Mobis tore

Orange Orange

“700”“700”

HotlineHotlineOrange Orange

HotlineHotlineWanadoo Wanadoo

orange.orange.frfr

wanadoowanadoo..frfr

Outbound Outbound call centers call centers

Outlets Outlets On lineOn line

Call centersCall centers

Interacting with customers the way they wantInteracting with customers the way they want

In France 47% of persons aged 15+ interacted with France Telecom in 2003* *Source: CSA, Oct. 2003

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The n°1 sales and customer support network in the French mass marketThe n°1 sales and customer support network in the French mass market

Own shopsOwn shops 620 FT shops620 FT shops5,800 5,800

salespeoplesalespeople

AffiliatesAffiliates 106 Orange exclusive affiliated retailers106 Orange exclusive affiliated retailers

Inbound callsInbound calls Orange Orange “700”“700”

8,1008,100representativesrepresentatives

Outbound callsOutbound calls

orange.orange.fr fr wanadoowanadoo..frfr

voila.voila.frfr

Call centers for Mass marketCall centers for Mass market

On line salesOn line sales

13,900 customer representatives serving the French mass market

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Online sales propertiesOnline sales properties

# of contacts # of contacts per month per month

Full GroupFull Groupproduct line ~ 1.8 Mproduct line ~ 1.8 M

Fixed lineFixed lineuniverse ~ 2.5 Muniverse ~ 2.5 M

orange.orange.frfr ~ 2.1 M

Number 1 for audience in France

Mobile universeMobile universe

wanadoowanadoo..frfr

~ 2.1 M

~ 9.5 MInternet universeInternet universe

~ 9.5 M

ConsumerConsumerelectronicselectronics

voila.voila.frfr ~ 6.5 M~ 6.5 M

0.5 M0.5 M

InfotainmentInfotainmentuniverse ~ 2 M~ 2 Muniverse

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The n°1 sales & customer support networkin the French Enterprise market*The n°1 sales & customer support networkin the French Enterprise market*

Sales & supportSales & supportSales teams with customerSales teams with customer--dedicated salespersons and dedicated salespersons and

support personnelsupport personnel

Inbound callsInbound calls Enterprise Call CentersEnterprise Call Centers

4,200 4,200 representatives representatives facing 280,000 facing 280,000

Enterprise Enterprise sites with sites with telecom telecom

decisiondecision--makersmakers

Outbound callsOutbound calls Enterprise Call CentersEnterprise Call Centers

Self careSelf care «« Canal WebCanal Web »»

* Excluding the * Excluding the CorporatesCorporates segment, but some tasks done on behalf of the segment, but some tasks done on behalf of the CorporatesCorporates segmentsegment

In-depth knowledge of telecom decision makers

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©© Patricia Patricia Dufrien Dufrien / France / France TelecomTelecom©© Patricia Patricia Dufrien Dufrien / France / France TelecomTelecom

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©© Patricia Patricia Dufrien Dufrien / France / France TelecomTelecom

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Technical support & field engineeringTechnical support & field engineering

CustomerCustomer CareCare

Orange &Orange & Wanadoo HotlinesWanadoo Hotlines

Hot lines

Fixed Fixed lineline

hot hot lineslines

5,500 5,500 representativesrepresentatives

orange.orange.fr wanadoofr wanadoo..frfr

1,600 1,600 representativesrepresentatives

Self care

Installation & maintenanceInstallation & maintenanceField engineeringField engineering11,100 11,100

representativesrepresentatives

18,200 representatives providing local service, anywhere in France

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Orange Distribution highlightsOrange Distribution highlights

!! 600 people 600 people dedicated dedicated to to increase increase sales of FT sales of FT products products in in competitive channelscompetitive channels

!! More More than than 4,000 point of sales 4,000 point of sales visitedvisited

!! ContractsContracts withwith main main retailersretailers

–– Best Sales ForceBest Sales ForceFT = 7.7FT = 7.7 CompetitorCompetitor n°1 = 7.2n°1 = 7.2 CompetitorCompetitor n° 2 = 7.1n° 2 = 7.1

–– Best Distribution Best Distribution hotlinehotlineFT= 7.1FT= 7.1 CompetitorCompetitor n°1 = 6.7n°1 = 6.7 CompetitorCompetitor n° 2 = 6.6n° 2 = 6.6

*Source: CSA, June 2004*Source: CSA, June 2004

Orange Distribution best rated by 650 Points of sales*

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AgendaAgenda





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Benefits for the Group (1/2)Benefits for the Group (1/2)

!! Market intelligenceMarket intelligence–– Capacity to listen to the voice of the customer & collect marketCapacity to listen to the voice of the customer & collect market intelligence intelligence

at the local levelat the local level

!! BrandingBranding–– Brand awareness of France Telecom shops: Brand awareness of France Telecom shops: 97% for 97% for FixedFixed, 90% for , 90% for

Mobile, 79% for Internet Mobile, 79% for Internet (Source: CSA, Oct. 2003)(Source: CSA, Oct. 2003)

!! Sales effectiveness and versatilitySales effectiveness and versatility–– Coverage of all retail and customer care formats, each potentialCoverage of all retail and customer care formats, each potentially capable ly capable

of selling the whole Group product offeringof selling the whole Group product offering–– Capacity to target fineCapacity to target fine--grained customer segments or individual grained customer segments or individual

customers with tailored solutions, not only productscustomers with tailored solutions, not only products–– Capacity to launch marketing campaigns at very short noticeCapacity to launch marketing campaigns at very short notice

Each product line benefits from:Each product line benefits from:

40% - 45% of Orange France gross adds captured by FT shops55% - 60% of Wanadoo gross adds captured by FT shops and call centers

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Benefits for the Group (2/2)Benefits for the Group (2/2)

!! Sales effectiveness and versatility (continued)Sales effectiveness and versatility (continued)–– Additional contact and crossAdditional contact and cross--selling opportunitiesselling opportunities–– FT retail network own initiatives to stimulate customer visits iFT retail network own initiatives to stimulate customer visits in n

shops (accessories, Training coaches, thematic inshops (accessories, Training coaches, thematic in--store campaigns, store campaigns, etc.)etc.)

!! Customer supportCustomer support–– Trusted advice and reliable customer support, also provided to Trusted advice and reliable customer support, also provided to

indirect channel customersindirect channel customers–– Usage stimulation through customer training in shops (Training Usage stimulation through customer training in shops (Training

coaches, etc.)coaches, etc.)

!! CostsCosts–– Better match between customer value and contact channelsBetter match between customer value and contact channels–– Retail costs shared with the other product lines, within armRetail costs shared with the other product lines, within arm--length length

distribution contracts distribution contracts –– Lower churn in average vs. purely indirect channelsLower churn in average vs. purely indirect channels–– Leverage when negotiating with indirect channelsLeverage when negotiating with indirect channels

Each product line benefits from:Each product line benefits from:

*Source: CSA, Oct. 2003*Source: CSA, Oct. 2003

In France, one person aged 15+ out of threevisited France Telecom shops in 2003

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FT stores: Fixed line, Mobile and Internet products in a single placeFT stores: Fixed line, Mobile and Internet products in a single place

©© France France TelecomTelecom

A "One stop" shop concept

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AgendaAgenda





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2004 key initiatives

!! Moving toward a more integrated sales & service network Moving toward a more integrated sales & service network in Francein France–– First pilot in the Paris areaFirst pilot in the Paris area

!! Consumer marketConsumer market–– Densification and relocation of shopsDensification and relocation of shops–– Orange: Expand controlled distribution for best customer Orange: Expand controlled distribution for best customer

experienceexperience–– Implement a needs based segmentationImplement a needs based segmentation–– Develop selfDevelop self--care usagecare usage

!! SME marketSME market–– Leverage CRM nowLeverage CRM now

2004 key initiatives

!! “Customer facing” TOP initiative“Customer facing” TOP initiative

!! Implement best practices in Distribution marketingImplement best practices in Distribution marketing

Capturing economies of scale and scope

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Integration in progress: current situationIntegration in progress: current situation

OrangeOrange

Sales & Services in France

WanadooWanadoo

OrangeOrangeWanadooWanadoo



Some coordination between dispersed assets

Fixed InternetInternet MobilesMobiles

Direct SalesDirect Sales

Indirect SalesIndirect Sales

Customer Customer &&TechnicalTechnicalSupportSupport

OutboundOutboundcallscalls

Self CareSelf Care

Field engineeringField engineering

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Integration in progress: year end 2004 planIntegration in progress: year end 2004 plan

Sales & Services in France

Customer Customer &&TechnicalTechnicalSupportSupportOutboundOutboundcallscalls

Self CareSelf Care

PersonalPersonal

PersonalPersonal

PersonalPersonal

PersonalHome

Direct Direct andandIndirect Indirect SalesSales

Field engineeringField engineering

A first step towards a full integrated sales & services network

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First pilot scheme in the Paris area

!! Common customer service for Home and PersonalCommon customer service for Home and Personal–– 50,000 Paris customers in pilot scheme50,000 Paris customers in pilot scheme–– Global view of customers and their uses Global view of customers and their uses –– Global view of products: Fixed, Mobile, Internet, TVGlobal view of products: Fixed, Mobile, Internet, TV–– Incentives for cross sellingIncentives for cross selling–– Objective is to improve customer loyaltyObjective is to improve customer loyalty

!! High potential customersHigh potential customers–– Intensive users, whether mono or multiIntensive users, whether mono or multi--productsproducts

!! Various service offersVarious service offers–– Global customer assistanceGlobal customer assistance–– Single point of contactSingle point of contact

First pilot scheme in the Paris area

Integration for customer benefit and usage centricity

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Densification and relocation of shops

!! Add new shops in high customer traffic areasAdd new shops in high customer traffic areas–– approx. 50 net new shops opened in 2004approx. 50 net new shops opened in 2004–– approx. 90 net new shops planned in 2005approx. 90 net new shops planned in 2005–– approx. 40 net new shops planned in 2006approx. 40 net new shops planned in 2006

>> from 620 to 800 shops planned by end 2006from 620 to 800 shops planned by end 2006

!! Relocate 35 to 40 shops in 2004 for increased customer Relocate 35 to 40 shops in 2004 for increased customer traffictraffic

!! Implement new formats for relocated shops and new Implement new formats for relocated shops and new openingsopenings–– Type 1: multimedia stores with 150 mType 1: multimedia stores with 150 m22 eacheach–– Type 2: 80 mType 2: 80 m22 eacheach–– Type 3: 45 mType 3: 45 m22 eacheach

Densification and relocation of shops

New shops will be more profitable than the average existing ones

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New multimedia stores showcasing the Group integrated offerNew multimedia stores showcasing the Group integrated offer

Stimulate Stimulate adoption adoption of of multimulti--access access

devices anddevices andservicesservices

StimulateStimulateadoption of adoption of new uses new uses through through

customer customer coachingcoaching

Innovative store format for capturing better shareof high value customers

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FT stores: increase presence in high traffic shopping zones and where customer resideFT stores: increase presence in high traffic shopping zones and where customer reside

©© France France TelecomTelecom ©© France France TelecomTelecom

City centre shopCity centre shopShopping centre shopShopping centre shop

Redesigned store formats for consolidating market shareof residential customers

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FT retail network own initiatives to stimulate customer visits in shopsFT retail network own initiatives to stimulate customer visits in shops

©© France France TelecomTelecom©© France France TelecomTelecom

Increase Increase satisfaction satisfaction andand usage usage through demosthrough demos

Increase Increase revenues revenues and margin and margin by by selling accessories and multimedia selling accessories and multimedia

peripheralsperipherals

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Develop self-care usageDevelop self-care usage

!! 3000 voice portal3000 voice portal–– Improve the effectiveness of customer interface through Improve the effectiveness of customer interface through

unstructured speech recognitionunstructured speech recognition–– Stimulate sale of servicesStimulate sale of services

## Investigate, subscribe, check, use, activateInvestigate, subscribe, check, use, activate

!! francetelecomfrancetelecom.com Internet portal.com Internet portal––Stimulate sale of products and servicesStimulate sale of products and services–– Stimulate audience to capture lower value contactsStimulate audience to capture lower value contacts–– Encourage onEncourage on--line bill presentment and paymentline bill presentment and payment–– Stimulate usage with onStimulate usage with on--line user guides and operation manualsline user guides and operation manuals

## Investigate, purchase / subscribe, check, payInvestigate, purchase / subscribe, check, pay

Driving higher-value contacts to FT representatives

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Towards self-care integrationTowards self-care integration

Communication Services Communication Services && HighHigh Tech SalesTech Sales

Web

Culture &Culture & Leisure Leisure ProductProduct SalesSales

FixedFixed Line Service, SalesLine Service, Sales& Configuration& Configuration

WebWap

Phone

Phone

WebSelfSelf--carecare

Integration for customer benefit

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Leverage CRM now on the Enterprise marketLeverage CRM now on the Enterprise market

4,700 France Telecom representatives better serving150,000 Enterprise customers through CRM

150,000 150,000 customerscustomers

Specialist Salespeople& Technical Support

Billing & claimsCall center

800 representatives800 representatives


Sales Administration



Outbound call center

2,500 representatives2,500 representatives

Generalist Sales Team


Marketing Campaign Managers


Inbound call centers

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Customer facing TOP initiative

!! Overall objectiveOverall objective–– Reach bestReach best--inin--class operational performance levelsclass operational performance levels–– Drive operational performance for market powerDrive operational performance for market power–– Allocate resources for best market return : sales, profitabilityAllocate resources for best market return : sales, profitability, ,

customer loyaltycustomer loyalty

!! Eight TOP “Eight TOP “chantierschantiers””–– Operational excellence of Customer Relationship ServicesOperational excellence of Customer Relationship Services–– Optimize Retail Points of SalesOptimize Retail Points of Sales–– Increase Sales force efficiency in Enterprise Branch OfficesIncrease Sales force efficiency in Enterprise Branch Offices–– Join Sales & Services forces in SpainJoin Sales & Services forces in Spain–– Join Sales & Services forces in PolandJoin Sales & Services forces in Poland–– Join Sales & Services forces in the UKJoin Sales & Services forces in the UK–– Join Sales & Services forces in the NetherlandsJoin Sales & Services forces in the Netherlands–– Marketing spend effectivenessMarketing spend effectiveness

Customer facing TOP initiative

Applying TOP discipline for better Sales & Services operational performance

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Conclusion: expected resultsConclusion: expected results

!! Position Sales & Services as the provider who Position Sales & Services as the provider who best responds to customer needs through best responds to customer needs through integrated solutions with superior customer integrated solutions with superior customer support and coaching support and coaching

!! Further develop Further develop crosscross--sellingselling & & cost synergiescost synergiesin direct channels & better cooperate with in direct channels & better cooperate with indirect channelsindirect channels

!! RollRoll--out integrated Sales and Services model out integrated Sales and Services model internationallyinternationally

A key lever of FT group performance

building the integrated broadband communication services group · building the integrated broadband...

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