The Value of Consumer Engagement

1. <?xml version="1.0"?><AllQuestions /> <?xml version="1.0"?><Settings><answerBulletFormat>Numeric</answerBulletFormat><answerNowAutoInsert>No</answerNowAutoInsert><answerNowStyle>Explosion</answerNowStyle><answerNowText>Answer Now</answerNowText><chartColors>Use PowerPoint Color Scheme</chartColors><chartType>Horizontal</chartType><correctAnswerIndicator>Checkmark</correctAnswerIndicator><countdownAutoInsert>No</countdownAutoInsert><countdownSeconds>10</countdownSeconds><countdownSound>TicToc.wav</countdownSound><countdownStyle>Box</countdownStyle><gridAutoInsert>No</gridAutoInsert><gridFillStyle>Answered</gridFillStyle><gridFillColor>0,0,0</gridFillColor><gridOpacity>100%</gridOpacity><gridTextStyle>Keypad #</gridTextStyle><inputSource>Response Devices</inputSource><multipleResponseDivisor># of Responses</multipleResponseDivisor><participantsLeaderBoard>5</participantsLeaderBoard><percentageDecimalPlaces>0</percentageDecimalPlaces><responseCounterAutoInsert>No</responseCounterAutoInsert><responseCounterStyle>Oval</responseCounterStyle><responseCounterDisplayValue># of Votes Received</responseCounterDisplayValue><insertObjectUsingColor>Blue</insertObjectUsingColor><showResults>Yes</showResults><teamColors>User Defined</teamColors><teamIdentificationType>None</teamIdentificationType><teamScoringType>Voting pads only</teamScoringType><teamScoringDecimalPlaces>1</teamScoringDecimalPlaces><teamIdentificationItem></teamIdentificationItem><teamsLeaderBoard>5</teamsLeaderBoard><teamName1></teamName1><teamName2></teamName2><teamName3></teamName3><teamName4></teamName4><teamName5></teamName5><teamName6></teamName6><teamName7></teamName7><teamName8></teamName8><teamName9></teamName9><teamName10></teamName10><showControlBar>Slides with Get Feedback Objects</showControlBar><defaultCorrectPointValue>100</defaultCorrectPointValue><defaultIncorrectPointValue>0</defaultIncorrectPointValue><chartColor1>187,224,227</chartColor1><chartColor2>51,51,153</chartColor2><chartColor3>0,153,153</chartColor3><chartColor4>153,204,0</chartColor4><chartColor5>128,128,128</chartColor5><chartColor6>0,0,0</chartColor6><chartColor7>0,102,204</chartColor7><chartColor8>204,204,255</chartColor8><chartColor9>255,0,0</chartColor9><chartColor10>255,255,0</chartColor10><teamColor1>187,224,227</teamColor1><teamColor2>51,51,153</teamColor2><teamColor3>0,153,153</teamColor3><teamColor4>153,204,0</teamColor4><teamColor5>128,128,128</teamColor5><teamColor6>0,0,0</teamColor6><teamColor7>0,102,204</teamColor7><teamColor8>204,204,255</teamColor8><teamColor9>255,0,0</teamColor9><teamColor10>255,255,0</teamColor10><displayAnswerImagesDuringVote>Yes</displayAnswerImagesDuringVote><displayAnswerImagesWithResponses>Yes</displayAnswerImagesWithResponses><displayAnswerTextDuringVote>Yes</displayAnswerTextDuringVote><displayAnswerTextWithResponses>Yes</displayAnswerTextWithResponses><questionSlideID></questionSlideID><controlBarState>Expanded</controlBarState><isGridColorKnownColor>True</isGridColorKnownColor><gridColorName>Yellow</gridColorName><AutoRec></AutoRec><AutoRecTimeIntrvl></AutoRecTimeIntrvl><chartVotesView>Percentage</chartVotesView><chartLabelsColor>0,0,0</chartLabelsColor><isChartLabelColorKnownColor>True</isChartLabelColorKnownColor><chartLabelColorName>Black</chartLabelColorName><chartXAxisLabelType>Full Text</chartXAxisLabelType></Settings> <?xml version="1.0"?><AllAnswers /> The Value of Consumer Engagement

2. Trade Marketing - Consumer Engagement • Value of Consumer Engagement • Why spend time on CE training? • What does success look like? • Who is being trained? • Value of coaching CE throughout the organization • Future of Consumer Engagement

3. Retail-Current State • 5 P Execution • Presence • Pricing • Promotion • Product Availability • Personal Selling

4. Looking Forward Inevitably our markets are going to change • Restrictions mean less opportunity for our 5 P’s

5. Retail-Future State

6. Imagine a world where…. • 5 P Execution • Presence • Pricing • Promotion • Product Availability • Personal Selling

7. Imagine a World Where…… • As we move forward we see 2 P’s as becoming increasingly more important • Product Availability • Personal Selling

8. Where Do We Go From Here? And more importantly, How do we take advantage of the opportunity that CHANGE provides?

9. Introductions Course Structure House Rules Expectations

10. Learning Objectives Products in Conversation Coaching & Feedback Role Plays Brand Stories Objections

11. Coaching & Feedback Setting the Stage

12. Peer to Peer Coaching & Feedback • Giving Coaching: • Don’t apologize – it’s a GIFT! • Talk directly to the participant • Balance strength with what they could do different • Discuss specific examples • Discuss changeable behavior • Provide examples of new behavior • Provide feedback in positive and honest manner • Receiving Feedback: • Be open minded • Listen & don’t interrupt • Balanced listening – hear strengths! • Take notes on “ah-has!” • Practice new behavior immediately • Time Out

13. Real World Compliance Procedural Guidelines

14. Procedural Guidelines R.J. Reynolds Commitment R.J. Reynolds is committed to its core principle that the decision to use tobacco is one that should be made only by adults and RJRT markets its products only to tobacco consumers who are of legal tobacco consuming age. Each state determines the age an adult must be in order to legally purchase tobacco. However, an ATC must be at least 21 years of age in order to participate in consumer engagement.

15. Procedural Guidelines • If an ATC 21+ has one of the four acceptable forms of identification, that identification must be currently valid (i.e., it cannot be expired) • In addition, the person conducting the consumer engagement with the ATC 21+ must not have any reason to doubt the authenticity or correctness of the identification

16. Procedural Guidelines Proper Identification • R.J. Reynolds accepts only valid government-issued identifications that contain a name, date of birth/age, and photograph Only the following forms of Identification may be accepted • - U.S. state-issued driver’s license • - U.S. state-issued ID card • - Native American Reservation ID Card • - U.S. passport/U.S. passport card • - Military ID card issued by a branch of the U.S. Armed Forces • - ID from a US Territory • Guam, US Virgin Islands, Puerto Rico, American Samoa • - Mexican Consulate Card

17. Procedural Guidelines Improper Identification • Foreign Drivers License • Foreign Passport • Green Cards • Employee ID Cards • Prison IDs • Paper License • Government Program Cards • Club Cards • Hunting License • International ID Cards Unacceptable forms of ID include but are not limited to: What other unacceptable forms of ID have you been presented?

18. Procedural Guidelines Are we permitted to… YES! NO! Make the offer to anyone who has not been properly identified an adult tobacco consumer 21+? Share personal tobacco experiences with qualified ATCs? YES! Recommend a RJRT product that aligns with an ATC’s taste preferences? NO! NO! Initiate the offer or conduct Consumer Engagements with patrons who are non-tobacco users? Initiate the offer or conduct Consumer Engagements outside the retail sales location?

19. FDA Review

20. FDA Review The Family Smoking Prevention and Tobacco Control Act… • “…provides authority to The Food and Drug Administration to regulate tobacco products under the Federal Food, Drug, Cosmetic Act…” • “…with the objective of implementing regulations that are tailored to restrict advertising and promotional practices which are most likely to be seen or heard by youth and most likely to entice them into tobacco use, while affording tobacco manufacturers and sellers ample opportunity to convey information about their product to adult consumers.”

21. FDA Review – What We Cannot Say

22. FDA Review – CE Dialogue ATC Inquiry RJ Reynolds Employee Response Are your products approved by the FDA? Yes Is this product regulated by the FDA? No Are smokeless products safer than cigarettes? • Does the FDA endorse this product? • The fact that the FDA regulates this product does not mean that the FDA approves this product, deems it to be safe, or endorses it in any way No tobacco product has been shown to be safe. The company makes no health claims about our products

23. FDA Review – CE Dialogue ATC Inquiry RJ Reynolds Employee Response Why has Camel introduced modern smoke-free products? Adult tobacco consumers 21+ tell us that they are looking for new convenient ways to enjoy tobacco that doesn’t bother others. We offer a broad range of products that meet the desires of adult tobacco consumers

24. Products in Conversation

25. CAMEL Portfolio CAMEL SNUS Tasty Tobacco in a pouch For when you can’t smoke Great flavors - spearmint and tobacco Sold Cold for freshness • Brainstorm as a group important speaking points for your assigned Brand. Write your speaking points on the flip chart. • Circle phrases that are relevant for conversation with ATCs • Cross out phrases that confuse ATCs or aren’t the most consumer-centric way to describe the product • As a team put together your circled items in the form of an ATC-relevant product description and prepare to present to the group • Groups will add feedback to the group description to help round out the description for the Consumer Engagement

26. CE Dialogue Roadmap

27. CE Dialogue Roadmap

28. Approach CE Dialogue Roadmap • Identify and Greet the ATC and build positive rapport • Verify that product is for ATC’s consumption • Age verify to confirm ATC status (21+)

29. CE Dialogue Roadmap - Approach • Identify Adult Tobacco Consumer • What signs do you look for? • Greet & Build Rapport • How do you greet? • Behind the counter vs. in the store with Consumer • How do you build rapport? Role Play

30. CE Dialogue Roadmap APPROACH BENEFIT PERMISSION QUESTION • A statement that provides a BENEFIT for the Consumer followed by a PERMISSION question. • The Benefit motivates the Consumer to give you more time • Makes you more comfortable asking additional questions • Examples: I see you are buying cigarettes, are they for you? I’m doing a survey of tobacco consumers to better understand what they like best about their brand. • To see what you like best about your tobacco purchase, may I ask you 2 or 3 quick questions? • To get your opinion, may I talk to you for 2 or 3 minutes?

31. Benefit /Permission Statement Benefit: • To help save you money… • To give you a new experience… • To make sure you have more choices… • To ensure you are the life of the party… Permission: • …may I have 2-3 minutes of your time? • …may I ask you 2-3 QUICK questions?

32. CE Dialogue Roadmap APPROACH • Qualify the ATC • Why qualify? • How do you verify consumption? • How do you verify age? • What forms of ID do you accept? • What forms of ID are not acceptable?

33. Putting It All Together APPROACH • Greet & Build Rapport • Benefit / Permission question • Verification • Age • Consumption • 2 minutes each Role Play

34. CE Dialogue Roadmap

35. CE Dialogue Roadmap • Engage consumer about their preferences • Tell Brand Story to educate on key product points • Gauge response Showcase

36. Showcase CE Dialogue Roadmap • Engage consumer about their preferences: • What is your Usual Brand, and what is appealing about it? • Describe your taste preferences. • What would you like to change or add to your Usual Brand? • What would have to happen for you try a different brand? • Tell me how you chose xxx instead of Camel.

37. Showcase CE Dialogue Roadmap • Tell Brand Story to educate on key product points • Tell a Brand Story relevant to the consumer’s preferences. • Describe the product points that best suit the ATC. • Ask if they can relate

38. Showcase CE Dialogue Roadmap • Gauge response • Interested in Trial • Wants more info • Thanks, but No Thanks

39. My Brand Story Camel Grizzly Snus

40. Showcase My Camel Story

41. Showcase MY Brand Story • Tables work in teams. Shares personal My Camel OR My Grizzly brand stories. • 5 minutes • Combine stories to present to class. • 5 Minutes • Tables 1, 3 & 5: MY CAMEL • Tables 2 & 4: MY GRIZZLY • Each table has 2 minutes to tell their story

42. Addressing Objections

43. Addressing Objections When conducting Consumer Engagement you may hear OBJECTIONS An OBJECTION is not always a REJECTION

44. Addressing Objections Emotions and Listening Each table has 3 minutes to flipchart answer the following: Table 1: How can objections make you feel? Table 2: Why do consumers object? Table 3: How can a customer (clerk, manager) cause an objection? Table 4: How do you feel when a customer causes an objection? Table 5: What are the advantages of objections? What happens to listening when emotions go up?

45. Addressing Objections Relateto the Consumer using Acknowledgement or Empathy statements Checkwith the Consumer to make sure their Objection has been resolved Aska question to get the Consumer to talk about their objection Positiona response based on the needs of the Consumer

46. Addressing ObjectionsStep 1: Relating • Acknowledge the consumer’s objection • Lets the consumer know they have been heard • A neutral response • Examples: • Sounds like • It appears • “X” is important • Empathizing with the consumer • Tells the consumer you have walked in their shoes • The consumer must believe you • Examples: • I…appreciate, respect, recognize, realize, see… • Instead of “but” use “and”

47. Addressing ObjectionsStep 2: Questioning The question should: • Be about the OBJECTION, not permission to ask more questions • Get the consumer to talk, not provide time for you to “change their mind”

48. Addressing Objections No Thanks, Newports are my smokes, I don’t mess with Camel What Relating statement and Question can we ask? Mike is conducting a CE in a convenience store when he runs into a competitive Newport ATC 21+ that tells him that he is not interested in CAMEL because he is fiercely loyal to Newport

49. Addressing Objections Mike might say: “Having a smoke that you can count on is a good thing. What is it about Newport that you like most? What would you improve?” “It sounds like you are a loyal customer! Tell me what you enjoy most about Newport? If you could change anything about them, what would it be?” “I recognize your loyalty! Describe what keeps you coming back?”

50. Addressing ObjectionsRelate / Question Exercise On handout, each table team has 3 objections • Develop a Relating / Question statement for each • Divide into pairs and practice your statements • We will go over each table’s answers and you can write their answers down to create a take away “cheat sheet” • Empathize: • I…appreciate, respect, recognize, realize, see… • Acknowledge the objection: • Sounds like • It appears • “X” is important