2014

CUSTOMER SUCCESS

Discount Tire DirectThe Rubber Meets the Road with Live Engagement and Predictive Intelligent Targeting

© 2014 LivePerson, Inc. 2

CUSTOMER SUCCESS Discount Tire Direct

Employee engagement is a central lynchpin for Discount Tire Direct that directly cascades to how the company connects with its customers. Making sure this extends to

its digital channels is a priority—and LivePerson is helping to ensure this is a reality. The initial deployment

of LiveEngage, which included proactive live chat based on rules and enrichment analytics, proved highly

successful. Average order value jumped 25 percent—an increase of $100 to $120 per order—while conversion

rates increased more than 18 percent with live chat. And with the addition of Predictive Intelligent Targeting,

Discount Tire Direct witnessed another four to six percent increase in conversion rates and a higher

chat acceptance rate.

When Discount Tire Direct was founded in 1994, the Internet was just a blip on the radar screen—if even

that—for most companies. The primary revenue channel for Discount Tire Direct was print ads in Car and

Driver, Road and Track, and other magazines.

When Jay Reed joined Discount Tire Direct in 2000, the company had a website but it was solely an

informational channel; there was no e-commerce component. But within a couple of years Discount

Tire Direct recognized that its customers wanted not only information but also the ability to conduct

transactions from the website.

Focused on delivering experiences that map to customer requirements, the company launched an

e-commerce element in late 2002. “It has evolved over time,” Reed notes. “We wanted to provide more

than just transactional capabilities. We wanted the ability for our customers to make the most informed

decisions possible and to deliver an experience that aligns with the one in our retail stores.”

Company ProfileFounded in 1960 and

headquartered in Phoenix,

Arizona, Discount Tire Direct

is a subsidiary of Discount Tire

Company with 875-plus stores

in 29 states.

Business ResultsOut of the Gate

Achieved 18%+ conversion

rates via chat engagement

Sustaining 98%+ CSAT

25% higher AOV

9,000 annual visitors accept

chat invitation who would

have left—and not

returned--website

With Predictive

Intelligent Targeting

Increased conversion rates

4% to 6%

Improved chat acceptance 1%

Flattened impact of seasonality

and marketing promotions

© 2014 LivePerson, Inc. 3

CUSTOMER SUCCESS Discount Tire Direct

Cultural bearingsReed started off at Discount Tire Direct as a sales representative in the Call Center Sales team and was

promoted to sales manager in 2008. One of the things that attracted him to Discount Tire Direct is the

company’s culture. It is very much focused on customers and employees.

“Our Founder and CEO, Bruce Halle, believes that everything starts with employees, and how they feel

about their jobs translates into how the connect with our customers,” Reed explains. And it isn’t simply a

matter of words. Discount Tire Direct, which uses the Net Promoter Score framework to measure customer

satisfaction, maintains a customer satisfaction rate in excess of 98 percent.

Consequently, connections are very important for Discount Tire Direct. Take as an example the company’s

new headquarters in Phoenix, Arizona. When Discount Tire Direct moved into the facility five years ago,

the management team elected to tear down the cube walls separating its employees. “We wanted to break

down barriers blocking communications,” Reed recalls. “The employees welcomed the change, and it has

proven to be a great decision.”

Engagement: from employees to customersDiscount Tire Direct had experimented with an on-premise live chat solution when it initially added

e-commerce to its website in 2003. But it was simply a passive button called Click to Talk and was soon

removed. “It wasn’t targeted and anyone could chat with one of our agents,” he says.

In late 2011, Reed and his management team decided to revisit the use of live chat deployment on the

Discount Tire Direct website. “We wanted to rethink how we engaged customers on our website, seeking to

make it the best buying experience that we could for our customers,” Reed describes. “This prompted us to

return to the idea of live chat.”

The Discount Tire Direct team investigated several different solutions, including LivePerson. “What initially

attracted Discount Tire Direct to LivePerson was the ability to target visitors with whom we wanted to engage,”

Reed says. “And as we embarked on the path of choosing a solution, we uncovered additional benefits such as

the ability to conduct secure transactions from the chat engagement window.”

Prior to signing a contract, the LivePerson team collaborated with the Discount Tire Direct team to demonstrate

the business value of adding proactive chat engagement as part of its e-commerce offering. “From all of the

different business partners that we have, I’ve always felt that our partnership with LivePerson was great,” Reed

says. “We never felt like we were just a customer.”

Burning rubber out of the gateThe response of customers was very positive. One area was average order value. Specifically, Discount Tire

Direct found that customers who engage via live chat purchase between $100 and $125 more than customers

who self serve or go through the voice channel. “It adds up to orders that are about 25 percent more than those

through other channels,” Reed observes. “Engaging customers through live chat simply gives us the ability to

make a more meaningful connection. We can offer them information in the chat engagement window that

cannot be provided through our other customer engagement channels.”

Challenges• Deliver outstanding cus-

tomer digital experience

• Increase e-commerce

conversion rates

• Maintain high in-store

CSAT via digital channel

The Solution Engagement Model:

Proactive live chat on

e-commerce site

Under the Hood:

LiveEngage platform

using Predictive Targeting

and enrichment analytics

for website and

agent optimization

LivePerson Customer Success:

Implementation of

LiveEngage and integration

of Predictive Targeting;

ongoing training and

technical support

The self-learning algorithms

in Predictive Intelligent

Targeting help us to engage with customers at

moments when they need help.

– Jay Reed, Sales Manager, Discount Tire Direct

4

CUSTOMER SUCCESS Discount Tire Direct

© 2014 LivePerson, Inc.

Another benefit Reed and his team saw was conversion rates. “Because we are able to proactively engage with customers when they are at

pivotal moments, we realized conversion rates six or seven times higher in live chat than that for self-serve hot leads,” he says. “With LivePerson,

we are able to have the right conversations at the right moments.”

Perhaps the most impressive result is the number of visitors who would have left the Discount Tire Direct website without making a purchase.

Through post-chat surveys, Reed’s team has found that around 9,000 visitors who accepted a proactive chat invitation would have left the

website and not returned. With a 20-plus percent conversion rate with live chat, this equates to a substantial amount of sales that was lost but

then recovered. “Being able to get in front of our visitors and provide them with that personalized connection really matters,” Reed emphasizes.

“LiveEngage gives us that ability.”

There are a couple use-case scenarios that Discount Tire Direct tracks. “Our customer journeys don’t all take the same route,” Reed notes. Some

customers are ready to order; they just need some assistance or additional information. For these customers, Reed’s sales chat team helps them

complete their purchase in the e-commerce shopping cart on the website, helping them build an order that meets their specifications.

For other customers, they may not be ready to place an order; rather, they need information and would return in a month or two to complete the

order. Here, sales agents answer their questions and build trust.

Getting enrichment analyticsCreating a process for analysis of live chat conversations—often called enrichment analytics—is another area where the LivePerson Customer Success

manager provided support. “We created an exit survey process for live chat that mirrors the same process on our website,” Reed notes. The survey

process used by Discount Tire Direct is based on a scale of one to five. Any survey without an “Excellent” or “Satisfied” rating is automatically pulled and

sent to Reed. He then reviews the chat conversation and coaches the sales chat agent on what could have been done differently.

“Our use of conversations analysis goes beyond sales coaching,” Reed adds. “LivePerson is not just a revenue-generator for us. One of the other

advantages of conversations analysis is that it enables us to see how customers behave on our website. It lets us know where they are having

trouble and make appropriate changes that improves the customer buying experience.”

Intelligent targetingIn mid 2013, the LivePerson Customer Success manager approached Reed about migrating from manual rules-based targeting to Predictive

Intelligent Targeting—an algorithm technology that examines visitor behavior patterns, interaction records, and other historical data.

LivePerson was in the process of making Predictive Intelligent Targeting generally available and was seeking a small subset of customers

to serve as early adopters.

“There is a lot of seasonality in our business, and we run different promotions throughout the year,” Reed says. Proactive chat based on manual

rules weren’t sufficiently adaptive, and we couldn’t capture changes in customer behavior across the seasons.”

The ability to engage with customers through live chat based on their behavior, at just the right moments, was a critical requirement for us.

– Jay Reed, Sales Manager, Discount Tire Direct

5

CUSTOMER SUCCESS Discount Tire Direct

© 2014 LivePerson, Inc.

In late 2013, Reed and his team made a decision to migrate from manual rules to Predictive Intelligent Targeting. The rollover took a matter of a

few days, and was facilitated with the help of the Customer Success manager. “The self-learning algorithms in Predictive Targeting help us to engage

with customers at moments when they need help,” Reed reports. “We’ve seen promising results in just the first couple months, and we anticipate

ongoing progress.”

Conversion rates increased four to six percent with Predictive Intelligent Targeting. “We were at about 18 percent,” Reed reports. “Once we

turned on Predictive Targeting, we saw this number increase to 22 or 23 percent. Just a few percentage points make a huge difference in

terms of total sales.”

Chat acceptance is another area where Reed and his team have seen positive returns. “We saw about a one percent increase here,” he says.

“I believe this is an indication that with Predictive Intelligent Targeting, we are better able to target our customers.”

Rubber meets the roadDiscount Tire Direct can make some unique claims compared to most other companies that have been in business 50-plus years. For example,

the company has increased revenue every single year and has never had a layoff. The promise of Halle to his employees—“Do a good job, and I’ll

provide lifelong opportunity for you”—isn’t a hollow statement.

The rubber truly meets the road for Discount Tire Direct when it comes to extending this employee experience to customers. “We chat with a

little more than 2,000 customers every month,” Reed observes. “We want to hit a satisfaction rating as close to 100 percent as possible. We’re

averaging somewhere between 98 and 99 percent, and thus there is still room for growth.”

And Reed isn’t joking regarding his statement that “there is still room for growth.” The goal of Discount Tire Direct is to have every one of its

customers walk away—or in this case ‘click away’—satisfied with their experience, having gotten the information and support they needed.

“With tools like LiveEngage, we are able to deliver on this commitment,” Reed asserts.

About LivePersonLivePerson, Inc. (NASDAQ: LPSN) offers a cloud-based platform that enables businesses to proactively connect in real-time with their customers via chat, voice, and content delivery at the right time, through the right channel, including websites, social media, and mobile devices. This “intelligent engagement” is driven by real-time behavioral analytics, producing connections based on a true understanding of business objectives and customer needs. LivePerson is headquartered in New York City with offices in San Francisco, Atlanta, Tel Aviv, London, Amsterdam, and Melbourne.

Contact

LivePerson, Inc. T: 212.991.1794

475 Tenth Ave F: 212.609.4233

5th Floor info@liveperson.com

New York, NY 10018 www.liveperson.com

Our Founder and CEO Bruce Halle believes that it starts with your employees, and that impacts how you deal with your customers.

– Jay Reed, Sales Manager, Discount Tire Direct