LifeLock 2013 Annual Report Download - page 10

Amended and Restated Reseller Agreement with CSI dated November 12, 2008, as amended. Pursuant to this Technology Services Agreement, we purchase
certain CSI services. These services comprise a part of our identity theft protection services for consumers and include, among others, non-credit related
reports, certain credit reports and scores, and monitoring services. Our agreement with CSI expires February 15, 2018 and will renew automatically for
consecutive 12-month periods, unless we notify CSI of our intent not to renew at least 90 days prior to the expiration of either the initial term or a renewal term
or CSI notifies us of its intent not to renew at least 180 days prior to the expiration of either the initial term or a renewal term. In July 2011, we entered into an
Identity Protection Service Provider Agreement with Early Warning Services, LLC, pursuant to which we market certain alerts generated from data gathered by
Early Warning Services, LLC. These alerts consist of information regarding the checking and savings accounts of our members and the use of our members’
personally identifiable information in connection with checking and savings accounts, a key feature of our consumer service offerings. Our agreement with
Early Warning Services, LLC expires in July 2014 and is subject to automatic renewal for one-year terms unless either party provides prior written notice of
non-renewal.
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Our fraud and risk solutions provide real-time visibility into consumer behavior that enables our enterprise customers to better assess the risk of
identity fraud. Our flagship identity risk service, ID Score, delivers an accurate, on-demand assessment of the risk of an individual at account opening and
throughout the customer lifecycle. Our fraud and risk solutions are designed to provide our enterprise cus tomers with visibility into consumer behavior to
enable them to better assess the risk of an individual and potential fraud, including the following:
• . Our services proactively separate legitimate and suspicious identities in order to detect fraud and avoid
customer friction and abandonment. Enterprises can quickly discern legitimate consumers from potentially risky individuals with our fraud and
risk solutions designed to deliver a complete picture of the risk of an individual and potential fraud at any point in the customer lifecycle. This
assessment enables enterprises to answer two fundamental questions: is the consumer who the consumer claims to be, and what is the risk of
doing business with this consumer?
•. Our services reduce the regulatory compliance costs normally associated with regulations, such as the Patriot Act
and FTC Red Flags regulations, which require the review of identities presented by applicants. Our services address regulatory compliance
requirements by utilizing unique data across multiple industries to help clear and remediate identities, ultimately reducing the volume of manual
reviews.
These capabilities help prevent our enterprise customers from providing products or services to an individual misrepresenting the individual’s identity
by, among other things, using another individual’s social security number, name, address, phone number, or date of birth.
We also offer credit risk services that are designed to provide real-time visibility into consumer stability and that augment and enhance traditional credit
scores. Our credit risk services utilize our proprietary data repositories, which include alternative credit data not reported to the credit bureaus such as wireless
customer and payday lending data. This provides our enterprise customers with better information on which to base account opening, lending, and credit
decisions throughout the customer lifecycle to maximize revenue opportunities and reduce risk.
We offer our enterprise services through an on-demand platform under multi-year contracts with monthly transaction-based pricing. We believe these
services enable our enterprise customers to reduce fraud and credit losses, improve collection performance, increase revenue, reduce decision making time,
protect customers, and minimize customer friction.
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We pursue a multi-channel member acquisition and brand marketing program. This program is designed to grow our member base by increasing brand
awareness, driving our product superiority message, and maximizing our reach to prospective members.
We utilize consumer advertising and direct response marketing to elevate our brand, attract new members, and generate
significant demand for our services. We use a variety of marketing programs to target members, including radio, television, and print advertisements; direct
mail campaigns; our LifeLock Wallet mobile application; press coverage for our company and our services; online display advertising; paid search and
search-engine optimization; third-party endorsements; and education programs. In 2013, we derived just over half of our gross new members from our
consumer marketing programs.
. We utilize strategic and affiliate partner distribution channels to refer prospective members to us and assist us in selling
our consumer services to our partners’ and affiliates’ customer bases. We have developed and implemented a national sales organization that targets new
partners to enhance our partner distribution channels. In 2013, we derived just under half of our gross new members from our partner distribution channels.
These channels include the following:
•. In this channel, our co-marketing partners, such as US Airways, send co-branded advertisements through direct mail, e-mail, or
other communication means to their customer bases.
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