September Case Study: AXIS Database Marketing Combined with Third-Party Data Provides 360 Customer View

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1 AAA Western & Central New York Tracey Guarino, Information Systems Manager AAA of Tidewater Virginia Georjeane Blumling, Vice President, Public Affairs and Marketing CAA Maritimes Gary Howard, Vice President, Marketing and Communications September 2007 Case Study: AXIS Database Marketing Combined with Third-Party Data Provides 360 Customer View CAA Québec Olivier Nauleau, Director of Marketing Research AAA Northwest Ohio Corey Amonette, Information Systems Director AAA East Central, East Penn Region It brings all of the different tools and intelligence sets that we have across the company to one powerful tool that s easy to use... (and) deliver(s) some of that intelligence to the front line so that we can work in tandem. Gary Howard Vice President, Marketing and Communications, CAA Maritimes

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3 Analytics is the Cornerstone of MRM Background AXIS Database Marketing (DBM) was first delivered to CAA-Québec in Campana worked collaboratively with this club to develop an application in response to their evolving database marketing needs. Currently, 15 clubs have implemented AXIS DBM and we spoke to a number of DBM clients who have been working with the product for a range of years. While some clubs have recently implemented DBM and are quickly learning the uses of the product, other clubs have been working with it for years and have developed sophisticated programs and predictive models. The AAA East Central, East Penn Region recognize the ultimate plan is for all AAA clubs to move to an MRM initiative rather than have each business line sit in its own environment. The goal is to deliver a 360 degree view of the member. Some Uses Simply put, an analytical database is used to make better business decisions. The more data available about members and prospects, the more likelihood of a better, more predictable outcome. Apart from segmenting existing members for promotional opportunities, clubs can develop profiles of similar responders to aid in acquisition strategies. Many clubs use DBM for common programs and uses like: Thanks to DBM we were able to clean up this huge file and segment it. And now that s the best file for prospecting to new members. With some of the file, some of the segments, we have had an almost 18% response rate with one mailing. That s huge. Olivier Nauleau Director of Marketing Research, CAA Québec Member list creation for specific promotions such as:» Add-An-Associate promotions» Coverage upgrades (ie. Plus and Premier)» Car Care» Travel-specific offers Promotional Tracking/measurement Data audits (including data cleansing) Providing information needed to support strategy and policy decisions (branch placement, member entitlements, etc.) 2

4 After the first month we actually had a 7% increase in leads generated from the same marketing material and a 2% higher close rate on actual policies that were booked. AAA East Central, East Penn Region Renewal Analysis - For some this is the main focus of DBM - examining current and past members to understand the factors and behaviors that contribute to a member s decision whether or not to renew. With this knowledge, clubs can take proactive steps to minimize attrition or use this to develop profiles to target best prospects for new memberships. As Tracey Guarino, Information Systems Manager for AAA Western & Central New York notes, The goal is to figure out the best profiles for renewal and to be able to target similar profiles for new customer acquisition To be able to acquire new members but also to retain the ones that we have. The possible uses are endless, but a few use the DBM for different uses such as: Help in determining appropriate content for club magazines Determining AAA.com web-related content displays Multiple Data Sources Combined in One Tool While AXIS currently captures a full range of transactional data, many clubs are also purchasing and importing other sources of data into AXIS DBM. Additional third party data allows for the inclusion of a variety of demographic/ psychographic data not already captured. Clubs interviewed import their data from other club systems (i.e Insurance, Car Care), from other club partners (i.e Travel vendors) or from purchased lists/data sources. The ability to import this data easily into one location where it can be analyzed and segmented is of huge benefit in targeting members for promotions and business analysis. Types of third party data used by clubs interviewed include:» Experian - National Office Action Center» Statistics Canada» Bank of America cardholders» Environics Analytics tool - Prizm» Insurance data» Travel data» AAA/CAA.com data» Annual Membership Information Form 3

5 Georjeane Blumling, VIce President Public Affairs and Marketing, AAA of Tidewater Virginia: We use the Experian data we get from the Action Center combined with the data we are capturing from our membership system which all goes into DBM We are still a new Campana club and the outside data makes a big difference 1) because we are still in the early years of member data collection and 2) because walk-in traffic has been lower in the last year or two so we do not have the opportunity to get face to face direct information. So the Experian data that we re getting gives us a better picture of our members, when we can t get direct information from them. This helps with our marketing because instead of doing massive mailing efforts we re now using smaller lists that are much more targeted. AAA East Central, East Penn Region have been able to use the third party data from Experian. They ve also used DBM to import current travel and insurance information as well in the process of bringing in credit card information from Bank of America Visa credit cards. The next step they would love to take is importing information from their Auto Repair facilities. Olivier Nauleau, Director of Marketing Research at CAA Québec acquired data from Statistics Canada (Canada s National Statistical agency) used for modeling, as well as some partner data about members that helps them to better understand their mutual customer. CAA Québec is proficient at profiling as well as modeling from third party data. They have also developed Distance metrics whereby they have taken all branches and the position of major partners and calculated the distance of every postal code in the province of Québec. For every member we know the distance of the Point of Sale of every partner. So we are able to have data modeling and segmentation for promotions or specific partners. For example, on upcoming renewal notices, this has allowed them to highlight the closest gas stations to each member with available CAA discounts. We also have data coming in from personalized surveys. It helps to add some attitudinal information to the transactional data (so that we can) make bridges between both of them. 4

6 If you re going to be in the information business, then AXIS DBM is the right tool. FeATUReS Cost effective BeneFITS Get higher ROI in promotional campaigns through more refined distribution costs and increased response rates. AAA East Central, East Penn Region Integrated Incorporates transactional data from all business lines as well as Lifetime Value elements (including RFM metrics) allowing clubs to identify target groups for areas such as promotion management, dialog marketing, retention, acquisition, as well as segmentation initiatives. Flexible Can import an unlimited amount of third-party data without the restrictions of a rigid, predefined file format. Renewal Analysis Includes the data required for clubs to measure and manage their retention initiatives. Relevant Clubs are able to ensure they communicate a relevant message to their members and prospects in a timely and effective manner. 5

7 FeATUReS BeneFITS Multi-level Information is provided at both the household and individual level. Easy to Train and Learn By providing both a graphical, drag-and-drop interface as well as a more detailed data mining tool, the powerful capabilities of AXIS DBM is accessible to a wide range of users. Self-Sufficiency Clubs are provided with a complete set of data and tools which gives them control and ownership of the database - involving outside parties at their discretion. Fast Resides on its own server to minimize query processing time and eliminates any conflict in resources with the front-line, operational server. Automated Unattended, off-hours data updates (refresh) take only a matter of hours. 6

8 That s [Membership Information Form] another piece of information that Campana is building into AXIS DBM. It just makes DBM that much more powerful and rich. Gary Howard Vice President, Marketing and Communications, CAA Maritimes Specific DBM Examples Each of the clubs interviewed cited specific programs where they had achieved a successful outcome using DBM. Some examples: Corey Amonette, Information Systems Director, AAA Northwest Ohio, recalls that prior to implementing DBM, we were having a hard time reaching a 1% response rate. Where industry standards for response rates sit at 1 2%, Corey was able to achieve an 8.11% response rate on one mailing. By targeting members residing near Car Care locations, but who had not taken advantage of Car Care, Corey and team were able to see impressive results with over 1960 responses. While not recording Car Care data directly, we export the transaction data from the Car Care system and import it onto the member record and that comes over into DBM. So in DBM we re able to say, give me members in these zip codes who have not used Car Care. Corey went one step further and was able to provide the initial Marketing cost of $6,874 and the Return on Investment on the campaign of $363,753 gross. Olivier Nauleau, CAA Québec: We had a huge prospect file at CAA Québec. And every time we wanted to do some direct mail using this file, it was a disaster. Thanks to DBM we were able to clean up this huge file and segment it. And now that s the best file for prospecting to new members. With some of the file, some of the segments, we have had an almost 18% response rate with one mailing. That s huge. For AAA East Central, East Penn Region, one of the best uses of DBM data was in a partnership with a third party insurance company. For the insurer s initial marketing efforts, they came to AAA East Penn with a profile of who they would like to see as their client and what currently works in their market. Based on demographics, income, age, education levels, AAA East Central, East Penn Region were able to take their existing marketing piece and retarget to their own profile and saw the response rates, leads generated, and actual bookings jump in two months. They noted a 7% increase in leads generated from the same marketing material and a 2% higher close rate on actual policies that were booked in the first two months. 7

9 Gary Howard, Vice President, Marketing and Communications, CAA Maritimes: There s a number of things we are using DBM for we ve identified, for example, preferred travel clients based on a revenue to the club as opposed to number of transactions over the past 3 years. And what that has allowed us to do is select our best travel clients. We also use modeling software from Environics analytics called Prizm and we import that into DBM as third party data. What we re able to do with DBM helps us select who our best customers are then we can go and model against the rest of our membership base and select other people like them. From there we can focus on a variety of different travel campaigns to those folks to extend to new membership acquisition Acquisition costs may be higher but they are of higher value to us and we get a better return. Gary Howard s team has also implemented a Membership Information Form given to new and renewing members annually. It s a series of basic demographic questions and purchase intent questions. They have collected profiles for about 40% of their households and that also goes into DBM as another source of data. That s another piece of information that Campana is building into AXIS DBM. It just makes DBM that much more powerful and rich. It s not that you re saying now we can mail less. That shouldn t be the objective. It should be that now we will mail more intelligently. Gary Howard Vice President, Marketing and Communications, CAA Maritimes Return on Investment For many clubs, the use of DBM produces immediate results in cost efficiencies. But Gary Howard cautions You have to be careful. It s not that you re saying now we can mail less. That shouldn t be the objective. It should be that now we will mail more intelligently. So can you save some money, yes, but it should be about marketing more intelligently. For Olivier Nauleau, ROI is the payback as well, For every step, we see the increase of ROI. Sharing this kind of tool gives us more power to better tools at a lower cost. Campana has the ability to develop these tools because they know the complexity of the management of data sources for clubs. 8

10 It s easy to use. you can point and click and you can pretty much do it but knowing where the data is in AXIS is a really helpful tool. Cory Amonette Information Systems Director, AAA Northwest Ohio Working with AXIS DBM is easy DBM is often found straddling IT or Marketing departments. Some larger clubs have the benefit of an entire DBM analytic team at their disposal. Other smaller clubs do what they can to improve their business analysis with a smaller team. For most, AXIS DBM is an easy to use product for many experienced users and allows storage, retrieval and analysis of multiple sources of data: Gary Howard, CAA Maritimes: It brings all of the different tools and intelligence sets that we have across the company to one powerful tool that s easy to use (and) deliver(s) some of that intelligence to the front line so that we can work in tandem. Tracey Guarino, AAA Western & Central New York: AAA Western & Central New York believes in data and the club philosophy is to make business decisions based on facts, not on assumptions or gut feelings. In the past, IT has been confronted with analytical questions that we were not able to answer. Once we put in DBM/Renewal Analysis, we had the tools in place to answer many more questions. Corey Amonette, AAA Northwest Ohio: It s easy to use.you can point and click and you can pretty much do it, but knowing where the data is in AXIS is a really helpful tool. Georjeane Blumling: It s becoming easier. The thing I m finding is that because I like analytics, it is becoming clearer for me. I like to pull things apart and get down to the nitty gritty and ask the harder questions. So it s been a good challenge for me. But the product itself is not hard to work with once you learn the basic information, and the manuals believe it or not, really do help. 9

11 The AXIS Team - Your In-House DBM Partner As always, clubs have a lot of praise for the AXIS team. They really seem to get behind the implementation and push clubs to use the tool to its full potential. Gary Howard: This is one thing I can say without question, is outstanding they ve been clear that these tools are only as good as you use them and using them to their maximum, you have to use them frequently and they have to be part of your life, your culture, how you do business. So they ve been very diligent in making sure that we re not just plugging them in, we re actually using them. As always, I can t say enough about the Campana team I think they do a very good job of proactively anticipating where we might be going and providing product in a timely manner that addresses those needs. Tracey Guarino, AAA Western & Central New York, has pushed Campana in another direction. The product developed for CAA Québec was quite sophisticated but, she notes, we partnered with Campana to try and develop something that was a little more user friendly, something that we could work with from an IT perspective to get it to the point where we could pass it off to the business line. Corey Amonette of AAA Northwest Ohio believes, They re one of those vendors - and there are few of them out there - that you can always trust and rely on to be there for you and have your best interests. I feel Campana has a team that is looking out for all clubs that are part of the AXIS family. I really couldn t do what I m doing in DBM without them and their product. They made their product so that it is easy to use, they re there to support you pulling the data out of AXIS and getting the elements that you need to know. The AAA East Central, East Penn Region club noted that the training focus was not only on day to day functionality, but also about what needs the club would have for DBM in the future, arming them for down the road. I feel Campana has a team that is looking out for all clubs that are part of the AXIS family. I really couldn t do what I m doing in DBM without them and their product. They made their product so that it is easy to use, they re there to support you pulling the data out of AXIS and getting the elements that you need to know. Cory Amonette Information Systems Director, AAA Northwest Ohio 10

12 Future Plans? The idea of storing customer data in order to use the information for databasemarketing purposes has been around for decades. Today s systems make it possible to have the complete history of a client on-screen the moment he or she calls. Today s Customer Relationship Management systems use the stored data not only for direct marketing purposes but to manage the complete relationship with a particular customer and to further develop the range of products and services offered to them and others like them. With the club focus on MRM, AXIS DBM will play a key role. In response to future plans they have for DBM, some clubs have simple goals, while others have much broader ambitions: Georjeane Blumling: Today we ve been getting comfortable with it and using it for marketing purposes on the backend. Next step is to get this out in the hands of front line people so that they can use it intelligently. Tracey Guarino, AAA Western & Central New York is looking forward to being the beta club for a new release scheduled in the Fall. Working with Campana, they have come up with tools that are more flexible and easier to use With more flexibility, we will be able to do some cross functional reporting.we want to take some of the data that we are using, get the results from renewal analysis and build dashboard reports that we can present to users on a regular basis. The users have to be empowered and have the right system in place to be able to do their own analysis. They know their business line better than we do and they should be able to ask the questions. Corey Amonette, Information Systems Director, AAA Northwest Ohio told us that one of the newer functions of DBM will be using it more for web-related content display or e-marketing, e-newsblasts or changing the My AAA landing page on the web to display certain information based on what analysis we ve done with DBM.My AAA account is a new one that we just profiled We are now able to extract those members numbers and import them into DBM and do analysis on them. The plan is to get more resources in our web area so we can spend more time with analysis and also pulling that information back into My AAA account either creating offers to individual people by or dynamic content on the web for targeting bigger groups of whatever analysis we can find. The operational MRM tool AXIS has developed in the last two years is called Navigator. The Navigator Client Workspace summarizes on one window the main information about a member even if it comes from other associates in AXIS. 11

13 Oliver Nauleau: We are now in the phase of putting some automatic transactions in this screen so when (frontline staff) see a flag, add an associate etc., they click on the flag and the transaction is automatically begun. Before they had seven screens to see all the member information, and now it is all summarized on one screen. The screen has some automated/customized transactions prepared that will increase the productivity on the front end to offer more things to members. That s a huge project for CAA Québec and we worked closely with Campana on it. We are the first Campana club to implement this operational CRM. For front line employees in contact with members, this allows us to have a better relationship with them. For AAA East Central, East Penn Region, members renewing online has increased 24 27% over the past two to three years and close to 10% of their members currently deal with the club exclusively online. For this reason, web data integration has become more important to this club. For Oliver Nauleau s nine person department (CAA Québec): The challenge with new clubs using DBM is not about technology now.right now the challenge is more about human resources. You need to have people using DBM correctly. Those kind of people need to have four brains; one brain is to understand the CAA business, the other one is to have a good knowledge of marketing, the third one is to be able to have a little bit of IT knowledge as we are dealing with tools that can be complex sometimes or in development and the last one is to have statistical knowledge. DBM has come a long way. From the 1960 s where only the largest of corporations could afford their own data processing center, to the current ability to slice and dice data quickly and efficiently. Campana s plan for AXIS DBM is to continue to meet the evolving needs of its customers. Future developments include more analytical capabilities to allow clubs to realize their MRM goals. Discussed enhancements involve changes to the tools themselves, the addition of additional relevant data and automated functions wherever possible. Putting these evolving tools in the hands of experienced staff will ensure clubs are successful with both their analytical and operational MRM initiatives. For every step, we see the increase of ROI. Sharing this kind of tool gives us more power to better tools at a lower cost. Campana has the ability to develop these tools because they know the complexity of the management of data sources for clubs. Olivier Nauleau Director of Marketing Research, CAA Québec 12

14 AXIS, a division of Campana Systems, applies its in-depth industry knowledge and experience to maintain leadership in providing an evolving suite of integrated software and service solutions for AAA/CAA auto clubs. AXIS is the only complete and integrated suite of auto club information management products developed by users for users. The AXIS suite of products now serves over 15 million members via 23 auto clubs in North America and provides intelligent functionality with unparalleled support. Campana Systems Inc. is an international leader in information solutions for the auto club and health care industries. Since 1988, Campana has been enabling clients to achieve their ongoing business objectives using in-depth industry and trusted technology solutions. 13

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