Driving Results

Customers expect efficiency from all aspects of an enterprise—from the products they buy to the people they call to complain about those products. How better to serve customers than to anticipate their needs by gathering and employing all the data they’ve already provided? 

That’s the level of service that the American Automobile Association (AAA) has been hoping to provide the dues-paying members of its century-old organization. 

The nine auto clubs that met in Chicago in 1902 to discuss better and safer roads have since evolved into a not-for-profit, tax-paying organization with a business model based on providing support and guidance to regional clubs throughout the United States. The clubs, serving a total of 50 million members, provide a wide range of auto, travel, and insurance services, and operate semi-autonomously within defined geographic areas.

AAA Mid-Atlantic, the fourth-largest club, is headquartered in Wilmington, Del. The organization traces its roots back before the establishment of the national AAA to a meeting of seven men in the Hotel Flanders in Philadelphia in 1900. Later that year, a group of 50 members formed the Automobile Club of Philadelphia, with each member paying an annual fee of $6. 

Today, the organization has 3.7 million members from Delaware to New Jersey, and operates more than 50 offices, including 2,700 associates in large contact centers for road service, member services, and travel information. With so many members, and so much information to share, the need to institute a CRM system should have been a no-brainer. 

Except it hadn’t been. “[The roots of the implementation] began in 1997 with database marketing,” says Ed Morris, AAA Mid-Atlantic’s vice president of marketing and membership at the time. Until then, Morris says, AAA Mid-Atlantic’s CRM efforts had been fairly sleepy. The company relied on its good reputation as a crutch, assuming that a certain number of mailings guaranteed a predictable response. 

“We were all ‘marketing geniuses’ back then,” Morris jokes. “But we knew we needed to get smarter about how we did our marketing.… We used experienced smart targets like ‘high-tech households’ and ‘members with a propensity to travel.’ We were able to cut our mailings in half without affecting the ultimate result. Over time, that alone saved millions of dollars.”

Morris, along with Don Gagnon (now the club’s president and chief executive officer), began the hunt for a proper CRM system in 2001. CRM, they thought, along with the organization’s new database-marketing expertise, would improve customer service by streamlining the club’s efficiencies, and also dramatically improve lead generation and lead management. 

Senior-level managers and people at every level of the company helped with the evaluation and selection process. “Everyone got involved,” Morris recalls. “I wanted everyone to have a part of this and own it.”

A Champion Users group was organized. The group included representatives of four branch offices and selected users in the contact centers. Individuals at all levels of the company were brought on to help develop the requirements for the system, make the selection, and help champion the solution to the rest of the company. 

Morris says he remembers thinking that the solutions under consideration all had basically the same features, but one vendor happened to display something extraordinary: interest in how Mid-Atlantic ran its business. 

“Most vendors just came in and presented,” Morris says. “Amdocs went the extra step and did a lot of research on us. That resonated with our people.”

The enormity of the investment was the primary obstacle. The initial estimate was approximately $5 million—the largest allocation Mid-Atlantic had ever made for a single project, Morris claims. Many in the organization asked the logical question: Why would Mid-Atlantic spend so much money on a project that couldn’t guarantee a positive return on investment (ROI)? 

Mid-Atlantic’s finances are unusual: The club doesn’t raise capital through stock offerings or take on debt. Membership dues are the primary source of revenue, and any profits from its travel and insurance agencies are reinvested back into membership. In other words, any significant financial commitment would have to be made with extreme care. 

Morris recalls “a lot of skepticism” among his colleagues, and he knew that the project had to work for the sake of the company—and his job. “The last thing I needed was to have people think the system stunk,” he says. Luckily, he wasn’t alone at the wheel. In fact, the only reason the skeptics agreed to adopt even a wait-and-see attitude, he says, was because of Gagnon’s full support.

“Don and I had known each other for a while,” he says. “He gave me the latitude and recognized the importance of doing an initiative like this. He knew the ROI would be delayed but he recognized that we needed to be doing these things.”

Morris claims he knew going in that Amdocs’ system wouldn’t be a perfect fit straight out of the box. 

“Our goal was to make the system as good as possible, as quickly as we could,” he says.

Morris made personal visits to all the offices, playing what he calls “a cheerleader role” to drum up support for the software. His mission on these visits was to explain the plan to customize the system, assuring staffers that it would operate exactly how they wanted it to. The idea was to create, by the time the CRM software was ready to launch, a system all employees could feel ownership of. 

One major concern was a lack of technological experience amongst Mid-Atlantic’s ranks. Unlike other companies, Mid-Atlantic didn’t have a lot of staff turnover. Most of its employees at the time were older and had trouble acclimating to the technology, so a low-tech suggestion-box approach was put in place. “We developed a real nice change process where everyone could submit a change request,” Morris says. “We evaluated the changes and were more likely than not to implement them.”

He credits Amdocs with providing a “nice base system” that his team could adapt to employees’ needs rather than ask employees to alter ingrained processes. Still, there was a bit of a learning curve and a lot of configuration. Once the Champion Users were set up and began using Amdocs, however, customizations began appearing in a matter of days. Eventually, the system became tailored to how Mid-Atlantic’s people approached their work and fit how they naturally did their jobs. “We made more customizations than I would have liked,” Morris admits, “but we had to do it.… I still had all the Amdocs people doing the programming.”

By the time the solution was completely implemented, in mid-2002, Mid-Atlantic had created a user-friendly system serving more than 1,000 associates. (Outside trainers were also brought in, to help associates translate their processes to the new set-up.) To keep the system viable, Morris followed a helpful dictum: A user needs to get three times as much useful information out of a system as she puts in.

In 2005, the national AAA organization rolled out a member relationship management (MRM) program, which shared resources and guidance for individual clubs. For AAA Mid-Atlantic, the challenge became finding a way to integrate its database management efforts with MRM to further refine lead management. 

Corporate marketing, specific business-line marketing, magazine advertisements, e-commerce, and emails were now coordinated. Mid-Atlantic was ultimately able to follow up with customers to generate repeat business. For a post-travel customer, Mid-Atlantic developed a “welcome home kit” that included an agent calling the customer to ask how the trip went. 

“We live and die for the member,” Morris says. “For us it was about giving better service.” And with the ability to download leads into the Amdocs system, he adds, the company was able to find out information about its members that “we thought we knew but didn’t.”

Just before Morris retired in 2007, Mid-Atlantic was in the process of an upgrade to revamp the system’s processes. Morris says associates had come to believe that a lot of information on their main screen wasn’t important, so the company made changes to smooth the workflow. 

Sylvia Veitia was brought on as Morris’s successor. Like Morris, she had spent much of her life in the organization, having held various roles during her 20 years, including spots in public- and government-relations lobbying, marketing, e-business, publications, driving school, membership, and now vice president of membership experience. 

Mid-Atlantic’s success with MRM, Veitia says, can be attributed to the organization’s cultural and infrastructural foundation. When she first got involved with MRM, the organization already had very solid processes. It was clear, she says, that the company wanted to leverage information in the most intelligent way to upsell, cross-sell, and service existing members, and to acquire new ones.

“We were starting to work with lead management and [learn] what it could do for the organization,” Veitia says of her first year in the role, “and how we could integrate a multitude of business lead management processes.”

Today, she says, Mid-Atlantic has developed a way to finalize a single point of collection to review each of its 3.7 million members’ preferences and specific requests. Put simply, Mid-Atlantic is asking its members to communicate what they want. 

A perfect example of how MRM caters to the customer can be seen in the communication Mid-Atlantic develops for any member who books a cruise. After booking, a customer gets what Veitia calls a “bon voyage” communication—actually a multichannel combination of several messages specifically targeting him. An agent calls the member before he leaves, wishing him a great trip. In addition, the agent provides him with information about the destinations along his itinerary—“like if there are high tides in Cancun that week,” Veitia suggests. 

The member also receives a direct mailing with information about Mid-Atlantic benefits, such as reciprocal partnerships with AAA clubs around the world. The mailing often includes an offer for credit if the member is willing to book another cruise within a certain number of days after his return. 

When he does return, the member receives an immediate follow-up, providing an opportunity for him to rave (or gripe) about his experiences. He’s asked questions about service and expectations, what was done well and what wasn’t. From that communication, Mid-Atlantic is able to prepare for the member’s next experience. 

Mid-Atlantic is now in the process of developing new initiatives geared toward members, membership renewal, and general MRM. The most important initiative, Veitia says, deals with the customer life cycle. “We’re looking at the trigger points that indicate the likelihood of renewal both in insurance and membership,” she says, “and making our front-line associates more aware of those trigger points.” 

If a front-line associate knows a customer is less likely to renew his insurance because of a single variable, that information is loaded into the system as an alert. During the next member interaction, the associate involved will be aware that the customer is in a state of vulnerability and can stay away from, or better explain, topics that might otherwise drive the customer to cancel. 

Another initiative involves Mid-Atlantic’s e-business group. The organization hopes to use a member’s history of online transactions to improve engagement at the branch and contact center when that member comes in or calls. “If you spent two hours in the last week researching Hawaii,” Veitia says, “and you had visited the travel insurance area online and continue to look at cancellation policies, when you call in to speak to a travel canceller we mention [the] cancellation policies [that we offer].” 

Mid-Atlantic is also looking to optimize MRM, examining the business challenges that have developed in the past few years, and attempting to engineer new functionalities within MRM. The best evidence of the organization’s success is its membership-renewal rate, which last year hit 90 percent—incredibly impressive for an organization with 3.7 million members, but even more so when one subtracts the members who died or moved to another region. 

“I attribute that success to our 2,700 associates, who truly commit themselves to helping our members,” Veitia says. In a sign of how the seeds of CRM benefits are often planted years earlier, however, she also takes pains to credit efforts by Morris and others that in some cases date back as much as a decade or more. The success she’s seen in the last three years, she says, evolved due to the organization’s maturity and experience, and the accomplishments were only possible because Morris followed the mantra of its CRM consultancy, ISM: “People and culture before technology.” 

“Sure, we’ve done a lot in the last three years,” Veitia says, “but it’s not because we didn’t know what to do before, or because we didn’t want to do it.” It simply wasn’t time yet, she notes.

As for Morris, he’s traded in the boardroom for a studio in North Carolina’s Blue Ridge Mountains, where he spends his days painting impressionistic landscapes. His house sits alongside a stream on nearly 20 acres of land where people come to rent small cabins for retreats. 

He jokes about how different his life is now in comparison to the time he spent at Mid-Atlantic. His friends ask him how he could go from high-pressure days that revolved around numbers and spreadsheets to the quiet mornings in his studio. Although he acknowledges tapping into a different side of his brain than he used to, he believes the same skill set applies. Instead of looking at statistics “to weave narratives about the organization’s members and financial statements,” the narratives he develops now come from watching the blue haze rising from the oak trees outside his window. 

For a man who spent years at an organization dedicated to making boat, motor, and plane trips easier, safer, and more affordable, it only seems fair that he’d describe his new life as “being on vacation every day.” 

THE BREAK

Company: AAA Mid-Atlantic

Founded: 1900

Industry: Nonprofit

Original CRM Implementation: 2001

Go-Live Date: Summer 2002

Any Subsequent Updates: National AAA launches member relationship management (MRM) initiative in 2005; Mid-Atlantic takes control of MRM in 2007

IN THE POCKET

Since implementing Amdocs in 2002, AAA Mid-Atlantic:

• more intelligently acquires, upsells, cross-sells, and services members; 
• has streamlined its operations;
•  has refined lead management via marketing and sales integration; 
• renewed 90 percent of members in the past year; 
• has established a single collection point for all member information; and
• has developed the ability to use that member-specific information to tailor multichannel messaging in both inbound and outbound communications.