Travel and Leisure Case Study: CAA (Maritimes)

CLIENT:

The Maritimes division of the Canadian Automobile Association has provided emergency roadside assistance for more than 100 years, and currently serves over 140,000 members in Nova Scotia, New Brunswick and Prince Edward Island—roughly one fifth of all households in its market.

CHALLENGE:

As CAA (Maritimes) grew and expanded its offerings to include travel services, insurance products and a member rewards program, the club found itself challenged to stretch its brand perception beyond roadside rescue. The group had traditionally relied on direct mail to acquire new members, but about ten years ago the marketing department began to notice lower response rates. Once-golden staff intuition in selecting mailing lists no longer had the same touch. “We realized that we weren’t being as methodical as we could have been when targeting the right people and avoiding the wrong ones,” recalls Gary Howard, Vice President of Marketing and Communications for CAA (Maritimes). “We had to get smarter at it.”

SOLUTION:

To identify the club’s best prospects, EA analysts coded current members by lifestyle type using the PRIZM segmentation system, then created sub-group profiles according to different behaviours: what CAA products they used, how they wanted to receive CAA communications and how much money they spent on CAA services. The product analysis allowed the club to identify the best clusters for a cruise abroad versus a family vacation to Disney World. To help CAA (Maritimes) acquire new members, EA scored and ranked the six-digit postal codes in the group’s service area to identify those that included top-performing PRIZM codes, and then sent the results to the group’s list broker, Direct Media Canada. The broker matched the preferred postal codes with several dozen lists of people who subscribed to magazines or bought products by mail. With the targeted postal codes, the broker could identify the areas where prospects matched both the PRIZM and list criteria; those addresses were sent solicitations for new members.

RESULTS:

In recent years, the CAA (Maritimes) direct-mail strategy called for sending out about 100,000 direct-mail pieces to current members each year in three waves—in January, May and September. But after the customer segmentation initiative, CAA began testing variable messaging and offers based travel, savings, and general membership interests. The latest mailing resulted in a 4 percent return, a 60 percent improvement over past response rates. Just as important, the research identified clusters that, while not yielding a lot of members, are home to disproportionately active members who use multiple services. CAA (Maritimes) also used the segmentation research to refine its media buy. For instance, analysis indicated club members who book Disney vacations don’t tend to read the travel sections of newspapers; they’re more likely to see a CAA ad if it’s in the lifestyle section. And members who like CAA’s emergency roadside assistance prefer evening dramas like CSI and are not likely to see ads that run during daytime soaps. In the next phase, CAA (Maritimes) will use PRIZM’s Social Values research to develop targeted scripts to help the group’s frontline staff members improve their communications with members and prospects.