Meridian Awards 2012

Company Profile

With more than 52 million members, the American Automobile Association (AAA) is a federation of independent AAA Clubs covering mutually exclusive geographic domains. Known primarily for providing emergency road service, maps and travel publications, AAA also has a broad range of travel, insurance and financial services, member benefit programs and public service activities. AAA is the largest membership travel organization in the world.

AAA Auto Club South (ACS) is the 4th largest club in the federation with 4.2 million members, 2.5 million member households and 6.9 million customers:

• ACS covers Florida, Georgia, Middle/West Tennessee, and Puerto Rico
• P&L revenue drivers are membership dues, insurance policy sales, and travel agency sales
• Additional offerings include Financial Services (credit card, certificate of deposit, auto loans, auto buying services, auto extended warranty) and AAA Dollars Loyalty program (earn points that pay your membership renewal)
• Insurance products include auto, home, flood, life and health insurance through our insurance agency; and, auto, home, flood, package policy through two ACS insurance companies (ACSIC and ACICF).
• Travel agency books domestic and international cruises and tours, as well as providing AAA Exclusive Vacations. AAA has strategic alliances with Disney, Hertz, Royal Caribbean, and other well known travel providers.

Introduction/Executive Summary

This submission will focus on two major initiatives which are underway at Auto Club South:

1. The first initiative involves the Marketing Insights Advanced Analytics Team which supports all business units contributing to the P&L. The goal of this ongoing initiative is to be able to more effectively and efficiently apply data to solve business problems. Part of this involves enabling the non-statisticians on the team with an ability to carry out analytic activities. This represents a shift from prior modeling approaches which were led by the statisticians on the team. Making modeling efforts more pragmatic and accessible to the non-statisticians is key in making sure that the statisticians can focus on the activities where their expertise will drive the greatest business impact.
2. The second initiative involves democratizing data and providing the entire ACS organization with quick access to data that lets them manage and grow the business. The businesses within ACS need to understand customer profiles for new and renewing members, members receiving roadside assistance, members participating in rewards programs, and customers of the travel and insurance businesses. Member and customer profiles include demographic, geographic, membership types and renewal rates, channel preferences, transactions and revenue data.

Business Challenge

P&L revenue drivers for Auto Club South are membership dues, insurance policy sales, travel agency sales and financial services. The goal set for these ongoing initiatives is to increase renewals, reduce churn and cross-sell and upsell members.

With 4.2 million members, 2.5 million households, and 6.9 million customers, it can be a complex task in terms of applying data to solve these problems.

Solution Description

1. For the first initiative ACS chose Portrait’s Miner solution which is a powerful customer data mining and predictive analytics solution. As part of the initiative the affiliate first built an analytics table with 6.9 million records and about 500 columns of household-level aggregate transactional data for the analytics team to use for modeling activities. This data is then loaded into the Self-Service solution to enable non-analysts to generate their own counts. With this in place ACS can try hundreds of independent variables, with background processing and no degrees of freedom error messages. This establishes an interactive process for refining models and creates results that are easy for business users to understand.
2. For the second initiative, ACS chose Portrait’s Self-service Analytics solution, which is a web-based customer data exploration solution. The affiliate built a master table with demographic, geographic, membership, and channel information. This master table is then appended to business unit transaction summary data, rewards program transaction data, road service call data, membership billing and enrollment data, lifetime value data, and travel bookings data. A market table of population counts, and relevant spend was also appended to the master table. With a total of 9 tables ranging in size from 84 fields on 200,000 records to 138 fields on 13 million records, the business is enabled to explore the data as quickly as they can generate questions to ask.
   
   Portrait’s Self-service Analytics solution has been rolled out to 150 users across ACS. Users include the HQ and regional executive teams, marketers, accountants, call center operations managers, analysts from ACS owned insurance companies, and the Information Systems department.

Results Achieved

Through their implementation of Portrait Miner, ACS has achieved the following results:

1. Increased speed and productivity

AAA Auto Club South can build and implement models in days while prior approaches would have taken weeks or months. For example, a recent model build for renewals was created in one day—in the past, similar efforts took up to a month. With new tools (binning handling all variable transformations, standardization, and outliers - and scorecard builder helping users understand the effect of the parameters in a much easier way than standard logistic output) ACS can build more models in less time, decreasing the time to market.

On this whole, this analytics data structure is able to save ACS 1.5 hours per project. With an average of 13 projects per person per month, and 7 employees total, ACS was able to save 126 hours per month!

2. Ability to manage modeling activities in-house and do more with less

Using tools that automate the modeling process, AAA Auto Club South has been able to get existing non-statistician employees, including engineers and market researchers, involved in the modeling process. Using prior methods, it would have taken more than a year to train these non-statisticians and get them up to speed to build models—but with pragmatic approaches, users are trained in as little as three weeks and are building models that are as good or better than past efforts.

3. Increased insight on customer behavior

By being able to manage modeling activities in house, AAA Auto Club South has gained greater depths of insight into the marketing funnel. Business users and marketers are empowered with new insights to roll out targeted and effective campaigns.

4. Increased flexibility

Marketing friendly analytics tools have enabled increased flexibility. AAA Auto Club South can integrate new methodology with existing SAS processes and DB2 access while adding more records and variables into their analysis to build better predictive models.

Through their implementation of Portrait Self-service Analytics, ACS has achieved the following results:

1. Increased speed and productivity

AAA Auto Club South SSA users can gain insights into data within seconds thinking of a business question. Prior to launching this tool, requests would be sent to Advanced Analytics with a 2-3 week turn-around time. This enables the business to be more nimble and frees the Analytics team to tackle problems of increased complexity.

2. Increased insight on customer behavior

Within minutes, ACS Public Relations can get current member penetration by branch to prepare for discussions with the Florida government about increased DMV presence within ACS branch offices. Accounting can evaluate cost per road service call by area and membership to determine profitability for road service providers. The SVP of travel can access average fare per passenger by agent to understand which agents are top performers while the Insurance SVP reviews auto insurance quotes by channel to evaluate channel strategies. Branch operations can evaluate revenue stream for specific branches to assist in branch location strategies. The VP of Membership can evaluate renewal rate by product usage to evaluate changes in dues strategies or look at membership join type by channel to balance resources across channels.