Overview
Success Stories
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RAC
RAC attended its first roadside breakdown a century ago. For many years, the RAC boasted a history of loyal life-long members. Motorists joined because their peers or parents did and members proudly affixed the famous silver metal badge as a permanent motif on their vehicles. The unrelenting boom in car ownership has ensured roadside recovery remains a prominent element of motoring life. But, whereas today’s motorists continue to demand the same core services to keep them “on the move”, they are unlikely to show such loyalty.
“Customers are promiscuous, accustomed to shopping around,” says Dean Turley, database development manager for the RAC. With increasingly competitive pressures from new entrants, roadside recovery organizations are expanding their portfolios to offer customers more and better services.
To compete and grow its business the RAC recognized that it needed to buck the trend and increase loyalty among customers to reduce churn. The RAC response was to realign its business and place the customer at the center of all its marketing effort.
Smarter communications with customers
The objective was to recruit, retain and cross-sell. Turley believes smarter communications with customers will enable them to meet this challenge. “Most people recognize the RAC as simply a breakdown service. That may be a major part of its business, but there is more to the RAC,” says Turley. “We have one business that everyone knows about and many more that they don’t. For example, we deal direct with car manufacturers, including Renault, Nissan and Ford, which offer membership with new car sales, we run highly successful travel and traffic management services and run a hotel accreditation scheme amongst others.”
Turley’s role is to present these other faces of the RAC brand. These attract new customers, but are also valuable in building stronger relationships with existing ones. “Our communication objective is that customers gain true value from the RAC, whether they use our breakdown service or not,” claims Turley.
The way business has evolved is reflected in the IT infrastructure and customer database that supports it, with computing centers, data sources and data stores widely distributed across the UK.
The need for greater responsiveness
Turley, who has been with the RAC for seven years, described the customer marketing process. “Typical to most large organizations, all customer data generated by individual business units used to be fed into a central database. In our case, all data was sent by the business groups independently to an external marketing bureau where it was compiled onto a single marketing database. That database contained information on around ten million policies and five million customers.”
“The system worked fine for bulk mailings, but was not suited to truly timely communications,” says Turley. In a typical customer marketing cycle, the RAC provided files once a month, which were then updated, often taking up to two to three weeks. Consequently, any communication planned for its customers was at least 7 - 8 weeks out of date. The old system lent itself best to small numbers of very large campaigns, not only due to the time involved in getting campaigns off the ground, but also the cost.
“It was frustrating that we couldn’t be reactive to customer’s experience of the organization. To target customers who had recently experienced a roadside incident you took the risk that the event was no longer front of their minds by the time that they received the mailer or that they might have moved or that they may even have experienced a further roadside incident.”
A more dynamic marketing approach
The RAC decided to re-orchestrate the way it was marketing to customers. “We needed to do something different,” explained Turley. “We recognized that our key asset was our customer base and at the time we couldn’t communicate effectively with them.” The company took a corporate decision to identify a more dynamic customer marketing approach and embarked on a tendering process with the major IT houses, specialist database bureaus and large consultancies.
The objective was to consolidate multiple data sources into a nightly updated data warehouse. Campaign management software would sit on top of the data warehouse to provide automated management of communications. “From the campaign management tools we wanted something we could pretty much take off the shelf and use as it stood,” said Turley. The RAC selected Marketing Director, the campaign management solution from Chordiant Software, the leader in orchestraing business processes for large service-based companies. Chordiant’s Marketing Director was selected over products which looked good on paper but had no reference sites. “It was important for us to see the system deployed and working on a live customer site. Chordiant has high profile organizations in Europe and the US already running their solutions successfully to automate the customer management process,” added Turley.
Reacting to customers in a timely manner
The first campaign on Marketing Director went live within three months of the contract award. Marketing Director is now used to manage communications to the organization’s five and a half million members.
The key benefit for the organization was the ability to react to customers’ experiences with them in a timely manner. From a marketing cycle of eight weeks, the RAC could now react to a customer experience with a tailored mailer within days. “When I get in at 9.00 am I know that the information in the database is accurate up to events at midnight the previous day,” says Turley. “We are now in a position to respond to a customer experience with an automated communication within days rather than months, while the incident is still fresh in the
customer's mind.”
Higher response rates
Three to four years’ member information is held within the database enabling the organization to use this data to target prospects. The philosophy is that if customers have left the RAC, then they have gone to a competitor. Chordiant Marketing Director enables the company to automate the process by which these prospects are sent membership promotions around the time of their lapse date with other breakdown service providers.
Having moved away from a bureau service which was most cost effective in large volumes, the RAC is now running, typically, 12 campaigns at any one time compared with just three with the previous system. “Now we can do more weekly and monthly mailings to much more targeted groups of customers. The volume of mailings has not changed overall, but significantly, we have seen a 25 percent increase in response rates”, said Dean Turley, Database Development Manager, RAC.
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