RM as a key tool in addressing the VP?

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Information about RM as a key tool in addressing the VP?

Published on February 19, 2008

Author: Meetior

Source: slideshare.net


A strategic case study of an internationally-renowned brand who have taken the initiative to use Relationship Marketing as the tool to remedy a diminishing value proposition.

Project Objectives • Address the following pressing concerns – Drastic and consistent attrition of membership levels • 1.5 Million members, to the current 250 000 base – Steady monthly churn through perceived imbalance of the product value • 9%, of a rapidly diminishing base – Acquisition levels performing lower than member gain • 7%, equates to a monthly drop off of 2% • Key Impact Influencers – Internal Environment – Member Environment – External Environment • Strategic Audit – Past & Present – Product – Perceived Product Value – Staff – Technological Environment – Past Environment – Current Environment – Communication – Partners – Competitors – International Counterparts – Possible Synergies • Prospective Strategic Guidance

AASA Member Value Proposition • Layering of MVP • Comparative Products (Benchmarking) • Products • New Products (Short, Medium & Long-term Initiatives) • Key Strategic Product Issues • Primary Communication Channels • Objectives of Channels • Tone & Manner • Launch Programme • Retention Programme • Tenure Recognition Programme • Reactivation Programme • Migration Programme • Acquisition Programme • Employee Programme • Key Stakeholder Governance

Top 15 Trends 1. Machines already control us: we now desperately need to learn how to manage them. 2. We are creating and living in a virtual world: we are slowly losing your need for physical connectivity and tactile appreciation. The social impact of this is immense. 3. South Africa is the sixth-largest user of Facebook on the planet: this shows that we are not only techno- savvy, but also have a youth culture that is increasingly becoming disengaged from face-to-face social interaction. 4. “Reflexive irony” is the cornerstone of popular culture: everyone has learnt to present an edited version of themselves (especially on SNS), so your realities and perceptions of each other are becoming increasingly warped and unreal. 5. Brand Me: traditional marketing templates are becoming obsolete — the product no longer defines the consumer — the consumer defines the product. 6. Location-based marketing: the individual is now able to ―choose‖ what information he/she wants to receive. 7. Free news: free newspapers and the internet are altering the media landscape drastically. It‘s still about spreading the news, but the way in which it is consumed and accessed is changing rapidly. 8. The “open source movement”: free software is going to change the technology landscape dramatically. It is a form of ―digital socialism‖ that allows anyone to download, improve and share, software for free. 9. The youth bulge: we are entering a phase where youths outnumber the older generation (with the impact of HIV/Aids exacerbating the situation). We are the last continent on the planet to experience this cycle, and need to plan for it as they did with great success in South-East Asia.

Top 15 Trends 11. Densification of the suburbs: we need to prepare for a new lifestyle in South Africa. In urban areas, a mix of retail, business and residential will become more pronounced and the suburbs will follow suit. 12. “Black diamonds” are breaking the rules: This market does not follow the property mantra of ―location, location, location‖ when buying real estate, but is led more by its connections and obligations to its communities. Oh, and they also dislike the term, ―black diamonds‖ intensely. 13. Living in glass boxes: a strong trend in décor. Open-plan living is now a way of life. Walls and storage units are now being made of glass, which enables you to see your favourite/regularly used objects and have easy access to them. 14. Fashion and the *Zeitgeist: fashion is slowly returning to its 20th-century function as a form of social commentary. The fashion industry has been identified as having the second-fastest creative cycle after technology, so is now an industry being viewed as having more relevance than mere handbags and shoes. 15. Eco narcissism: 2007 has become the year of the cause, but celebrities, politicians, actors and musicians are using the environment/Africa/global warming as a launch pad to enhance their public profiles. 16. The very real need for a holistic perspective: we approach life and business in the 21st century with tunnel vision and are forgetting the interconnectivity of all things — to our detriment. *Zeitgeist the general intellectual, moral, and cultural state of an era

Media Trends - Reading • In South Africa itself, newspaper readership is up 43%, but the mainstream papers are not doing so well. It's vernacular and community focused and tabloid media that are stealing the show. Kwazulu-Natal's Zulu-language newspaper Isoleweze as an example, the Daily Sun, The Voice, Die Son, and so on. Reasons? It's all apparently due to household income increasing and electrification. • And tabloid newspapers are very good at befriending their readers, Getting close to them, exposing corruption on their doorstep, addressing superstition, titillating with local sex scandals and giving you over-the-wall gossip about your neighbours. They're not concerned with the big picture or any analysis or thought leadership of any kind. • The next big thing in newspapers is the very successful Swedish-pioneered model of free newspapers: the Metro which now has 70 editions globally in 22 countries, a readership of 23 million and has galvanised established titles in the Fourth Estate to launch their own free sheets. Locally The Citizen is trying it with its free Citizen Metro – 45 000 copies on 100 buses in Johannesburg. The Sunday Times' The Times, is a more niche marketing version going to an existing subscriber base • So what will happen to print? A world of news consumed via cell phones, mini-computers and electronic ‗scroll' readers – which are in development already. Time will tell.

Why are we here? • There are only 2 basic business objectives for the AA: – Acquisition – Retention • One does not require copious amounts of research and customer feedback in order to ascertain that there is a an ongoing state of attrition of the membership base – which means we are not meeting basic objectives • Churn rate is averaging 9% with acquisition at approximately 7%, a drop off of an average 2% per month • We have to ask ourselves – Have we got a marketable product? – Is the product mix consistent, relevant and cherished? – Are we promoting what we have correctly? – Are we talking to the right people? – Are we talking to anyone? – Are we positioned correctly and geographically accessible? – Are we readily accessible and obtainable? – Is your core services correct? – Have you lost sight of your original goals? – Are members proud of their association with us? • A relationship is, after all, ―An exchange - encouraged by kindred, affinity, or other alliances‖

We have to ask ourselves...? Why are your members not proud of you, as they would be for family, or a dear friend...

Please Consider... • Value means different things to different people • Most brands have no idea why their customers leave them, and assume: – The competition has a superior product – Their product is inferior – Their competitors are competitively priced – Some one is doing better than them • Within your current membership base, you have a diverse demographic and psychographic spread – You cannot be ‗everything to everyone‘ – If you could, you wouldn‘t ever identify a USP – You have no alternative, but to focus on those members who are prepared to bond with your brand – ‗Belonging‘ is an extremely personal choice – There are many reasons why people choose to develop a ‗connection‘ – But if they do develop a crush based on a ‗promise‘, don‘t play Jekyll & Hyde • People can measure value, based on any of the following assets (and more): – Total Experience (overall – Trade Variable (services or goods for cash) – Qualitative Relationship (I choose to be included) – Quantitative Relationship (WIIFM, as Geoff so eloquently put) – By Association of Establishment (virtue of tradition) – The Rub-off Effect (esteem, but only through cherished experiences) – Iconology (identification through imagery) – Ego - Possession (the id, affirmation ) – Sense of Belonging (to something) – Most importantly... Security through Belief in what the brand does for them, PERSONALLY

quot;Price is what you pay. Value is what you get.quot; – Warren Buffet

History • I really don‘t want to reiterate the obvious • There has been documentation presented on where the AA were • The great thing about history, is that it no longer exists • However, history has assisted us in the continual evolution of a brand that really ―stood the test of time‖ • The brand ―AA‖ is a phenomena unto its own, with a wealth of equity behind it - not just locally, but as an international force • Various factors in the past couple of years has undermined this positioning of strength and slowly eroded the equity of what the brand stands for • Through the discussions I have had with various stakeholders, one aspect clearly stands out – a very few had a large role to play in the neglect of this asset • The brand has been dissipated by the inclusion of non-core, unfocussed ―offerings‖, with the aim of increasing the perceived brand value – which, in hind sight, has had the opposite effect (dilution of the brand fabric) • Each ‗pillar‘ that supports the brand, as a whole, believes it is the crucial support pillar, with each one vying for attention and space • It seems, to a certain extent, as though the core focus of the existence of the AA has been corroded by its own internal processes

History Lessons • It‘s always a little easier to identify where you don’t want to be! • We do not want to be a loyalty programme! – Why...? Loyalty Clubs are utilised by retail-orientated organisations to encourage spend, by employing tier-level programmes in order graduate customers into higher categories, based on their value to the brand – Loyalty Programmes are a farce, customers are fickle and will change brands at the first bad experience – Loyalty is earned, not bought • We do not want to be a Club Programme – Why...? Club Programmes are employed by organisations as a profit-generating product, by offering discounts to their members, via their core products (and it is something they must pay a premium for in order to qualify... which they‘ve already earned by default ) – Clubs have a bad reputation globally, and research has shown that customers are finding less value in retail clubs due to proliferation, lack of individuality and the cost of membership (although sports and community-based clubs are still rated, with virtual clubs beginning to generate the highest interest) – Words such as; ―rip-off, self-interest, misuse, useless...‖, are being used to describe some existing retail clubs • These programmes are designed to ―get to know the customer better‖, through the exchange of ―benefit‖ for information... • Customers are becoming intensely protective of their personalities, aptly named ―identity or personality theft‖ • Consumer groups are starting to becoming ‗savvy‘ to organisations who ‗con customers‘ into revealing personal information

Going forward... • One of the biggest challenges is enabling current and potential members to believe in the brand and want/ need/ desire to belong to the brand, once they believe in the brand they would become natural ambassadors • This translates directly to retention and acquisition • If the member doesn‘t believe in the brand, they‘d never advocate it • We need to reiterate the brand‘s values, which are “To champion the member (the people) directive of all forms of their mobility, including their sense of well-being whilst in a state of mobility (or only where we can elevate their trust, whilst immobile) - , as well as satisfying their sense of belonging and reliance on the brand... but only when they ask for it!” • The above, naturally, extends to corporate and fleet members and vehicles • To respond to their needs beyond all expectation, as exclusive AA members, with regards to your core product offering (protection, security and safety) • We need to take ownership of the brand again, as opposed to letting alliances overpower and dilute the brand • Communication seems to be one of the key strategic issues that must be addressed in order for the core brand value proposition to be recognised and acknowledged • The communication, to a large extent, will have to be driven through education, constantly driving the esteem associated with this internationally, established and cherished brand • Before we look at the current and proposed future AASA product offering, let‘s take some time to look at your international counterparts • This will also allow us some insight as to what their product offering is, how they present and package their collective offering and how ours compares with theirs • The MVP programme and brand promise, extends to ALL KEY STAKEHOLDERS, including: – Staff (separate project) – Suppliers/Partners

Tone & Manner Never question the relevance of truth, but always question the truth of relevance. Craig Bruce

Tone & Manner • You‘ve selected a ‗new customer‘... What now? • Are you talking to them? • Are you talking at them? • Are you talking down to them? • Are you consistent? • Does the way you communicate reinforce your promises? • Do you endear trust? • Do you promote a ‗protective presence‘? • Do you portray reliability? • Do you focus on your core product? • Do you communicate vaguely or evasively? • Do you ‗appear‘ to endorse your own product? • Are we the champions of your brand? • Do you live your brand? • Who are you? • How do members (want to) see you? • What exactly are you trying to say...?

Tone & Manner • Guardian – MC, Angel, Attendant, Attorney, Bailiff, Bull, Butler, Caretaker, Castellan, Cerberus, Champion, Commandant, Conservator, Control, Covering, Croupier, Curator, Custodial, Custodian, Custos, Daemon, Defender, Defensive, Demon, Emcee, Factor, Fairy Godmother, Familiar, Fostering, Game Warden, Gamekeeper, Gaoler, Genius, Good Genius, Governor, Guard, Guardian Angel, Guarding, Guide, Housekeeper, Immunizing, Jailer, Janitor, Keeper, Librarian, Lifeguard, Lifesaver, Major-domo, Manes, Master Of Ceremonies, Ministering Angel, Numen, Paladin, Parental, Penates, Preserver, Preventive, Proctor, Procurator, Prophylactic, Protecting, Protective, Protector, Ranger, Safeguarding, Screening, Screw, Seneschal, Sheltering, Shepherd, Shielding, Steward, Totem, Trustee, Turnkey, Tutelary, Vigilant, Warden, Warder, Watchdog, Watchful KEY: Blue – Key Descriptors

Tone & Manner • Reliable – Absolute, Accurate, Adducible, Admissible, Apposite, Attested, Authentic, Authenticated, Balanced, Based On, Believable, Calculable, Certain, Circumstantial, Circumstantiated, Cogent, Colourable, Compelling, Conceivable, Conclusive, Confirmed, Conscientious, Convincing, Cool, Credible, Cumulative, Damning, Decisive, Dependable, Determinative, Documentary, Documented, Evidential, Evidentiary, Ex Parte, Eye-witness, Factual, Fail- safe, Faithful, Fast, Fiducially, Fiduciary, Final, Firm, Firsthand, Guaranteed, Harmless, Hearsay, Honest, Honourable, Imperturbable, Implicit, Incontrovertible, Incorruptible, Indicative, Indisputable, Inerrable, Inerrant, Infallible, Invincible, Inviolable, Invulnerable, Irrefutable, Irresistible, Material, Meaningful, Nuncupative, Overwhelming, Plausible, Predictable, Presumptive, Principled, Probative, Proven, Punctilious, Reputable, Responsible, Safe, Secure, Significant, Solid, Sound, Stable, Staunch, Steadfast, Steady, Straight, Substantial, Suggestive, Sure, Sure-fire, Symptomatic, Telling, Tenable, Tested, Tried, True, Trustable, Trusted, Trustworthy, Trusty, Unerring, Unexceptionable, Unfailing, Unflappable, Unflinching, Non-hazardous, Unimpeachable, Unquestionable, Unshakable, Unwavering, Valid, Validated, Verified, Weighty, Well-balanced, Well-founded, Well- grounded KEY: Blue – Key Descriptors

Tone & Manner • Security – Aegis, Affluence, Aplomb, Armament, Armour, Arrogance, Aspiration, Assumption, Assurance, Assuredness, Asylum, Authenticity, Authoritativeness, Bail, Balance, Bamboo Curtain, Bed Of Roses, Belief, Blackout, Bond, Calculability, Care, Censorship, Certainty, Certification, Certitude, Clover, Cocksureness, Collateral, Comfort, Confidence, Constancy, Conviction, Cool, Courage, Curtain, Custodianship, Custody, Dependability, Dependence, Deposit, Desire, Earnest, Ease, Equilibrium, Expectation, Faith, Fastness, Felicity, Firmness, Fleshpots, Gage, Great Expectations, Guarantee, Guaranty, Guard, Guarding, Happiness, Harmlessness, Homeostasis, Hope, Hopefulness, Hopes, Hoping, Hubris, Immunity, Imperturbability, Insurance, Invariability, Invincibility, Invulnerability, Iron Curtain, Loaves And Fishes, Luxury, Nerve, Overconfidence, Overweening, Pall, Pawn, Pledge, Poise, Pomposity, Positivity, Predictability, Presumption, Pride, Promise, Prospect, Prospects, Prosperity, Prosperousness, Protection, Refuge, Reliability, Reliance, Repression, Rootedness, Safeguard, Safeguarding, Safeness, Safety, Sanctuary, Sang-froid, Security, Self-assurance, Self-confidence, Self-importance, Self-reliance, Shelter, Shield, Smothering, Solidity, Soundness, Stability, Stable Equilibrium, Stableness, Staunchness, Steadfastness, Steadiness, Steady Nerves, Stifling, Strength, Substantiality, Success, Suppression, Sureness, Surety, Surveillance, Token, Trust, Trustworthiness, Uniformity, Upward Mobility, Validity, Veil, Veil Of Secrecy, Velvet, Ward, Warrant, Warranty, Weal, Wealth, Welfare, Well-being, Wraps KEY: Blue – Key Descriptors

Tone & Manner • Protect – Abet, Advocate, Aid, Arm, Armour, Assist, Avail, Bail Out, Befriend, Benefit, Bless, Bulwark, Care For, Champion, Cloak, Comfort, Conserve, Copyright, Cover, Cushion, Defend, Do Good, Doctor, Ease, Ensure, Favour, Fence, Fend, Flank, Foster, Give A Hand, Give A Lift, Guarantee, Guard, Guard Against, Harbour, Haven, Help, Insure, Keep, Keep Up, Lend a Hand, Maintain, Make Sure, Mind, Nestle, Nurture, Patent, Play Safe, Police, Preserve, Rally, Reclaim, Redeem, Register, Relieve, Remedy, Rescue, Restore, Resuscitate, Revive, Safeguard, Save, Screen, Secure, Set Up, Shelter, Shield, Shroud, Spare, Succour, Support, Sustain, Take Care Of, Tend, Underwrite, Uphold, Watch Over As you can see, we have a lot to live up to... KEY: Blue – Key Descriptors

International – AAA/National • Help on the Road and Beyond – Maps – Emergency road service • Life and Leisure – Car Rentals – Cruises – Cruise Lines – Discount Travel – Travel Directions – Online Maps – Trip Advisor – Trip Advisor – Driving Directions • Automotive Services – New Car Buying Tips – Buying Used Cars – AAA Member – AAA Automobile Club – Automobile Association. – Car Loan, – Financial Services – Foreign Currency Exchange – Travellers Checks – Credit Card Offers.

International – AAA/Regional (AZ) • Travel • Maps & Directions • Travel Reservations • TripTik Travel Planner • Vacation Hot Deals • Quick Driving • Disney Destinations • Directions • Quick Getaways • Download Maps • Last Minute Deals • Online AAA Tour books • Insurance • Your Membership • Auto Insurance • Join Online Today • Home Insurance • Renew Your Membership • Life Insurance • Mexico Auto Insurance • Upgrade Your Membership • Pay your Bill • AAA Offices • Automotive • Membership Handbook • Emergency Road Service • Highroads Magazine • Car Buying Services • Auto Reviews • Car Care & Repair • AAA Approved Auto Repair

International – AAA/Regional (AZ)

International – AAA/Regional (AZ)

International – AAA/Regional (AZ)

International – AA/New Zealand

International – AA/New Zealand • Membership – Membership benefits • Roadside breakdown assistance • Member discounts & rates • AA Rewards programme • AA Magazines – Options & fees • Personal Membership • Associate Membership • AA for Business • AA Plus – How to join • Join the AA • Renew your AA Membership • Upgrade your AA Membership – AA Rewards • About AA Rewards • Where to earn Points • Earn Points from AA Credit Card • Special offers & Bonus Points

International – AA/New Zealand • Insurance – Get a quote now • Comprehensive car insurance • Term Life insurance • Travel insurance • Third Party car insurance – Insuring with the AA • Benefits of AA Insurance • Our car insurance products • Our life insurance products • Guaranteed No Claims Bonus For Life – Insurance tips & advice • Insurance glossary • Comparing the various life insurance products • What to do if you're in a car accident • Keeping your house safe while you're on holiday

International – AA/New Zealand • Motoring – Driver licensing & training • Driver's licence & renewals • Driver training • Defensive Driving Course (DDC) • International driving permit – Buying & selling a car • Find a car that suits your needs • Car reviews • Car inspections & history checks • Car finance & insurance – Owning a car • Breakdown & batteries • Register, warrant, service & repair • Fuel & car running costs • Car safety – Motoring tips & advice • Practical motoring advice • Ask Jack • Travelling with your car • Motoring & legal advice helpline

International – AA/New Zealand • Travel – Accommodation • Hotels • Motels • Bed & Breakfast • Bookabach – What to see & do • Activities / Adventure • Attractions • Dining • Events – Transport & rentals • Land transport / rentals • Water transport / rentals • Air transport / rentals – Travelling in New Zealand • Road Trips • Buy AA Maps • Map & directions online • Latest New Zealand highway reports

Product Make your product easier to buy than your competition, or you will find your customers buying from them, not you. Mark Cuban

Product Layering & Segmentation • Just as becomes necessary to segment your customers, in order to define their value to the brand, it is sometimes necessary to segment your products to achieve the same result – Value to the Brand! • This process necessitates the following processes: – Redefine your core product – Identify your segments – Determine whether these segments are relevant – Ascertain whether the segments are linear to your core product – Dissimilation of the entire product offering – Consolidate where necessary (if irrelevant) – In this case, relevancy is determined by value, through the core product (underpinning the positioning) – Define requirements – Based on the extent of the value you believe you need, add additional benefits – Identify value Partners (who share the AASA vision)

The Product Layers • Layer 1 - Getting you Mobile • Objectives – Delivery of the Focus Competencies of the AASA – This is the ―expected‖ service delivery element • Layer 2 - Keeping you Mobile • Objectives – Preventative measures surrounding mobility, through AA Partners – Maintains AASA cost to service, perceived as adding value to members • Layer 3 - Enjoying Mobility • Objectives – Emphasis placed on the ‗enjoyment‘ facet, still delivering AA product – Adding value through mobility benefits, surrounding member‘s lifestyles • Layer 4 - Beyond Mobility • Objectives – Partnering lifestyle-perceived benefits with members‘ ―needs‖ – Sponsorship/co-op opportunities for AASA to fulfil brand promise (Guard, Protect, Secure) • Layer 5 - Experience Mobility • Objectives – Create consistent touch points for members to experience the brand – High visibility events and marketing to enhance and expose the brand and experience of the brand

Advantage vs. Advantage+ - Getting You Mobile Primary Membership Offering Emergency Rescue Services (These will be inclusive of membership fees) • 24-Hour AA Road Patrol • 24-Hour AA Road Patrol roadside repair service Value/Member/Year R2 500 Value/Member/year R5 000 (Value will increase) • Key lockout service • Key lockout service • Flat tyre change • Flat tyre change • Fuel to reach a filling station • Fuel to reach a filling station • AA Battery Service and sales • AA Battery Service and sales • AA Recovery towing service • AA Recovery towing service • Message relay service • Message relay service • 24-Hour Medical Rescue • Recommended Launch Addition • AA Mayday will also cover all costs related to • Locate Me your evacuation or relocation, and will cover your • Stand By You roadside security service spouse and any children up to the age of 26. • Allocate Rx Value Depending on needs at the incident, value • 24-Hour AA Mayday emergency medical Rescue could be in excess of R50 000 • AA Mayday will also cover all costs related to your evacuation or relocation, • Basic Life Support Transportation R1000 and will cover your spouse and any children up to the age of 26. • Intermediate Life Support R1500 Depending on needs at the incident, could be valued at over R50 000 • Advanced Life Support R2500 • Basic Life Support Transportation R1000 • Air Ambulance ±R50 000 • Intermediate Life Support R1500 • Advanced Life Support R2500 • Air Ambulance ±R50 000 • Alternative transport • Need R Value • Overnight accommodation • Need R Value • AA Motorcycle Mobility Units (soft launch) – Ralph to cost & valuate KEY: Blue – Perceived/Actual Value Red – New (Proposed) Products

Advantage vs. Advantage+ – Keeping You Mobile Secondary Membership - Offering Peripheral Mobility Benefits (Inclusive of membership fee) • AASA Telephonic Services • AASA Telephonic Services • Motor-related telephonic legal advice • Motor-related telephonic legal advice • Telephonic technical advice • Telephonic technical advice • Vehicle Maintenance Issues • Vehicle Maintenance Issues • AASA Partner – routed Telephonic Services • AASA Partner – routed Telephonic Services • AA Autobay • AA Autobay • Advice on purchasing and selling vehicles • Advice on purchasing and selling • Selected Security Services Partner vehicles • Vehicle Security Advice • Selected Security Services Partner • Subscriber-based services • Vehicle Security Advice • Mobile Trip Sheet • Subscriber-based services A lot of the above services could be offered via website • Mobile Trip Sheet A lot of the above services could be offered via website • Require R Value • Require R Value KEY: Blue – Perceived/Actual Value Red – New (Proposed) Products Cont.../

...cont/ Advantage vs. Advantage+ – Keeping You Mobile Special rate services (Partner Services) • AA Finance • AA Finance • 1 % reduction in AA Finance on the interest rate that you • 1 % reduction in AA Finance on the interest rate that you would would normally have qualified for normally have qualified for • Potential Saving of more than R3 000 on Interest • Potential Saving of more than R3 000 on Interest • AA Insurance • Advantage+ value differentiator • Motor & Household Insurance • AA Insurance • Define Value • Motor & Household Insurance • AA Membership Disability Cover • Define Value • Place quantifiable value on this • AA Membership Disability Cover • AA Autobay • Create with quantifiable (higher) value on this • A 15% discount on the 2% fee for buying or selling your • AA Autobay pre-owned vehicle • A 15% discount on the 2% fee for buying or selling your pre-owned • Referral to AA Quality Assured repairers vehicle • Advantage+ value differentiator • AA Test & Drive technical and roadworthy tests • Referral to AA Quality Assured repairers • 15% discount from AA Test & Drive • AA Test & Drive technical and • AA Autocheck roadworthy tests • 15% discount from AA Test & Drive • AA Driver Training • Advantage+ value differentiator • 10% discount from AA Test & Drive • AA Autocheck (Average potential value to Member) Rx • Define Value • Advantage+ value differentiator • AA Driver Training • 10% discount from AA Test & Drive • Advantage+ value differentiator (Average potential value to Member) Rx KEY: Blue – Perceived/Actual Value Red – New (Proposed) Products

Advantage vs. Advantage+ – Enjoying Mobility Peripheral Lifestyle Mobility Benefits (Combination of inclusive & special rate services) • Special rate services • Special rate services • AA Travel - services and products (%) • AA Travel - services and products (%) • Require National Accommodation Product (%) • Require National Accommodation Product (%) • Require International Accommodation Product (%) • Require International Accommodation Product (%) • Require Local Carrier Product (%) • Require Local Carrier Product (%) • Require International Carrier Product (%) • Require International Carrier Product (%) • Require Currency Services Product (%) • Require Currency Services Product (%) • Hertz Car Rental • Hertz Car Rental • AA member exclusive rates • AA member exclusive rates • PLUS: additional 100 km free • PLUS: additional 100 km free • PLUS: free additional driver YOU SAVE R310 • PLUS: free additional driver YOU SAVE R310 • Maps, atlases and accommodation guides • Maps, atlases and accommodation guides • 10% Off All AA Publications • 10% Off All AA Publications • Show Your Card & Save International Benefits • Advantage+ value differentiator • AA Auto Shops • Show Your Card & Save International Benefits • Continual Value • AA Auto Shops • TE Stores • Continual Value Advantage+ value • Continual Value differentiator • AA Branded Products • TE Stores • Continual Value • Continual Value Advantage+ value differentiator • AA Branded Products • Continual Value Advantage+ value KEY: Blue – Perceived/Actual Value differentiator Red – New (Proposed) Products Cont.../

...cont/ Advantage vs. Advantage+ – Enjoying Mobility (Travel Product) • Inclusive in membership fees • Inclusive in membership fees • Quarterly AA Traveller Magazine • Quarterly AA Traveller Magazine • Actual value R60 • Actual value R60 • Biannual Magazine • Biannual Magazine • Require Value • Require Value • Online Routing – Web based service • Online Routing – Web based service • Road information – Call Centre • Road information – Call Centre KEY: Blue – Perceived/Actual Value Red – New (Proposed) Products • There is absolutely no doubt about the value that the Travel Product could provide to your members • But, at this stage, I believe that special mention should be made about the focus and positioning of the Travel Product, within the AASA stable of added value products • A definitive and focussed plan should be developed to define the role of this product, and how it compliments, supports and underpins the core product and the brand positioning • Based on discussions, I believe there may be a huge possibility that the Travel Product may overpower the core product through sheer volume • If you decide to embark on this route, you may have to develop a communication plan that doesn‘t position travel as the primary focus • Even though, internationally, travel is a massive part of the business, it is clearly defined as a sub-brand of the AA • Until such time as the AASA brand stands steadfastly on its own , positioned by the core brand product, perhaps the larger scale model should be looked at as a delayed phase 2 launch

Advantage vs. Advantage+ – Beyond Mobility Tertiary Membership Offering Mobility-related Lifestyle Benefits (Special rate products & services, through AA Partners) • BP * • BP * • Instant value delivery at all BP partner stores • Instant value delivery at all BP partner stores • MTN • MTN • Connectivity (bundles, lower-end, affordable) • Connectivity (bundles, higher-end, higher-perceived value) • Cellular-related products - enable us to • Cellular-related products - enable us to communicate with communicate with the member the member • Vodacom • Vodacom • Connectivity (bundles, lower-end, affordable) • Connectivity (bundles, higher-end, higher-perceived value) • Cellular-related products - enable us to • Cellular-related products - enable us to communicate with communicate with the member the member • Bosch * • Bosch * • Diagnosis • Service – value R50 OFF • Diagnosis • Service – value R50 OFF • Low value perception • Low value perception & require Value Diff for Ad+ • Midas * • Midas * • Tyre & Shock-absorbers Partner • Tyre & Shock-absorbers Partner • Depends on outcome of current negotiation • Depends on outcome of current negotiation • All require Value Differentiator for Ad+ * Show Your AA Card & Save could be used as an identifier at these partner outlets KEY: Blue – Perceived/Actual Value Red – New (Proposed) Products /cont...

...cont/ Advantage vs. Advantage+ – Beyond Mobility Tertiary Membership Offering Mobility-related Lifestyle Benefits (Special rate products & services, through AA Partners) • ADT or AN Other • ADT or AN Other • Home Security Products (cameras, Electric fencing • Home Security Products (cameras, Electric fencing & access) & access) • PG Glass * • PG Glass * • e-Car • e-Car • Free 10-point safety check • Free 10-point safety check • R50 voucher on your next service • R50 voucher on your next service • Low value perception & require Value Diff for Ad+ • Low value perception • Data Dot * • Data Dot * • X-Buy (Instant Gratification) • X-Buy (Instant Gratification) • Home Security Packages • Home Security Packages • Computer-related products • Computer-related products • GPS products • GPS products • Digital Cameras • Digital Cameras • Hands-free kits • Hands-free kits • Blue Tooth devices • Blue Tooth devices Ad+ Membership will enjoy transparently-presented, higher-value discounts and services than Ad Membership * Show Your AA Card & Save could be used as an identifier at these partner outlets KEY: Blue – Perceived/Actual Value Red – New (Proposed) Products

Advantage vs. Advantage+ – Experiencing Mobility Simple, yet amazing Surprise & Delights programmes • Birthday Programme • Birthday Programme • Competitions to drive members to touch • Competitions to drive members to touch points points (experience the brand) (experience the brand) • Web, ground level stores & call centre • Web, ground level stores & call centre • Specially-designed experiential programmes to • Specially-designed experiential programmes to allow members to create a physical bond with allow members to create a physical bond with the brand, i.e. events: the brand, i.e. events: • Driver Training • Driver Training • Anti-hijack • Anti-hijack • I love my car day • I love my car day • Security workshops • Security workshops • Basic vehicle maintenance workshops • Basic vehicle maintenance workshops • Self-defence classes • Self-defence classes • Surprise & Delights • Surprise & Delights • Totally random & unexpected, but with structured • Totally random & unexpected, but with structured calendars and suppliers in place calendars and suppliers in place • 3rd party lifestyle vouchers, which could be • 3rd party lifestyle vouchers, which could redeemable on a monthly or quarter-to- be redeemable on a monthly or quarter basis (these must be family-based quarter-to-quarter basis (these must be family- benefits), i.e. based benefits), i.e. • Spar Vouchers • Spar Vouchers • The Fish Market Vouchers • The Fish Market Vouchers These benefits should be the same as Advantage benefits, but higher in value, and highly transparent/visible KEY: Blue – Perceived/Actual Value Red – New (Proposed) Products

Key Strategic Issues - Products • Key strategic issues that may affect the launch product offering and the perceived sincerity of the value of the MVP – Layered Product Offering • When a brand re-launches their product offering, it sometimes requires visible and apparent change in order for customers to notice that actual change has taken place • The increase in membership will be substantiated by the re-launch, but will the content of the MVP be enough to substantiate the increase in membership fees? • For example, if customers have not been ‗studying‘ the benefit structure in the past, no matter how compelling the alterations in look and feel, the customer may still not be convinced to ‗read the product‖ messaging • We‘ve ascertained (and agree) that the value of core layers (1 & 2) is apparent as it is, which has lead us to the decision not to add additional products (especially to the core offering, as it may fragment the central buying idea – which is Roadside Emergency Services, ) • The cumulative (potential) value that is calculated for the products would undoubtedly (more than) justify the membership fee and increase, but the visual product should equate in aesthetic value • Even though you redefine or restructure your entire product offering, there‘s no (or little) visible change, which could result in a ―face value‖ scenario (the value will not change if they believe their is no change)

MVP Launch • Launch Date • These products were specifically targeted for April 2008 launch • Objective • Retain members through the ongoing addition of value-added products and services • Acquire new members through existing and updated touch points • Communication • Benefit Guide • Magazine • Website • Call Centre • Partner Shops • PR • Message • You‘ve listened to your members – here‘s the additional value • The 1st 2 layers of the core product would always be the ‗heroes‘ • Communicate actual value of the product, in comparison to the cost of membership • The messaging for this level of the offering would have to continually be reiterated, until existing and new members become familiar with the value • Operations • DM‘s could facilitate the evaluation of their products • Create value for each product, by layer, and then for the entire product

Value-added Membership Introduction of New Products • Not positioned as new tiers • The product offering must remain exactly the same as for Advantage and Advantage+, but be seen to cater to specific demographic and psychographic needs, i.e. • Life-stage • Lifestyle • Geographic location (introduction of ―needed or desired‖ benefits, geographic-specific) • Income • 2, 3 & 5 Year membership options/packages • Sliding scale (the longest period being most financially attractive), after all, retention is the first stage of acquisition • Create Quantifiable Value • Family packages • Target all multi member homes with a ‗lucrative, irresistible‘ offer, to perhaps include members of the family who are currently non-members • This, by its very nature, adds a value paradigm to the offering • Ideal opportunity to bond with young adults, who have reached the cut-off date, and are ready for their own product (natural progression) • Cost of membership based on a sliding scale • Couple • Couple with 1 child • Couple with 2 children, etc • Create Quantifiable Value

Value-added Membership • Launch Date • If these products are approved by the board • I imagine we could launch in April 2008 • Objective • As per our core product re-launch, we aim to continually and consistently add value to our members, and thereby curb the loss of members and strengthen our base • Distribution Channels • Call Centre • Website • Benefit Guide • Magazine • Partner Shops • Message • Realigning our products to address the mobility and lifestyle expectations of our members • Key Players • Finance - • Require costs • Advantage • Family (2 – 5 members) • 2, 3 & 5 year Membership • Advantage+ • Family (2 – 5 members) • 2, 3 & 5 year Membership

AASA Resident Lobbyist • Lobby for changes in legislation - in the interest of the member • Attempt to convince public officials to favour a certain cause or take a certain action • Directly related to any of your core products • This will position AASA as the ―Champion‖ for the motorist • The beneficial trust spin-off for AASA is enormous – The Authority • High visibility, high exposure • Sizeable and credible PR value • Extremely confrontational • The aim is to create controversy (but not for the sake of) • The choice between which issues to choose or decide upon, should essentially be conceived by the member (they are the cause) • Issues that may impact on mobility, or their lifestyle, directly surrounding their mobility requirements • Become the ‗voice‘ for the people • This could evolve into the greatest influence to purchase • Once Joe Public sees the support that is advocated from AASA on behalf of their members, he will want to participate • Nothing creates a sense of belonging more than knowing you have a ‗big brother‘ figure in your corner

AA Lobbyist - Rollout • Launch Date • This is one product offering that may take time to implement, gain momentum and earn the trust of the member • Objective • Communication • This is a PR dream and should be channelled through PR exclusively • This product would drive itself • Message • AASA are prepared to stand up to unfair legislation, in the interest of the members • Marketing • Need to assess the areas of legislation we would target (from member perspective) • HR • Find the candidate • Operations • Which of the chosen ―causes‖ we are able to access • Weigh up the cost against an ―intangible‖ return

Additional Potential Short – Medium Term Product Development • Products • Road safety blinkers/flashers • Runners • Walkers • Cyclists • Motorcyclists • Running Clubs • Walking Clubs • Reflectors • These could be used as a social responsibility initiative or as a sales tool (endorse safety, as well as create branding) • Scholar Patrols • Runners • Walkers • Cyclists • Motorcyclists • Running Clubs • Walking Clubs • Vast range of books relevant to your core offering • Safety: • On the Road • Travelling • Exercising • High-jacking tips • The Gold Guide? (Similar to UK‘s Green Guide)

Additional Potential Medium – Long Term Product Development • The following benefits would be particularity beneficial to your ‗new‘ target member, i.e. Home-based assistance and services, as well as home security • Home Loans • A natural extension to existing ‗financial products‘ • Perceived as high value • Reinforces the desired ―Champion‖ brand quality • Trauma Assist • Call centre-driven services, focusing on non-emergency medical and family assistance • Rape counselling (and perhaps cover and escalation to hands-on assistance) • Poison centre • Ambulance assistance at home level • Bond Services • To compliment the above • Seek preferential rates on behalf of members • Home-based, with unique value (to that of competitors) • Enhancing AA Rapid Response Infrastructure • Security is by far one of South Africa‘s top of mind concerns (down to individual level) • Besides reinforcing the mobility facet of the product offering, we now have to address the security of the member, whilst incapacitated • This must not be positioned us as a ‗security company‘, but as the AASA, providing a sense of well- being as part of the product • The initial ―soft launch‖ will facilitate a learning organisation, which would allow for monitoring, correction, exiting or enhancing the offering

Product Enhancements - Rollout • Launch Date • If these products are approved by the board (and there‘s buy-in), I imagine we could launch in April 2008 • Communication • Call Centre • Website • Benefit Guide • Magazine • Partner Shops • Message • Added value • ―Volume-based‖ discount • Operations • Logistical issues • Require costs • Advantage • Family (2 – 5 members) • 2, 3 & 5 year Membership • Advantage+ • Family (2 – 5 members) • 2, 3 & 5 year Membership

Product Enhancements - Rollout • Launch Date • The products are ones that came through on research, from members or from ideas from our international counterparts • These are products which we could investigate down the line • Communication • Partner Shops • Website • Benefit Guide • Magazine • Call Centre • AA Finance • Marketing • Define whether home-related financial products (a) are desired (b) complimentary to core • Message • Added value, through building on our current offering • Financial & Branded Product • DM‘s • Source products • AA Finance • Discuss the feasibility of adding additional financial products

Communication Messaging • Imperatives – Permission • It has become the consumer‘s prerogative to command the channels through which, and manner in which, they want to receive their communication • We would have to embark on an exercise to garner this information from them (with cleaver coercion from you, to facilitate your preferred channels) – Easy in, Easy out • Just as consumers get to choose their communication means, they are also entitled (and demand) to and opt-in, opt-out facility, at their convenience • The newsletter subscribe and unsubscribe, from the same members, is being utilised more and more • They want the option to receive communication, but at their request • Make archived newsletters available to members who wish to bounce their communication choices – Relevant • Consumers are inundated with messaging • If it‘s not core or related to your peripherals, it‘s irrelevant • The next messaging they don‘t read... may be yours!

Communication We listened to what our customers wanted and acted on what they said. Good things happen when you pay attention. John F. Smith

Communication Channels • Have you communicated? • What do the these different channels do? • How are they perceived? • How are they received • Are we reaching the correct customers? • Is the messaging appealing enough? • What is their objective? • What is the ROI? • How do we measure response? • How interactive are they? • What can they do for the brand? • What can they do for the product? • How can they endorse business objectives?

Communication Messaging • Imperatives (continued) – Consistent • There is only one thing worse than not communicating with your members, and that‘s creating a platform, which creates expectations, and not following through • If a decision is made to communicate regularly, or in a certain manner, you cannot move the goal posts • Consumers may be the – K.I.S.S. • Keep it simple silly... • Have a point, keep to the point and make it! • Even though some channels encourage a proliferation of information (e.g. the website), you should still maintain an ease of access and use • Your new market is not illiterate or stupid – they are simply becoming accustomed to having their needs met – Personalised • Spam, unsolicited communication, proliferation of communication... are the norm, not the exception • Personalisation used to be a ‗warm-fuzzy‘ tool that encouraged bonding • Now it is being used as a tool to address the person, get their attention and prove your communication is not unsolicited

Communication Channels - Consistency • There is one significant imperative that the brand will have to address • Consistency is of paramount importance • Every single customer touch point should be consistent, whether the customer is driven to the call centre, web, magazine, mail or events • When looking at any form of Customer Relationship model, companies are primarily so focussed on creating single view of the customer, they tend to forget about the image that they create in the eyes of the customers • If customers receive conflicting messaging, they tend to develop perceptions of fragmentation and dissipation • This becomes crucial for an industry such as AASA • The brand is attempting to create a position of strength, utilising all the powerful descriptors that are meant to protect, serve and defend • If you cannot create a consistent presence for the members, they will loose faith in the brand and product rapidly • My recommendation is to populate the internet website with all the information that is possibly available on the brand and products • Once you are satisfied with the content, the only should we look at the production and implementation of the remaining channels

Communication Channels & Membership Segments • Utilise the web as your primary communication medium • Drive members and non-members to the web • Addresses all your needs in one dynamic package • There are members who do not have access to the internet • Develop cohesive communication plans that address each member • It‘s cost effective • It‘s easily maintained • The functionality is infinite, the possibilities enormous • Integration into the call centre and support staff • Technology has enabled affordable applications that could address these needs • Staff integrated into the backend of the internet platform • Partners integrated into the backend • Enabler of member tracki

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