Last year, the AA account was one of the most hotly contested on the pitching circuit. And little wonder really. First there was the size of the below-the-line budget. Then there was the strength of the brand and the breadth of products that fell under the AA umbrella. And then, of course, there was the dearth of big budget, prestigious accounts doing the rounds.
But it's not just direct marketing agencies that have sweated long into the night over an AA brief. This year hundreds of students at more than 50 colleges and universities also burnt the midnight oil as they tackled a complex and wide-ranging brief for the breakdown service organisation.
And the reward was also financial - to the tune of £1,500 in cash to the winning postgraduate and undergraduate teams of this year's IDM Student Direct Marketing Competition, sponsored by the AA and EHS Brann.
Money aside, what all students are really after is a feel for what it would be like working in the industry and that's why this competition is so important for luring that vital next generation into direct marketing.
It's also a major annual project for the IDM, kicking off at the start of the academic year, when posters and flyers (see above) are sent to the relevant university lecturers. Students can download all the information they need from the IDM's graduate website, www.think-direct.com, and director of graduate services Kate Wilkinson also visits some of the universities herself, giving talks to students - many of whom use the project as part of their coursework - and getting the lecturers on-side.
The result this year was 87 entries, all of which were marked by industry practitioners and finally whittled down to six in the undergraduate category and four in the postgraduate category. At this point, four judges, two from Centrica and two from EHS Brann, voted on the winning teams, which were then invited to pitch their ideas to the agency and client - yet more valuable experience - before the awards ceremony itself in July.
The winning teams - one from the University of Huddersfield and one from the University of Bath (see boxes, page 27) - deserve particular credit this year because of the ambitious nature of the brief. The students were given a context for the challenge, in this case the fact that in recent years the AA has developed a wide range of motoring, financial and travel-related products. This, it believes, will be the real growth area for the business, rather than the relatively mature breakdown market.
With this in mind, the strategic focus for the AA has shifted to cross- and up-selling, a move underlined by an advertising strategy that embraces the full product range under the banner 'Just AAsk'. For the student teams that entered the IDM competition, the challenge was to develop a direct marketing strategy that provided the AA with a coherent and consistent framework for cross and up-selling across the 150-strong product range.
They had to bring the 'Just AAsk' campaign to life, but more specifically they were charged with raising the cross-sell rate from 1.2 products per customer to 1.8 over five years; improving customer value by 10 per cent through up-selling; retaining 75 per cent of customers with two or more products and acquiring 750,000 new high potential customers.
Oh yes, and they also had to give recommendations on how they would enhance the data and develop modelling techniques for smarter targeting; advise on how they would measure all aspects of the activity; formulate a plan for internal communications to stakeholders and staff and provide a breakdown of budget, including agency remuneration.
In short, this was no rush-job cobbled together the night before the May deadline - and it showed. The student teams that made it through to the final round had put serious time into responding to the brief and showed a reassuring grasp of the fundamentals of direct marketing.
Inevitably there were amused laughs from the judges at some of the more outlandish suggestions, but there were also a few wry smiles as the students made some perceptive observations about the challenges facing the AA.
The industry's long-running concerns about where the next generation of talent is to be found should at least be partially assuaged by these students' response to a brief that would have challenged many a fully-fledged direct marketing agency.
POSTGRADUATE WINNERS - University of Huddersfield
Team (from far left): Krishna Patel, Fiona Mackay, Robert Precious, Genc Meraku
After a quick summary of the task in hand, the University of Huddersfield team wasted no time in getting to the heart of the challenge - data. It recognised that the success of cross and up-sell opportunities was dependent on detailed customer knowledge. They correctly assumed that the AA already had a relatively comprehensive database, but suggested that further data collection was necessary.
The vehicle for this was a Just AAsk smartcard called 'One 4 All'. This would be sent to all customers with a letter explaining that the loyalty card would allow the holder to purchase from across the AA range, enjoying various discounts as they collected points. To activate the card, the customer would be asked to either phone the AA call centre or visit the website. Both routes required the customer to answer various questions prior to card activation.
The team also suggested that customers should be incentivised to fill in a feedback form online after they'd had contact with the AA, with the offer of five AA weekend breaks per month. In this way, members who hold the AA in high esteem (so award higher than average scores) could be identified and targeted.
The group's understanding of life-time value (LTV) and its suggestions for predicting customer value particularly impressed Alan Osborne, group marketing manager at Centrica: "The team really got to grips with identifying and then communicating differently with people with a high LTV." Guy Culshaw, business planning director at EHS Brann, noted the team's commitment to testing. For example, one cross-sell proposal to high-potential customers featured three different offers. Once the most successful campaign was identified, it would be rolled out in years three to five.
"Many of the entries were making pretty big assumptions about what would work," he said. "But the starting point for this team was, 'let's see if it works'."
Huddersfield was also one of the few teams to make suggestions for targeting students as part of its acquisition activity. The 'Schools' out for Summer' campaign would target 16-17 year olds with a view to capturing as much data as possible and then targeting them as they enter each stage of their product life cycle.
The data would be collected by a local member of the AA service staff visiting schools in high ACORN-valued areas to discuss road safety. At the end of the discussion, each pupil would be invited to fill out a short questionnaire in return for a road safety pack. They could then be emailed regarding specific products such as AA driving lessons or its Buyacar service.
UNDERGRADUATE WINNERS - University of Bath
Team (from far left): Vivian Joynes, Jan Reichelt, Nathalie Everard, Johanna Issako
The undergraduate entries provoked plenty of debate, but it was the team from the University of Bath that picked up the Gold award.
The winning entry started with an unusually thorough SWOT and competitor analysis. The team went on to suggest that to further increase awareness of the different sectors the AA operates in, the 'Just AAsk' strap should be extended to 'Just Drive, Just Buy, Just Fly, Just AAsk'. Centrica's Osborne pointed out this was likely to cause confusion, but he did praise the team for its breakdown of the characteristics of a high-value customer, describing it as "spot-on".
The team's strategy for cross-selling focused on the 3.3 million single product breakdown customers, as they are the biggest identifiable customer group with only one product. A mailing to this group would list all the available products with the most relevant circled, giving the impression that a member of staff had taken the time to understand the customer's needs. For example, car insurance and car loans would be circled for the under 25s, while for women it would be driving schools (if they had children of the right age) or home insurance.
For retention activity, segmentation to establish high-value customers was key and the group was praised for recognising the link between perceived product value at the entry point (such as breakdown membership) and the likely renewal rate. High product value, it said, would lead to a higher renewal rate and therefore a higher customer value.
Rather than sticking rigidly to the brief, the Bath team was also praised for its more off-the-wall ideas to generate valuable media attention.
For example, it proposed staging a breakdown in the centre of London of a Bentley, complete with motorcycle escorts and a lookalike of the Queen. An AA van would appear to repair the car before the 'Queen' drove off.