Marketing for the American Automobile Association (AAA) sounds like a dream assignment. AAA has an 89% renewal rate, an indication that it has saturated the market. Its chief mission then is to make up for the 11% it loses every year.
To fulfill this mission, AAA partnered with content marketing agency Props 18 months ago. So far, Props is taking a different approach than AAA has taken in the past. It uses no influencers and instead uses AI and asks content creators to pitch normal stories, which appear on AAA’s sites. To date, some 50 content creators have contributed articles, photos and videos. AAA then uses paid media on the creators’ social media channels to drive traffic and memberships. (AAA diverted some of its membership marketing budget from advertising to content.)
Some 48% of AAA members acquired through Props are under the age of 45, compared to 32% for all of AAA. To date, the partnership has been such a success that AAA has expanded it to new campaigns and products.
Mediapost recently spoke with Joseph Perello, founder and CEO of Props, and Scott Lugar, the CMO of the AAA Alliance. Below are excerpts from their conversation:
Mediapost: What do you say is AAA's biggest marketing problem right now? And how are you approaching that?
Joseph Perello: My challenge is: How do I introduce AAA to a whole new group of people that for whatever reason didn't consider us? So, one of the things I'm trying to do is make sure that whoever I talk to about AAA, there's relevance there. How do I make sure that anybody I talked to that they see a relevance? Really, the challenge is relevance.
Mediapost: It seems like it's the grand dilemma of how to draw younger people to the fray. Is that accurate?
JP: It's one of the pieces. Part of my job is to introduce it, but that’s true with any product or service. Anytime I can introduce someone to what you're selling, whether it's a credit card, a new way to rent a car, a motorcycle, if I can introduce you to that early, it gives me a lot of time to get you to convert. This is from a pure marketing sense. I don't care if I can introduce to get some type of your mind space, or your airtime—which we know it's really tough these days to get any type of mindshare, or part of your attention today as a consumer regardless how old you are. If I can do that earlier, in my experience, it gives me that much more time to walk you into becoming a member or someone who will use AAA services.
Mediapost: Is there a point in which people tend to drop AAA?
JP: I don't know. If your parents had AAA growing up and you had it, and then between 18 to 25, you kind of fall off because you're bulletproof. And then you come back. So it is absolutely cyclical. At any given time we have 35%, around that penetration, in any given market. But typically, 65% of people in any given market, either [had a membership in] AAA, or know what AAA is.
Mediapost: How are you doing outreach right now? And what do you hope to achieve?
Scott Lugar: I've got two sides of my core business at AAA. As a CMO, I've got accountability, for creating that awareness for our products and services. And every one of those products or services, they're using traditional and digital and non-digital channels. So we still do direct mail where, depending on the business line, I've got a lot of partners, so I'm working with the Viking Cruise Lines of the world, and the Best Westerns.
But I'd say from a digital perspective, we're exploring every single piece of the territory defined [and] we're trying to find the things that stick. But specifically in the digital side of things for new member acquisition, that's that kind of roadside assistance, our bread and butter, we're doing everything from the stuff we're doing on with Props around content, to explore what we could do in our own YouTube channel, to exploring different ways to better target using direct mail. So we're across the board.
Mediapost: What spurs most people to join AAA?
SL: Prior to the iOS changes about 50 percent of the members that we were acquiring through our Content First approach were under the age of 45. And for AAA, only around 35 percent of members acquiring at the same time, so the same channels, were under 45, they had a bigger share of members over the age of 45, 55, and 65. In addition to that, about 7 percent, or 8 percent of the members that we are acquiring were under the age of 25. And less than 1 percent of the average AAA member during this timeframe that we measured was under the age of 25. So that encouraged us a lot that we were okay.
Mediapost: What about TV? Is that on your radar?
JP: We pushed a lot of TV out the door, really during COVID because at that time I didn't want to be tone-deaf. We're aware that probably wasn't the time to push a lot of heavy selling in direct mail and other channels. So we retrenched and suppressed the direct mail and put those dollars into really more of a brand awareness play [via] digital and traditional levels of media. If you're sitting at your house and your car hasn't moved in two months, three months, three weeks, well guess what, we can still show up and help you. [So the idea was] hey, just in case you need us, we're still out on the roads. If you want us to show up and help you in any way, let us know.