How AAA evolved its marketing strategy during COVID-19

With the new challenges brought on by COVID-19, smart marketers are implementing major shifts in strategy to meet changing needs of customers and market uncertainty.

For some, such as AAA, these challenges have been the catalyst to expedite the shift from an analog-heavy marketing strategy to digital, a vision that was well underway at the organization prior to the pandemic.

Driving the transformation toward digital marketing is Yogesh Khadilkar, VP of digital transformation at AAA (The Auto Club Group), who achieves this goal through various means including omnichannel engagement and content management, digitization of customer experience and rigor of full-funnel marketing mix analytics to expand brand awareness and achieve business results across membership, insurance, travel and banking.

Khadilkar was able to harness the momentum generated through a global shift towards digital during the pandemic and respond with agility, increasing the pace at which AAA’s strategy was implemented.

Marketing strategy adaptation: Shifting values and budget allocation

While AAA’s overall marketing vision and strategy has remained constant, significant impacts on widespread consumer focus due to high levels of economic uncertainty, lifestyle changes and reprioritization of cultural values have directly impacted implementation.

This led Khadilkar’s team back to the drawing board to re-evaluate messaging and marketing budget allocation. The result: An increased spending on upper-funnel channels (e.g. connected CTV, television, streaming audio, display, social media) with the need for clear and strategic messaging focused on value proposition, trust and relationship building as opposed to previous campaigns that were heavily influenced by sales and conversion rates.

Strategic budget allocation was adopted early on during the pandemic in preparation for the unknown landscape ahead. This moved investment away from areas where impact was not able to be directly tracked or impacted by COVID-19, such as local events, toward upper funnel tactics that are more digitally inclined toward new consumer behavioral patterns such as increased time spent watching TV and interacting on mobile devices or laptops.

“We shifted our marketing mix, we went more toward the upper funnel to TV, display marketing, the whole idea was to increase the volume of people who want to search for us, and then target them with a sniper focus on search terms, so that you get the ripple effect,” shares Khadilkar. This created a balanced search bidding strategy of branded and non-branded terms.

Creative messaging

With the new allocation of budget targeting upper-funnel channels, a clear need was highlighted for new creative messaging aligned with the current strategy and aimed to instill a specific feeling among consumers: “We’re here for you and AAA has always been here for you.”

Khadilkar is very proud of AAA creative messaging strategy shift. “We didn’t throw out any special offers or discounts. What we gave was value. If you already have value built in you don’t need to sell.” Khadilkar’s team instead focused on showing the value already available to its members, in the form of combined savings and that the membership pays for itself.

AAA struck a delicate balance creating new content successfully and integrating the current tone of the market, directly addressing the consumers’ needs while taking advantage of the brand’s legacy strength. Not an easy feat, this challenge was met through various projects generating brand awareness such as a mural in George Floyd’s honor, career assistance services and a COVID-19 heroes campaign, insurance relief, and the AAA Savings Hack Pack, among others.

Khadilkar highlights the ways in which AAA values its members through support provided during these difficult times: “We have career Assistance Services included in our membership because a lot of people are losing their jobs. This helps them write their resumes and find jobs. That’s how we try to bring it together for what it really matters.”

Spending habits

It’s no surprise that despite the resilience of AAA’s customer segmentation strategy a shift in tiers has been evident. Many consumers have reallocated their funds to more practical expenses shifting spending trends from ‘wants’ to ‘needs’. Disposable income is still available however spending habits are changing as uncertainty influences more cautious spending patterns.

Such caution and behavior change has been evident in travel patterns. We now see the purpose of travel shifting away from work based trips (7 percent) toward travel for personal reasons, such as visiting friends/family or recreation. Travel is also becoming more regional with only 6 percent of travel internationally.

Internal support and focus: A top down support

Khadilkar emphasizes that two key drivers for making this strategy a reality was strong senior leadership support and relentless creative effort by all teams to enable a collaboratve effort and execute the marketing mix budget strategy. There was support all the way from ACG CEO Joseph Richardson and chief operations and technology officer, Shohreh Abedi, to put trust in the teams abilities and analysis, which made converting strategy on paper a reality in business results.

Looking ahead: Holiday season and beyond

The holiday season is always a special time of year, but the joy shared amongst family and friends is needed now more than ever. People are ready to move on to a new story, a new focus away from the pandemic and difficulties arising as a result. AAA will continue to be aware of and meet the needs of its consumers while also helping to shift attention to a more positive experience, lifting spirits and sharing the joy of the holiday season.

Embedded in this strategic shift of consumer awareness will be a focus on retention-based marketing within the current membership base through a mix of branded and non-branded campaigns that complement the push on upper funnels. SEO will be a key part of the strategy in driving volume as will retention-based activities.

To hear more from Yogesh and to learn how to adapt your marketing strategy during COVID, watch this on-demand webinar.