Inspire 2014 – AAA: Target Marketing with Predictive and Geo-spatial Analytics

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AAA’s goal is to provide the highest degree of customer service to its members. As such, great effort is placed on developing intelligence to ensure the appropriate number of retail units in locations that will have the best touch points. In this session we’ll explore how AAA uses geospatial analysis to help pinpoint key locations based on traffic, but also in a way that provides branch managers with better insight into marketing to people who are most likely to transact at that location.

Daniel Mathieux, Director of Marketing Insights & E-Business, AAA

Published in: Technology, Business

Inspire 2014 – AAA: Target Marketing with Predictive and Geo-spatial Analytics

  1. 1. #inspire14 AAA CONFIDENTIAL Target Marketing with Predictive and Geo-spatial Analytics Daniel Mathieux Director, Marketing Insights & E-Business American Automobile Association
  2. 2. #inspire14#inspire14 Agenda AAA and Geo Spatial Analysis Types of Analysis Retail Trade Area Enhancement 2
  3. 3. #inspire14#inspire14 Types of Requests for Geo Spatial Analysis AAA and Geo Spatial Analysis • Investigation of specific target locations for Club stores • Sites for AAA Car Care, Travel or Insurance Center • Membership Sales and/or Opportunity • Business Line Sales and/or Opportunity • Opportunities for AAA Partner Product/Service Usage 3
  4. 4. #inspire14#inspire14 Typical Items included in a AAA Geo Spatial Analysis AAA and Geo Spatial Analysis 1. Convenience and ease of access 2. Proximity to member population 3. Member DriveTime and Distance 4. Population by time of day 5. Membership penetration and growth opportunity 6. Business line usage and opportunity for growth 7. The Executive Summary addresses findings pertinent to the project purpose 4
  5. 5. #inspire14#inspire14 1. Convenience and Ease of Access Geo Spatial Analysis of Multiple Locations • Define and establish the area of study for an accurate visualization • Locations may be existing or potential • Display locations with road structures and natural boundaries to see the impact on access • Observe how close stores are to one another 5
  6. 6. #inspire14#inspire14 2. Proximity to Member Population Geo Spatial Analysis of Multiple Locations • Member data has been geocoded • A pinpoint map is used to picture where members live in relation to the stores • Members are highly concentrated around Store 1. • Members are less concentrated around Store 2. 6
  7. 7. #inspire14#inspire14 3. Member DriveTime and Distance Geo Spatial Analysis of Multiple Locations • Grid analysis shows a high concentration of members near Store 1. • Member concentration is less around Store 2. • Most members are within a 10 miles or a 20-minute DriveTime (purple squiggly line). • Store 2 is within the 20-minute DriveTime from Store 1. Member HH -Low (Below 40.5) Member HH -Below Average (40.5 to 135) Member HH -Average (135 to 440) Member HH -Above Average (440 to 1450) Member HH -High (Above 1450) Territory Boundary 5 Mile Radius 15 Mile Radius 20 Minute DriveTime Area store Study store 7
  8. 8. #inspire14#inspire14 4. Population by Time of Day Geo Spatial Analysis of Multiple Locations • Census data (Employee count) is added to review the Daytime population. • The grid map shows the area around Store 2 is more densely populated during the day. • The shift in population, the Daytime (Employee) population, exhibits the increased opportunity for store use. Employees -Low (Below 2) Employees -Below Average (2 to 15.25) Employees -Average (15.25 to 115) Employees -Above Average (115 to 870) Employees -High (Above 870) 5 Mile Radius 15 Mile Radius 20 Minute DriveTime Area store Study store 8
  9. 9. #inspire14#inspire14 5. & 6. Membership and Business Line Needs Single Purpose Centers, Sales & Opportunity Analysis • Census and AAA data are used to forecast sales and opportunity. • We define current AAA customers for each business line. • Income, household count and other Census data are used to profile customers and potential customers in the surrounding area. • Data is imported from AAA sources, such as travel, ERS, auto buying, insurance, vehicle repairs. • The opportunity for sales or usage among members and non-members is calculated. 9
  10. 10. #inspire14#inspire14 AOS Branch AAA Member HH AAA Member Population Experian Consumer HH Experian Consumer Pop Employee (Daytime) 2013 Census HH 2013 Census Pop Study Branch 1 36,050 66,624 114,129 195,152 212,814 166,841 411,446 Study Branch 2 35,185 64,898 115,338 197,605 214,097 167,454 410,965 Study Branch 3 57,420 129,886 205,752 350,386 331,357 243,425 614,358 Geo Spatial Analysis of Multiple Locations 7. Executive Summary and Reporting • After reviewing the Study area’s 15-mile radius, the results are totaled and provided in an Executive Summary. • The Club has the largest opportunity for membership growth and Daytime customers in Study Branch 3. 10
  11. 11. #inspire14#inspire14 • A pinpoint map gives a close look at the road layers, natural boundaries (water, park) or club territory boundary. • The grid map visualizes the population groups. • The display method depends on the data and features to be shown. Displaying The Details Geo Spatial Analysis of AAA Locations 11
  12. 12. #inspire14#inspire14 • Ohio is served by multiple AAA clubs. • The club headquartered in central Ohio has 31 stores. • The store service areas overlap at 15-mile radius, 20-minute Drive Time. • Overlap occurs even at 5 miles and crosses club territory lines. Enhancing Store Analysis with Retail Trade Area 15 Mile Radius Club Territory Ohio State Boundary store Office 12
  13. 13. #inspire14#inspire14 Project Objectives Retail Trade Area Project • Define the realistic market area for each store. • Provide the ability to measure store performance, profitability, products and services used, penetration of members served. • Identify individuals and households by trade area for marketing and reporting. • Identify members underserved by the club network of 31 stores. 13
  14. 14. #inspire14#inspire14 Project Requirements Retail Trade Area Project • Use the industry method that best meets club needs. • Associate each member with only one Trade Area. • Maintain member-to-trade area relationship automatically and promptly. • Identify trade area population segments and delineate the customer mix by segment. 14
  15. 15. #inspire14#inspire14 Industry Methods Retail Trade Area Project • Deterministic – The boundary is the time or distance most customers travel to the store used. Trade areas are likely to overlap. • Proximal - Assign area closest to a store. This may exclude some customers. • Probabilistic – Travel distance or time is combined in a model with store attractiveness, availability of competitors, rural or urban setting, population density, traffic volume and patterns. 15
  16. 16. #inspire14#inspire14 AAA Methodology Retail Trade Area Project • The proximal method is the basis for AAA Retail Trade Areas. • Member address data was used to identify the closest AAA store. • Each household and member is assigned to the closest (Home) store. • Transaction data was used to identify members with store activity. • Trade area boundary is the average distance traveled by members to their Home Store, the closest store, plus two standard deviations. 16
  17. 17. #inspire14#inspire14 Customer Mix by Member Segment 75.2 23.5 1.3 Home Foreign Out of Territory • Home = Home Store members • Foreign = Club Members from another Home Store, commuting or traveling • Out-of-Territory = Members from another club 17
  18. 18. #inspire14#inspire14 A Trade Area tool is developed in the club marketing database Retail Trade Area Project • The Retail Trade Area boundary for each store is recalculated automatically as more members use their Home Store. • The 2-year look-back for transactions is automated and reflected in the Retail Trade Area tool. • Changes in the data are reflected immediately, i.e. new members, members with a change of address, new non-members in the trade area are automatically associated with the corresponding store. 18
  19. 19. #inspire14#inspire14 Trade Areas Displayed in a PinPoint Map • A pinpoint map shows member households in each store trade area. • Trade areas with similar household counts are the same color. • Size differences reflect the difference in average customer driving distance. 19
  20. 20. #inspire14#inspire14 Map Shows Members Out-of-Network • Member households outside the store network are shown in bright pink. • For these members, travel to their Home Store exceeds the distance current customers travel. 20
  21. 21. #inspire14#inspire14 New Capabilities Useful for Store Management Benefits for Club Operations • Measure store performance and profitability • Set realistic goals by store • Monitor the trade area population size and demographics for changes indicating a need to relocate or add a store • Improve access and options for members out of the store network • Predict sales and activity for new or relocated stores 21
  22. 22. #inspire14#inspire14 Abilities to enhance service and communication Benefits for Marketing • Identify business line opportunities by store • Customize service delivery to trade area • Develop marketing tactics to meet the store business objectives • Use consumer and member data to personalize communication relevant to the market segments. 22 MemberCustomers MemberNoStoreTrans PastMembers NonMembers Population Segments
  23. 23. #inspire14#inspire14 Summary and Conclusions • Visualization tools show detail that is especially useful for site evaluation. • AAA uses geo spatial analysis to evaluate and select sites for full and specialty service based on physical and projected opportunity analysis. • Retail Trade Area delivers enhanced capabilities for store evaluation and customized marketing. Daniel Mathieux dmathieux@national.aaa.com 407-444-8528 23
  24. 24. #inspire14 THANK YOU!

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