AAA offered three membership levels: Basic, Plus and Premier. Each membership was annually renewable. The association wanted to identify who its most profitable customers were and reduce the level of annual attrition. They also hoped to move customers from roadside-only service to other more profitable AAA services, such as travel. Their business objective: To increase average member three-year net revenue by 30%

1. AAA Uncovers More Profitable Customers
with a Customer Value Analysis
How AAA of Western & Central New York Made Sure Their Most
Profitable Customers Weren’t Left by the Side of the Road

2. CATALYST CASE STUDY: AAA
AAA offered three membership levels: Basic, Plus and Premier. Each membership
Background
was annually renewable. The association wanted to identify who its most profitable
customers were and reduce the level of annual attrition. They also hoped to move
customers from roadside-only service to other more profitable AAA services, such
as travel. Their business objective: To increase average member three-year net
revenue by 30%.
Our analytics team began with a Customer Value Analysis to segment High Value
Our Approach customers, Low Value customers and identify trending patterns.
The data clearly showed that, true to the Pareto Principle, the top 20% of customers
generated the highest value. We then asked:
• Where did these top customers come from?
• How do we keep more of them?
• How do we find others just like them?
Next, Catalyst built a Lifetime Value Model to predict who was likely to become
AAA’s best customers within a three-year period.

3. CATALYST CASE STUDY: AAA
• Former members looked more like that top 20% than never-ever members.
What We Learned
It was more effective to make reactivating them a priority
• The membership level purchased did not predict long-term customer value—
people who bought the most expensive membership did not necessarily
become best customers
• The association was spending more to engage certain segments than the
value of their purchase
• Promoting all levels of membership at the same time increased purchase of
the more profitable Plus and Premier memberships
• Our strongest offers produced higher first-year attrition … but over time,
yielded more profitable customers
• Once best prospects were identified, we increased contact frequency
Putting it Into
Action • We developed a specific contact strategy to reactivate former members and
reduced higher-cost acquisition mailings
• We eliminated mail to lowest-value prospects
• A test to former members resulted in a 300% lift over never-ever members
Did it Work?
• After three years, the strongest membership offer produced 50% more paid
memberships
• Providing a clear explanation of all three membership levels increased Plus
and Premier memberships by more than 750%
• After three years, average per-member net revenue is projected to increase
by 30%
To learn more, contact:
Mark D’Amico 110 Marina Drive
Director of Business Development Rochester, NY 14626
mdamico@catalystinc.com www.catalystinc.com
585.453.8338
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