Talk about silos.

Only a few years ago, California State Automobile Association had separate departments and IT systems for every service it offered

Talk about silos.

Only a few years ago, California State Automobile Association had separate departments and IT systems for every service it offered —membership, insurance, road assistance. Some units had systems going back 40 years.

But that had to change when the group, an Automobile Association of America franchise, introduced E.piphany software for analytics and campaign management.

Within eight months, managers could see every product or service purchased by CSAA’s 4.2 million members in one place.

But that capability failed to lift response rates or ROI, according to Cyndie Beckwith, vice president of customer experience for CSAA. Worse yet, retention, while still a healthy 88%, had actually dropped by a couple of percentage points.

Part of the dropoff could be attributed to the decline in the travel market after 9/11, but some of it was also due to the disarray within the association.

“Something was preventing from using (the new system) the way we had intended,” said Beckwith, speaking at the Gartner CRM Summit. “We were not getting the bumps we were looking for.”

Analysis revealed that the problem was not with the technology but with the silos, Beckwith said. For starters, every product had its own manager, and they tended to market only to their own customers. Few were using the data available to them.

Then there were the horizontal departments—data analysis (responsible mostly for pulling lists) and integrated marketing (which seemed to do little but enforce logo consistency).

Beckwith and her marketing colleagues knew they couldn’t overhaul the whole company with its 6,000 employees. So they revamped those departments and their relationships.

Two new units emerged: Customer Relationships (responsible for doing demographic segmentation, purchase pattern analysis and other things); and brand management (devoted to understanding customer behavior, then using that to create and execute campaigns).

At that point, the product managers were told something they had never heard—that the marketing folks “were going to be accountable for increasing response rates and ROI.”

Armed with the knowledge that the marketing people were in the boat with them, the product managers began turning to them for help.

And there was so much more available. For example, the data/marketing units segmented CSAA’s members into cohorts or blocks. They were rated as cooper, bronze, silver, gold or platinum. They also started purchasing demographic information so that see could see just what stage a family was in.

The results?

CSAA pulled a 1.48% increase in membership retention (above the control group) last year. And average response rate for auto insurance jumped from 1.64% in 2002 to 2.37% in 2003. Finally, travel lead conversion hit 3.9% in 2003 (it wasn’t tracked in 2002).

And it is now doing regular mailings to welcome new members, and to target certain segments—like members who have never called to get towed.

Perhaps because they see little reason to remain without that, those members have only a 20% to 30% retention rate. “We remind them all year long of the other benefits, and that that yellow truck will be there when they need it,” Beckwith said.

What’s next?

CSAA now wants to extend its reach to other customer touchpoints besides mail. To that end, it is adding E.piphany’s service, sales and interaction advisor applications.

“We still have nasty back-ends,” said Beckwith. “Our vision is to create single front end for call center rates. They still have to open multiple windows—let’s give them one screen, maybe two.

She admitted that CSAA is not yet “fully leveraging the Web.” But it plans to develop a strategy within a few months.

Beckwith’s conclusion after this experience? “CRM is a marathon, not a sprint.”