Stuck at a junction

Sponsoring the England football team was the brand’s high-water mark, but if Green Flag can clarify its insurance links, it could be a force to be reckoned with again, says Matthew Gorman

motoring%20assistanceIn the same week that breakdown recovery company Green Flag appointed Shop to its £10m advertising account, the future of its marketing team came under the spotlight following a restructure at parent company Royal Bank of Scotland Group (MW last week).

Green Flag first hit the nation’s roads in 1971 as the National Breakdown Recovery Club. Ten years after launch it had signed up 250,000 members, which by 1989 had grown to more than 1 million, and in 1984 the company became part of the National Parking Corporation (NPC), the first of a series of owners.

Green%20FlagThe Green Flag brand launched in 1994; the same year the company became the first brand to sponsor the England football team. The high-profile four-year deal raised brand awareness to new heights, according to one sector analyst; a feat he says has yet to be repeated.

Andrew Paterson, senior consultant in the automotive strategy division at Pragma Consulting, says: "In 1994, the football [deal] did a lot of good for brand awareness. But recently Green Flag has brought out some pretty shocking ads that didn’t do anything for branding or to clarify its market position. Its brand awareness was fantastic after the England sponsorship but, apart from this initial investment, that is now falling off."

The company followed its England deal by becoming title sponsor of the British Formula 3 Championship in 2000, and by sponsoring the 2002 British Touring Car Championship, which it later extended for a further two years. Neither tie-up has had the same impact as its football sponsorship.

Green Flag spokesman Nigel Charlesworth says: "We had most recognition through our England sponsorship, which was used to bring a new brand to British consumers. These things are once-in-a-lifetime opportunities. But we’re not currently looking at any other sponsorship."

The company claims 5 million members and handles up to 1 million calls a year at its incident management centre in Pudsey, West Yorkshire, making it the UK’s third-largest breakdown recovery business UK. According to research group Mintel, Green Flag held a 17% market share of the vehicle recovery services market in the UK last year. The RAC has nearly 7 million members and a 24% share, while the AA, the country’s largest roadside recovery business, has 14.8 million members and a 51% market share.

However, Green Flag operates a different business model to the RAC and AA. Unlike its rivals, the company does not maintain a fleet of recovery vehicles, but instead has a UK network of 6,000 recovery agents on call and more than 15,000 technicians across its European network. The company launched its European motoring assistance services to UK customers in 1999.

NPC and Green Flag were bought by US company Cendant Corporation in 1998 and a year later, Cendant sold the breakdown firm to Direct Line Group, owned by Royal Bank of Scotland Group, for £220m.

Paterson believes that being part of RBS is one of the company’s biggest strengths. "What Green Flag does have, which is fantastic for breakdown companies, is a link to an insurance firm. It gets thousands of calls daily and you can, essentially, bundle in the service with the policy."

But he cautions that the company is not using this link to its full potential. "I think it is very uncertain of its relationship with Direct Line; it’s not mentioned on the website. But I think if the company can pin down some brand clarity and sort out the Green Flag brand identity, it could be a force to be reckoned with. The strengths of Green Flag and Direct Line mean it could become a top-two contender."

Evidence of Green Flag’s ambiguous profile within the RBS portfolio was offered up earlier this month during the final stages of the brand’s £10m advertising review. Rather than pitching to Green Flag, it is understood that agencies have been presenting to members of Direct Line’s marketing department.

Charlesworth says its two rivals have had a 70-year head start but that achieving the number-two spot is not the company’s principal aim. He says it is always looking to grow, but taking the RAC’s place is "not something we’re constantly thinking about – but yes, it would be something we look at."

Green Flag has been able to differentiate itself by focusing exclusively on breakdown services. It does not offer other services and has been able to sell itself as an expert. One initiative still being offered today is the £10 cash-back scheme launched in 1991 for customers who have not been seen by an agent within an hour of contacting the call centre. In recent years, the company’s rise in membership has been achieved through retail and wholesale channels.

Charlesworth says: "We’ve built on the success we’ve had over the past ten years by being a brand that offers customers a genuine alternative to the other big players that is competitive on price.

"We aim to make sure our product is relevant to people, competitive and that the service is what people expect."

Facts and figures
Green Flag

1971    Launched as National Breakdown Recovery Club in Bradford, West Yorkshire

1989     Membership grows to more than 1 million, prompting a move to new headquarters in Pudsey, West Yorkshire

1984     The company is sold to National Parking Corporation (NPC)

1994     Renamed Green Flag and signed as the first sponsor of the England football team

1999     Green Flag is sold for £220m by Cendant Corporation to Direct Line Group, a Royal Bank of Scotland company. Cendant had bought NPC a year earlier

2000     Green Flag becomes title sponsor of the British Formula 3 Championship and headline sponsor of Road Safety Week.

2003     Green Flag signs a two-year extension to its sponsorship of the British Touring Car Championship, which it starts in 2002.

2005     Launches a fleet of branded taxis in Birmingham, Bristol, Leeds, Liverpool, London, Manchester and Newcastle.

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