For years, Toc’s have dictated the kinds of services offered to customers, such as booking methods and pricing strategies. Less time and money has been invested in getting to know customers. Now, thanks to new technology and deregulation, travellers have greater power. And in this changing landscape, operators may find it difficult to adapt their businesses and stay on track if they fail to understand the needs and expectations of their customers.
A Western European rail survey from Accenture shows that travellers have high expectations of technological change for travel1. Many are expecting to be using their mobile as an electronic ticket as early as this year and they anticipate that public transport companies will step up communications via social media.
The survey, of passengers in the UK, Belgium, France, Germany, Italy, Spain, Switzerland and the Netherlands, demonstrates many customer expectations – something that operators need to understand if they are to capitalise on current opportunities and challenges.
It revealed five key findings that should be considered by those seeking to grow their share of the deregulated and increasingly competitive rail market:
1: Travellers want a one-stop booking platform on their PC’s – and will likely expect the same on their mobile devices
Online has become the norm, with 71 per cent of respondents saying they frequently use the internet on their computers to purchase tickets. In fact, passengers are more satisfied with online booking than with any alternative method.
In addition, 17 percent of those surveyed, particularly younger passengers, said they frequently book tickets using their mobile devices. If other technologies are any indication, the early adopters will set the trend for mobile booking, making it a channel for companies to prepare for. The survey indicated that in two years’ time, mobile devices are likely to be an increasingly important booking option.
When it comes to mobile ticketing, rail operators trail other consumer-facing industries such as entertainment and airlines. So the gap between the number of respondents currently using mobile devices to book tickets and those who would like to do so in the future may have more to do with rail companies’ ability to offer relevant mobile services than a reluctance in passengers to use them.
2: Pricing transparency and ticket refunds pose the biggest challenges for passengers
Consumers want consistent and clear pricing offers
Traditional yield management pricing strategies can confuse and deter passengers. For more than half of the survey, for respondents who said they experienced booking difficulties, finding the cheapest option poses the biggest hurdle. Respondents had few opportunities to conduct comparative pricing within a rail company (e.g. peak vs. off-peak travel).
While the ability to offer sophisticated pricing options remains important to rail companies’ strategies, lack of visibility into the best prices can lead passengers to switch operators or transport modes in favour of clearer pricing and perceived best value. Operators that can clearly communicate a price position – in the same way that retailers often guarantee the lowest price – will differentiate themselves.
Consumers would welcome price alerts
A large majority of respondents would welcome the opportunity – after they have already booked tickets – to receive price alerts via e-mail or text with better ticket offers. For instance, a family who booked their holiday tickets three months in advance, thinking that they would get the best price, may be dismayed to find that the price has been halved days before departure.
Refunds can be a block for consumers
More than half of the respondents in the 45–74 age groups said they had incurred challenges booking or using online platforms. The most frequently cited problem was refunds. All age groups felt very strongly about improving refund mechanisms.
Many operators are wrestling with the question of whether better pricing strategies and transparency can play a role in helping them maintain their position as key distributors of their products and the survey highlights the challenges in this area.
3: Rail operators need to provide real-time multichannel information to improve the passenger experience throughout the journey
Travellers no longer see their journey as starting at one rail station and ending at another. Passengers want to plan their journey before, during and after train travel. The majority of respondents wanted more information about their destination when booking, with information about local transport modes, availability and timing of on-going travel and maps of the destination city centre the most popular. Having an integrated journey planner with distance, time and GPS readings available at booking time interested the majority of respondents, particularly the 18–44 age range.
Accenture believes that rail operators are uniquely positioned to integrate all of the relevant travel information and provide a valuable service at the point of need. But operators would need to position themselves as the natural choice for the travellers to turn to when they are planning trips or looking for travel information en route to their destination. By doing so, they can maintain their connection with travellers beyond the booking and journey.
One channel that could aid the demand for better information dissemination is social media. Given social media’s relatively low cost, ease of use and scaleability, rail operators can employ it to engage with communities of existing customers and attract new ones. It can also help rail operators provide door-to-door services with reliable and consistent information before, during and after the trip. The research points toward a growing demand for multiple channels of information.
4: Most passengers are willing to pay to enhance their on-board comfort, and being connected to their mobile devices and having access to infotainment are top of the list
The on-board experience remains key to customer satisfaction – and mastering the basics is essential. The majority of travellers welcomed more frequent cleaning of toilets above all other amenities, followed by sun shades. Deeper shelves for overhead luggage also ranked highly. Older travellers (ages 45–74) placed greater value on cleaner facilities, as well as cars banning the use of mobile phones.
While passengers still want rail operators to improve the basics, they are seeking better levels of service and more comfort. Whether in economy or premium class, the majority of travellers, particularly younger and frequent passengers, think that connectivity and entertainment should be provided for free or be included in the price of their package.
Toc’s working closely with rolling stock manufacturers
Rail operators may need to work more closely with rolling stock manufacturers to enhance the design to meet evolving consumer expectations. In addition, operators can offer passengers different ambiences or service/comfort levels, like the new Italian train company NTV. It runs state-of-the-art ‘Italo’ trains linking Italy’s major cities and offers enhanced services, including passenger Wi-Fi, an on-board entertainment portal and a cinema carriage.
Services such as wireless internet connectivity on trains can be a competitive advantage over other transport modes and can attract business passengers. Since Wi-Fi services and electrical points would likely become the norm rather than the exception in a few years, rail companies will need to hone other service offerings to improve the travel experience for their passengers. Operators can also tie the service offerings into ancillary purchases and extended door-to-door services offered through multiple channels.
5: To enhance loyalty, rail operators will need to offer customisation and rewards
Travellers expect customised offers, and the majority of respondents are willing to share preferences
If rail operators wish to compete successfully with other travel modes, they must meet passenger expectations, particularly those of younger and frequent travellers. They want to see the same level of customised travel information and special offer that they see in other industries. Consumers are becoming less tolerant of a ‘one-size-fits-all’ solution. Thanks to the increasing use of analytics in the retail and consumer industries, passengers are accustomed to receiving a variety of personalised offers based on past behaviour and interests. It is only natural that consumers expect rail operators to refine their traditional segmentation beyond age groups and engage them with customised travel information, promotions and offers.
Accenture’s research showed that the majority of travellers are willing to receive this customised information and offers if they are based on preferences or past travels. Overall, 82 per cent of respondents would volunteer travel preference details, enabling rail operators to personalise offers and information with passengers’ cooperation. Harnessing traveller data will help rail operators create greater intimacy with passengers and deliver the kind of customer experience they want.
Passenger expectations have evolved
As the survey findings indicate, rail consumer expectations have evolved and will continue to do so at a rapid pace. Operators should recognise the significant challenges they face as they adopt a consumer-oriented approach in a liberalised market, and transform their operations accordingly. Those that increase agility and adapt will maintain a competitive advantage.
To read Accenture’s rail and public transport research go to: www.accenture.com/publictransportation
Mark Elliott is director, Infrastructure and Transportation Services at Accenture.
He also chairs the UK Intellect Transport