The rise of mobile technology and social media means that consumers today have never been more connected or influential. We live in a world where many people are growing accustomed to working, shopping or keeping in touch from anywhere, at anytime. With smartphone penetration expected to reach 90 per cent in the next three years and the advent of mainstream 4G services signalling a much faster mobile experience, this rise of the digital consumer is only set to increase.

The challenge

In the rail sector this trend is already having an impact. Passengers using connected devices can choose how and when they interact with rail operators and expect instant gratification, which usually means a quick, convenient online service – whether to check for disruption to their services, timetables or to book tickets. Customers are more likely to take recommendations via social media channels before deciding which travel operator to use and which to avoid. They are also more likely to trust other passengers as a source of information – for example around disruption – than they are official sources.

For rail operators, further competition from alternative travel options like low cost airlines and coach operators is a challenge. At a time when consumer spending is down, these alternatives are more attractive, adding pressure to find innovative ways to retain existing and attract new customers. The evolution of digital and mobile technology has sparked a power-shift between businesses and consumers, for rail operators this means their passengers are more in control than ever before.

I believe there are three crucial challenges for the rail sector. Firstly, a 24/7 connected world means customers expect an instant response. Secondly, more choice for consumers means more power in their hands and increased competition in the market.

Thirdly, with the digital consumer landscape becoming complex, businesses in the rail sector need to innovate and find new channels for communication. All of these challenges are also opportunities which can be met with innovative services, using clever technology and enhancing these services with constant connectivity.

Meeting the challenge with digital solutions

Increased customer choice means increased pressure to retain passenger loyalty

Passengers today have more choice. They know what they want, how much they want to pay and with access to price comparison sites and findings from annual national passenger surveys impacting on decision making, customers can research alternative providers at the touch of a button. This degree of choice is making it tough for rail operators to keep their customers returning.

The starting point for fostering loyalty is to truly understand your passengers. The rapid evolution of mobile technology may have transformed the passenger’s world, but technology has the power to do the same for rail operators. Smarter use of insight available through digital engagement can help rail operators understand more about their customers than ever before.

Data and analytics tools can help provide a deeper insight into passengers’ behaviour and needs. For example, understanding why they are travelling and how often they make a specific journey, right through to understanding what they need to make their overall experience, from booking to arrival at their destination, as hassle-free and enjoyable as possible.

By using the insight, rail operators can find ways to differentiate from competitors, inform marketing plans and offer targeted promotions that benefit passengers.

Innovative technology that enhances journeys holds the key to customer satisfaction

Rail operators need to keep pace with the rapid evolution of mobile technology. Customers want a more informed and integrated experience, where they can manage tickets and access relevant, real-time information – not only about their journey but also about their destination. Rail operators need to ensure they have reliable support in place to deliver.

Employees are crucial to delivering the best passenger experience and social media is becoming an integral tool in handling customer complaints. But social media must be integrated across organisations to be truly effective. Ensuring social media teams are connected with customer service employees through mobile technology will allow them to address problems faced by passengers faster.

Mobile technology is becoming indispensable to employees servicing our railways too. Equipping Network Rail trackside engineers with smartphones and tablets allows them to access information about technical challenges they are facing while on the job.

The ability to capture information digitally and process it in real-time means Network Rail can predict and prevent problems on the tracks rather than fixing them when they occur. This in turn improves efficiencies in service, boosts passenger satisfaction and drives loyalty.

The digital world means new revenue streams for rail growth

As mobile technology evolves, rail operators need to work harder to keep passengers connected throughout their journey. The 4G spectrum auction marked another major milestone in the UK’s journey towards a new generation of mobile technology. With that comes the potential for businesses, including rail operators, to transform the way they work, serve their customers and boost revenue. But this also raises a question in terms of accessibility of these new services on trains – will 4G drive the design and implementation of new rolling stock for example.

From a logistical perspective, 4G will be invaluable in creating a truly flexible UK workforce. With speeds five times faster than 3G, large files can be downloaded and sent while on the move, video conferencing can take place almost anywhere, and realtime data can be sent from the point of source, all without the need for an office, a desk or even a computer. Rail operators can capitalise on this opportunity by ensuring they have a robust infrastructure in place to match these developments – they need to be 4G ready.

The boom of ‘m-commerce’ is set to continue with the arrival of ubiquitous connectivity through universal 4G. More passengers will be shopping on their mobile devices, presenting a huge opportunity for rail operators to work with retailers in travel hubs to generate new revenue streams.

With the right digital engagement tools such as mobile marketing messaging services, rail operators can stay ahead of the competition by offering value-added services to passengers, such as incentive vouchers for refreshments on their journey, deals on taxi services or discounts on visits to local attractions at their destination.

The digital passenger is an opportunity for the rail sector

In today’s hyper-connected world, the amount of data we are generating is growing exponentially. It’s a trend that is creating enormous challenge for organisations across all sectors, from the IT to the marketing department alike, but it also presents some fantastic opportunities.

It’s important to remember that digital engagement isn’t just about products and services, it’s about inspiring change and introducing new ways of doing things – different, personalised ways of interacting with customers. The opportunity to understand more about customers – in turn allowing operators to drive a closer relationship with them by delivering a more personalised service experience is out there, it just needs capturing .

At a time of economic uncertainty in the UK, rail operators that jump on the digital technology and innovation available to create new revenue streams have a real chance to grow, contributing to a boost in the rail industry as a whole.

Anna Holness is managing partner of O2’s Passenger Services practice.

O2 recently launched an initiative to recognise innovation in passenger services and support good causes at the same time. For more information on the O2 passenger services award visit: www.o2.co.uk/enterprise/sectors/passengerservices/innovation-award