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    TIME TO SHAPE UP FOR THE BATTLE FOR THE CUSTOMER 

    Three railway segments have evolved with a focus on new business, competition and demands from the traveller, each of them, with a different goal. 

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Time to reinvent European rail travel

September 26, 2016
Author: Eve-Marie Morgo

In 2010, the European rail deregulation started, and we have been keeping an eye out on how European rail travel has grasped this opportunity. Our recent report Reinventing rail in Europe focuses on the key aspects that are driving passenger rail now

We see that transport across Europe has become more diversified in the way it sets out to place the customer first. New strategies are being put in place by transport providers to entice different travelers to use their services and then become a long-term business and loyal customers.

The modern traveler is driving the nature of the offer, and transport providers realize that the traveler wants more to the whole journey than just the trip, and have their own strategic path in order to compete successfully for the “battle for the customer”. It’s important to look at this as an opportunity to encourage more people to travel by rail. One might say “the obstacle is the way”.

We believe that railways are positioning themselves through 3 distinct segments. These segments have evolved with a focus on new business, competition, and demands from the traveler, each of them, with a different goal. 

The Consolidator 

First, there are the raiways that have traditionally been national carriers, and who have previously dominated their domestic markets, who are now facing unprecedented competition from old and new transport providers. These include:

  • Rail companies from other (often neighboring) markets
  • Car sharing enterprises, bus, and coaches
  • Short-haul airlines

What are they doing to combat this threat and keep their customers loyal? Or do they try to shut out new competition?

The Expansionist 

Then, there are rail companies looking to seize the opportunity presented by cross-border rail deregulation to grow their networks, diversify revenues and attract new customers by operating international services. These are the ‘Expansionists and many of these rail companies already have well-established networks in their domestic market, where they may be the national rail carrier.

Which railways have the rolling stock to manage this, or are there new alliances forming to prepare a greater reach for travellers?

The Launcher

And finally, we see an increase in the international start-up aspect of rail operations. With the ability to operate further afield in a new continent, entrepreneurs are seeing a wealth of opportunity and potential revenue to be had in the backing or setting up rail companies. These ‘Launcher’ companies will have their own unique challenges and opportunities as they will be competing against trusted and established networks, and in some countries, against the only national railway.

How do you start up a new railway, is it possible to get a return on investment?

Each one carefully positions themselves versus competition, and marketing rail has entered a new phase where real-time communication about offers and services is focusing more on customer needs and targeting their favorite sales channels.

In the following weeks, we will take a closer look, with a series of blogs post, on how industry dynamics and customer needs are shaping the way each segment builds its sales strategy to succeed in ‘the battle for the customer’. 

 

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