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National railways facing competition

December 12, 2016
Author: Marta Desviat

Welcome to our last blog in our series on how to win the battle for the customer'. In this blog, we introduce the "consolidators" and how they position themselves as the open access to markets across Europe is slowly taking place. 

When was the last time you heard 'prepare to repel boarders''? More than likely in some ‘black and white’ naval pirate movie starring Gregory Peck or Burt Lancaster! However, this could also be the message national rail companies are sending throughout their ranks, as open access takes hold across Europe.

National railways are facing unprecedented competition from rail companies from other (often neighbouring) markets, or from entirely new operators, driven by the 4th Railway Package expectations. National carriers must consolidate their strong position in their domestic market to maintain and attempt to grow their market share. But what are the steps that consolidators will need to follow to win the battle for the customer

  • First, they will have to prioritise the traveller experience, to inspire customer loyalty.
  • It’s also vital to explore new ways of generating revenue, not only to reinforce their position but also to fund the improvements in communications and services that will help them to attract new customers.
  • In Italy and Sweden, we see that competition is creating new rail travellers, as services are improved and customer contact becomes personalised, without the need to press gang customers onboard.
  • Whilst deregulation opens the threat of competition, it also provides consolidators with the impetus to modernise their approach: from systems to operations, distribution and customer service.

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3 ways to repel the boarders

To consolidate their market position and to drive the modernisation that will support this, consolidator rail companies must focus on three priorities:

  1. To invest heavily in innovation, the key differentiator from the competition.
  2. To make steady progress to increase competitiveness by making a faster, leaner and more profitable railway.
  3. To meet evolving market demand, a focus on time to market, costs, and risk.

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Information to signal in advance

The key to creating a customer-centric business lies in the effective use of information. Historically, rail companies have not always known a great deal about their customers. However, collecting and managing passenger information more effectively will allow rail companies to better understand their passengers’ needs and expectations – and, in turn, to meet them.

 

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Find new treasures

To gain the competitive advantage over new entrants to the market, who may be unencumbered by legacy systems and infrastructure, consolidator rail companies may look to new IT modules to improve operations and result in a more effective and convenient experience for the traveller. Partnerships with hotel companies and destination services could also help consolidator rail companies grow their customer base and provide a new source of revenue, without having to find a hidden treasure map.

Reinventing rail in europe: the battle for the customer

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Reinventing rail in europe:
the battle for the customer

The Battle for the Customer will ask how rail can use it to strengthen customer focus and look to other industries for best practices in terms of the strategies and mindsets that drive change.