Transportation companies: How to use customer data for more effective marketing

25 October 2013

Raj Thapar

Raj Thapar

Director, Enterprise Performance Management

In an era of increased peak-time congestion, many parts of the UK's road and rail networks are now so close to capacity that even a minor incident can impact significantly, with knock-on delays affecting travellers by the thousand.

Conversely, transport spending across all modes has reduced significantly, with Transport for London alone expecting cuts of £80 million over the next two years. As a result, operators are being forced to find more cost effective ways of delivering their services and maintaining their assets.

Higher levels of car ownership and more goods and workers are being transported. The cyclical nature of the transportation industry has led many service providers to focus on short-term profitability - often at the expense of customer loyalty, which drives future growth.

But where the industry has made moves in recent years has been in its use of large data volumes. Like most sectors, transport isn’t immune to the lure of big data, a concept which has emerged as a potentially game changing tool to engage customers as part of an information-driven marketing strategy. Given the added factor of Omni-channels, such as email, search, social media, telephone and direct mail, the potential for real innovation in the industry can become a reality.

Utilising data big and small

This step is the key towards capitalising on data-driven marketing. Operating a management system to alert you when customers are becoming inactive; to re-establish your brand value; and, to reward customers that have referred others to your business are key insights. By creating a reliable system within your database, you’ll be able to use your behavioural information to engage customers directly.

While embracing data is one thing, utilising it effectively is another.

Smartphones have become point-of-sale devices for passengers and give operators a window into their journeys and everything around them. More so than ever before, the wishes of the retailer and the customer are in alignment: customers want better services and are willing to trade information for it, and retailers want better customer insight and are willing to incentivise passengers to get it.

While increased data isn’t a panacea, it offers tangible benefits for the transport sector.

Data is the secret to innovation

Transport for London (TFL), which carries more than £1 billion passengers annually, stores vast amounts of data on its Oyster Card. With around 4.5 million customer email addresses on its database, TFL uses the data to contact its customers on service related messages, to great effect for the Olympic Games.

Like other forward thinking organisations, TFL intends to integrate the use of data into its marketing strategy, with increased customer demand for individualised information. Further afield, the transportation department of east China's Zhejiang Province announced earlier this year that it would introduce big data in traffic management to deal with gridlock throughout the region. So what does this mean? It means transport companies are using data to get to know the customer more.

Points win loyalty

Where transport can learn customer innovations is through the air transport industry in how it engages with customers.

Although always seen as a more premium, higher cost service, the disparity between rail fares and domestic flights has been turned on its head. It could conceivably be cheaper for a consumer to spend five hours on a train from London to Edinburgh and pay more, than fly there in a fraction of the time.

Air travellers love frequent flyer programmes, and will often shop around in order to build up their points.They're also popular with the airlines themselves, who see them as a cost-effective way of building customer relationships and enhancing brand loyalty. Australian airline Qantas, which last year announced losses of $244m (AUD), recouped $231 million through its loyalty programme, which amassed 8.6m members.

With the concept having extended into supermarkets and banks, the time to include it on road services such as buses and rail networks could provide new dimensions in customer loyalty and relationship building.

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About the author

Raj Thapar

Director, Enterprise Performance Management

The overriding theme of my career has been helping organisations tackle complex financial consolidation, reporting and planning problems and creating effective EPM solutions. As a result, they are able to report accurate data efficiently and make more informed business decisions using an effective EPM strategy. I am able to draw upon my background as a qualified accountant, qualified lawyer and consultant to help me do this.

Over the last twenty years, I have helped organisations determine and realise their EPM strategy. I have worked across three continents, for clients such as AIA Group, Tata Global Beverages, Sumitomo Corporation and Old Mutual Plc. Although my clients come from a variety of sectors, I am currently focused on helping organisations within the Public Sector & Services sector, with a particular interest in Finance Transformation and the collaborative definition of the organisation's Record to Report strategy.

I have a keen interest in cutting edge technology and get a buzz out of leading teams develop complex consolidation, reporting and planning solutions.

Bluefin and SAP S/4HANA - welcome to the one horse race

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