SCOTRAIL CASE STUDY
Advance- Providing Sevices to our best customers
Compiled from conversations with;
Alan Pratt – Marketing Manager – Caledonian Sleeper and Advance
Graeme Macfarlan – Marketing Manager First ScotRail
The introduction of a loyalty club was a franchise commitment for FirstGroup when we took over the franchise in January 2005. Our predecessor already had in place a very basic loyalty scheme called Select which formed the basis for the development of Advance. This we used to best advantage by using Select members as a research audience to understand what the new Advance scheme should look like.
Also, our Advance target market was based on commuters, accounting for around 35% of current business. What we effectively wanted to do was protect this vast segment of regular travellers by adding real tangible value to their ticket purchase through membership of the Advance scheme.
Our first challenge was to recruit existing Select members and other qualifying customers to the new scheme. Initially, the main channel was targeted mail, with an incentivised mail piece used to encourage existing Select members to reapply for the new Advance scheme. At the same time, we undertook an extensive recruitment campaign, targeting new members online through the web site and using posters, leaflets and promotion in the free First Scotrail newspaper at stations. All applicants were issued with a membership card containing a unique membership number to quote/use when against Advance offers.
The initial mailing was 28586 and the number of positive responses was 827, a return of 2.8%. Though this process was moderately successful, we wanted to drive more Select members over to Advance. We therefore created a second campaign where we mailed the membership pack to 20,000 key Select members who had not applied for Advance, thereby enrolling them, by default for the new scheme.
With the main recruitment phase completed we had 22,500 members for our budget when we had originally targeted 20,000. The emphasis has now changed somewhat with two other issues having become priorities;
Firstly, we are looking to drive as many members as we can to opt for contact by electronic media. It had always been our intention to make Advance more “web-centric” as Select had been mail based and, as a consequence, clunky and inflexible. Contact by email is a cost effective and efficient way of running loyalty schemes as the use of web pages and web forms is a straightforward way of offering benefits and collecting membership details. Also, the Market Developer system provides a “Preference Centre” module which allows recipients to click through to their own record on the Database and make any changes they want. Therefore, for these members, the Database is largely self service and self cleaning. Also, when applying, members can submit a password which gives them access to a second tier of services on the website. This allows us to develop a genuine dialogue with our members.
Secondly our aim is to get members to use their membership card. At present and going forward it is our intention to have the card used by customers as the redemption mechanic for special offers, particularly those on the Advance microsite. For example, free upgrade to First Class at the weekend, on-train special catering deals etc have already been made available to members on presentation of their card. The objective of this is to increase the utility value of having the card that will reinforce membership status. We are increasingly making co-branding offers where we encourage the 3rd party organisation to accept the membership card rather than, say, a voucher as a mechanic for redeeming the offers. Indeed now the majority of 3rd parties that we work in partnership, both in print and via the web, accept the membership card as the qualifying criteria.
Members receive a Newsletter 3 times a year with a host of offers, again to encourage people to register to online contact.
We continue to seek the views of members via the Advance microsite to ensure that product development opportunities are identified as well as getting feedback on previous offers. These surveys are then held against the client record within the data warehouse
How is the Database Structured and Maintained? Segmentation Systems Used. How is the Data Cleaned and what tools are used to do so?
We are extremely lucky in having a management system that allows us to hold any piece of profile information that we could possibly wish for. It also allows us to select from our database on any of those variables. One of our drivers in Marketing is to improve our knowledge of our customer base and we do this in any way we can. Everything goes back into MarketDeveloper and we can then analyse and report at will with the on-board tools. This raises the question, if we have access to the ability to hold and then segment on any piece of profile at any time do we really need a profiling system? The answer is a categoric yes because of the relative paucity of our current knowledge. Nonetheless we will re-visit this question periodically although we do take every opportunity we can to build our knowledge of our most important customers
We are currently looking at integrating geo-demographic profiling / modelling into our Marketing system and have had an entire slice of our data profiled. Fortunately it can handle this type of integration very straightforwardly and we have been receiving advice on how we can take use of the profiling system further. Combine what we know from the profiler and the spatial referencing of our customer data and that will give us a very powerful targeting tool for our network.
One of the great liberations of the way we have organised ourselves is that we don’t have to involve ourselves in the time consuming ‘nitty gritty’ of preparing and maintaining the database. Many of the feeds are now automated from our ticketing and reservations systems, the campaign channels are ‘closed loop’ so, for example, when we mail out the undelivered go straight to external data capture and are captured directly onto the system. Customers can handle all their data protection choices through the Preference Centre and email broadcasting, reporting and response handling is done by MarketDeveloper. This approach is maintained with data cleaning in that our SLA covers the running of all our data against the Suppression and Preference files at agreed intervals. So the data is downloaded, cleaned and uploaded without us having to do anything apart from pay the match charges when the invoice arrives….bliss! Bearing in mind how ‘thin’ our Marketing resource is, this blend of system and services really does allow us to concentrate on what we are paid to do and what we do best – Marketing.
What Evidence is There of Success= The ROI case expanded. How is this measured?
There are 3 measures of the success achieved to date
The number of total customers registered for the scheme has steadily increased since the launch in April 2005. Total membership current stands at circa 22.5k against a stated target of 20,000.
Feedback of third parties has been very positive and their willingness to extend their work with First ScotRail into 2006 is proof of this. We will be extending this into other non-related projects and co-branding exercises. Calculating direct ROI on this investment is difficult because 3rd parties are unwilling to integrate the Advance Cards into their EPOS systems. Nonetheless we perceive it to have been very successful.Most recent email campaign achieved an opening rate of 40%, mail campaigns have generated 47% returns in one recent case. This benchmarks well against rail and industry standards.
What are the Plans for the Future- what's next on the Agenda? Where would you like to take your Operation over the Next 2/3 Years ?
The key development for the near future is to increase membership figures further for 2 main reasons:
Improves our ability to regularly communicate with more of our customers.Generate more incremental promotional revenue through cross selling.
This objective will be achieved through ongoing promotion of the scheme and its benefits, but also through expanding the scheme joining criteria. At present only Flexipass and Season Ticket holders can join, but consideration is currently being given to open membership upto Sleeper and Business Class customers also.
Continue to move members to e based communicationsOur current campaigning (Jan 2006) can only be fulfilled by reference to the web site and we are confident that this will continue to gradual increase in web use.
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