IN LESS than 12 months time passengers will be able to book rail tickets and reservations using interactive television. Pay-TV installations can already accept smartcards, and it is this facility which will allow booking and payment from private homes. The ticket, reservation and payment details will be downloaded on to the smartcard, which can then be passed through a reader at a station or other location convenient for the customer for a ticket to be printed out.
This is part of the vision outlined by Alan Meekings, Vice President of Gemini Consulting, during a presentation of Virgin Trains’ electronic and telephone sales strategy on August 11. The strategy is driven by the need to achieve a massive increase in revenue to meet its franchise commitments, and Virgin has teamed up with IT specialists Cap Gemini to exploit the latest technology to lift ticket sales.
The TrainLine telesales service was launched on August 10 last year, with internet bookings added in February (RG 4.99 p211). Internet sales reached over £1m in six months, and there are now 120000 registered users. Virgin Trains opened its first call centre in Edinburgh in 1997, and a second at Dingwall, just north of Inverness, was added last year. Now the combined services of The TrainLine are taking bookings worth £7m a week.
A particularly telling statistic is that 56% of customers say that if they had not been able to book through The TrainLine, they would not have travelled by train. This has lent much encouragement to Cap Gemini, which needs to grow revenue at the Dingwall call centre by a factor of seven to meet the target agreed with Virgin for the end of its 6 1/2 year contract in 2004.
Dingwall employs 172 full-time and 42 part-time staff. An agent takes 70 calls a day, of which about half convert into sales on the first call. Compare this with station retailing; if anyone takes the trouble to visit a station for an advance booking, conversion is much higher. Meekings says the aim is ’not to lose the sale if space is available on the train’.
Staff are trained to spot quickly if callers are truly price sensitive and to identify other factors important to the customer that could influence the sale. In this way, call centres ’are the eyes and ears of the business’.
All this is part of a three-year development strategy which Virgin and Cap Gemini have formulated (Fig 1). This is based on the need to ’get people back into the train travelling habit before Virgin’s new trains arrive.’ Yield management techniques will be essential to meet the revenue targets, but ’you need to have at least half the bookings in advance for yield management to work well.’ Although having all seats reserved would be ideal for yield management purposes, current policy is to retain the walk-on facility.
The TrainLine is steadily extending its range of services. These are fully impartial between operators, and the service can handle bookings for any operator meeting the required specification. Around 13% of revenue is currently from other operators. Eurostar bookings are a recent addition, and Eurotunnel car bookings are not far away. Meekings had discussions with Connex in August with a view to handling inter-city and other time-consuming bookings that at present occupy ticket windows where the prime demand is for local destinations. Taxi bookings are already possible, and in the long term Meekings wants to be able to offer a seamless service that could include hotel bookings so that rail travel becomes more accessible - ’unless you knit it together for people, it’s too big a problem’.
Meekings wants to encourage people ’to come to us for journey planning’ rather than use the National Rail Enquiry Service, which cannot tell people what quotas are available for particular fares.
In terms of technology the next step is likely to be e-ticketing at stations, with a roll-out pencilled in for November this year or January 2000. Beyond that lies IN/CTI/IVR. Intelligent Network means that calls are automatically routed to agents who are best suited to the particular request, for example group bookings, which have been possible since July 25. Computer Telephony Integration and Interactive Voice Response allow regular customers to be recognised, with the possibility of automating ticket conditions for frequent travellers.
Progress has already been made towards building up customer profiles, but further work on this has been postponed for the moment.
As Virgin and Cap Gemini gain experience, they will be able to develop ’intelligent quotas’ to maximise revenue.
A steering group meets regularly to discuss development, and among items on the agenda at the moment is the booking horizon. Air travel can sometimes be booked up to 12 months in advance, but holidaymakers who must book accommodation in peak periods several months ahead cannot at present reserve their rail travel until two or three months before the departure date. The only fair way to handle early requests is in strict rotation, and Meekings moots the possibility of e-mailing customers overnight as soon as booking windows open.
Other avenues for growth are constantly being explored. Dingwall has a ’Discovery Team’ of seven agents whose task is to identify customers’ needs more closely. Call duration is sometimes used as a measure of a call centre’s success, but the conversion rate into sales and the revenue volume are more significant. Meekings points out that a sales agent may spend 5min on the phone to a customer, which is likely to be much more than the customer spends talking to Virgin staff on the journey.
Cap Gemini has already studied teleworking as a means of achieving further cost reductions, opening up employment opportunities for individuals such as students or those who are disabled and need to work from home.
CAPTION: ’Charm can influence sales’, says Alan Meekings, Vice President of Gemini Consulting, demonstrating The TrainLine service at Virgin Trains’ Dingwall call centre
CAPTION: Fig 1. Virgin Trains’ three-year electronic sales strategy. Shaded segments in the circles indicate that the objective has been fully or partly achieved; no circle means a long-term aim or aspiration