Customer Personalisation and Service Efficiency: the Pillars of the New Renfe Business Policy

25 número 6 - junio - 2018. Pág 455 - 461 Customer personalisation and service efficiency: the pillars of the new Renfe business policy Cañamero Palacios, Francisco Renfe Operadora1 Abstract Financially-wise, high-speed transportation has been currently consolidated as the most profitable of all the services which integrate the railway sector at a global level, specially in Spain where this type of service is experiencing relevant growth in accordance with the infrastructure investments that have taken place in the last decade. Back in 2011, Renfe’s high-speed commercial services (flagship company of the Spanish railway sector) transported little over twenty million passengers; nowadays -barely seven years later- that number surpasses the thirty-five million mark. In order to consolidate our actual position in the passenger transport market and as regards the imminent liberalization of this sector at an European level, Renfe has decided to direct its different commercial strategies to its clients and their necessities, making the passengers the focus of its business vision and the essential reference framework for all the activity areas of the company, developing its trade policy from a service segmentation strategy towards the customization and using new technologies and the profound knowledge of the client CRM provides as tools. 1 Cañamero Palacios, Francisco. Marketing director of Renfe Viajeros. International Congress on High-speed Rail: Technologies and Long Term Impacts - Ciudad Real (Spain) - 25th anniversary Madrid-Sevilla corridor 455 Cañamero Palacios, Francisco The deregulation of the railway industry on a continental scale, the regionalisation processes at a national level affecting the competitive framework and services funding, and the opening of the international passenger transport are some of the main challenges that the railway companies are set to face in the upcoming future. In the context of a very near scenario of strong competition, added to the existing intermodal competition, Renfe has understood it should strengthen its market position and align its structure and strategy to such a complex future scenario, where it will have to abandon its position as the sole player in the passenger rail transport business and compete with other future operators. In order to consolidate its current position in the passenger transport industry, Renfe, among many other measures, has decided to implement strategies focused towards the customers and their needs, placing the customer at the heart of the business vision and seeking the more and more necessary “Customer personalisation”, and as the essential reference framework in every business area of the company. Thus, for example, Renfe has strongly encouraged innovation and interaction with customers, leveraging all the potential offered by new technologies at the service of business and smart CRM management, improving the communication in different channels, such as the website, messaging, email or mobile phones for the purpose of creating a permanent real-time relationship with the customer. Always connected. Beginning with simplifying the barriers in the purchase process to the extent possible, making the process to get a train ticket easier and more convenient and aiming towards a zero use of paper. With the aforesaid objective of putting the customer at the heart of the business and placing Renfe at the forefront of progress in order to compete in a deregulated market, the company developed an ambitious Business Plan with the purpose of fostering high-speed rail versus air transport and consolidating its overriding position upon the arrival of future competitors for domestic traffic in mainland Spain, as other bigger, more profitable and more efficient European groups. Before launching this Business Plan, a large study had of course been carried out in order to identify which were our weaknesses and which commercial aspects of our services and products could be improved. The study found out that: • AVE offered high prices and rather inflexible fares. Customer perception. • The occupation level was not enough, it was low, subject to seasonal fluctuations, and there was a low investment optimization. • Little attraction of new clients, especially among the youngest population. • Medium- and long term impact of collaborative commerce on transport. • Based on this analysis, we fixed the following objectives: • Establishing more affordable rates for everyone; prices for all segments of society. • Increasing the occupation level of the trains. • Modernising and adapting the supply to demand. • Attracting more passengers and boosting a great loyalty programme. • Becoming more efficient in customer management. • Creating a portfolio with services complementary to railway (cars, hotels, etc.) • Creating a great intermodality model with other forms of transports with AVE as the central axis. 456 360.revista de alta velocidad Customer personalisation and service efficiency: the pillars of the new Renfe business policy Thus, with these findings in mind, from the 8th of February 2013, Renfe started to implement a new strategy based on actions aimed at increasing the flexibility of the offer by introducing a dynamic price system, so that the nature of the ticket price would become mobile. This, by the way, was a widespread form of work in other modes, but it had never been implemented in Spanish railway. The most relevant measures regarding prices adopted at that time were: Û AVE General Rate -11% Û AVE/LD Return Ticket -20% Û AVE AVE Pass -35% Û AVE/LD Promo Rate up to -70% Û AVE/LD Youth Card -30% Û AVE/LD More frequency and new routes And from the date of implementation of this new business policy including, as it can be seen, great discounts on the most common rates, the railway use started to increase. This increase led rail transport to outperform air transport in 2014 for the first time ever, becoming, according to INE (Spanish National Institute of Statistics), Spaniards favourite means of transport and reaching 50,000 more passengers than airplane for trips within Spain. Beyond this, today, 4 years after the beginning of this groundbreaking business policy, Renfe can boast it has attracted 9 million new customers, which means a 40% boost in the number of passengers and a 10% occupation increase. A significant detail is the fact that the occupation increases achieved over these years have taken place in every AVE corridor. This means that the beneficial effects of this new business policy have reached all the lines and not only the most used ones (such as Madrid - Barcelona or Madrid - Seville), as it might have been expected. These excellent results have taken Renfe to deepen into this line of work and extend and expand this business strategy, delving deeper into the customer loyalty concept too. Major business milestones: ▪ 1993.- Quality commitments with the Customer ▪ 1994.- Punctuality commitment: “5 minutes late” ▪ 1999.- Outsourcing to the private sector of a 50% of train maintenance ▪ 2005.- Complete independence of Railway Infrastructure Administration (“Adif”) ▪ 2006.- Prices with less and less intervention International Congress on High-speed Rail: Technologies and Long Term Impacts - Ciudad Real (Spain) - 25th anniversary Madrid-Sevilla corridor 457 Cañamero Palacios, Francisco ▪ 2007.- Prices discriminated by product ▪ 2007.- Web and Star rates introduction ▪ 2008.- New Rate Policy ▪ 2010.- “Revenue Management” Dynamic Rates ▪ 2012/3.-New Business Policy ▪ 2014.- New Company “Renfe Viajeros, S.A.” The company’s corporate purpose is the provision of traveller transport services by train, both national and internationally, the mediation in the provision of any tourist service, the organisation, offer and/or selling of combined journeys or tourist products, as well as the provision of other services or complementary activities linked to train transport. Within the framework of the new Renfe business strategy complying with the planned targets, an innovative Marketing Plan was launched following steps: • Segmentation and characterisation of the CRM market • Product portfolio review and new commercial offer design • Promotion of value-added products (Train +) • Access to new sales and marketing channels • Designing and developing a new commercial communication line • Introducing connectivity on board and a new entertainment platform • New customer policy for Renfe Empresas (1,500 associated companies) All these actions had an essential objective for the company: increasing the number of loyal customers. All of this aiming at having not only more committed passengers, but also more satisfied travellers. Thus, after a boost of 45% in the number of passengers in just 3 years thanks to the low-price policy and more services, the company took up a new challenge: getting to know better the customer to keep growing and be profitable. To this effect, Renfe relaunched its loyalty programme, opening it to all distances (commuter rail and medium distance) and introducing a series of further benefits for train users in order to avoid customer churn in favour of other modes. Boosted in June 2015 with the launch of +Renfe, the loyalty programme has grown almost 78% from that moment up to the current 1.2 million members, generating customer knowledge, which helps to understand consumer habits and preferences. The +Renfe programme seeks to obtain more customer knowledge, revert the benefit of the programme in the very business model, create induced demand through point

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