HOW TO SECURE
The world of transportation is on the cusp of change on a scale that has never been seen within our lifetimes. Granted it may just be starting and will take a few years before it noticeably impacts on us all, but by the time the average person does notice it will have changed forever.
How we use transportation, the modes we use, when and why, frequency, the pay- mentmodels, the companies and suppliers involved, the types of vehicles and even how they are navigated around our streets (no more drivers!) are all on the table for disruptive change.
Autonomous taxis, or robo-taxis, are on the way. We can’t really say for sure when they’ll be here or what they will definitely look like, but we can reflect and consider what a future with them may involve.
We can consider how transportation may evolve in the next three, five, 15 years; how our place within that may shift and what changes we may look to introduce to our models to ensure we evolve and maintain relevance in this new transportation model of the future.
As a part of this exercisewe should consid- er what our inherent value is, and how we can maintain that and carry it into the future.
In my view the greatest inherent values in a taxi company are:
• Its customer base
• It is a local business, often family run (as opposed to a faceless international con- glomerate)
• Experience - in managing transportation and customers in its area
• Its infrastructure including offices, yards, garages/workshops
I believe each of the above offers opportu- nities to anchor a position in the transportation model of the future. In this article I’m going to focus on just one ele- ment and the one that I feel is most valuable, the customer base.
In a recent analysis of the data built up with one taxi company over two years we saw that 70 per cent of the value was com- ing from just 30 per cent of the customer
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are also engaging with customers to build levels of engagement and advocacy through different kinds of loyalty pro- grammes that help ensure they become the place their customers go to first for their product or service.
Think airlines, supermarkets, coffee chains, mobile phone networks, clothing chains, fast food chains, restaurants, make up and movie clubs.
base. We also saw breakdowns within that of who the most loyal were, the regular users, those who were new, those who might be deemed “at risk” as customers etc. All really fascinating stuff, and that data can be used to work on and engage with those segments to make a business more solid and profitable.
The new tool we’re working on, iCabbi Insights, will allow taxi companies to easily see this information while enabling them to roll out programmes that will reward or encourage these passengers accordingly and build a stronger, more committed cus- tomer base (watch this space!).
While on a long flight back in October 2016 I penned an article about the future of trans- portation (which made it on to LinkedIn almost a year later) that touched on the importance of a taxi company’s model, its customer base and loyalty, and today my opinions on the same remain unwavered.
From a customer perspective the services provided by a taxi are transient, often with little in the way of loyalty to any particular provider. And why would there be when to the average customer it’s viewed as a com- modity, where one taxi is the same as another, one taxi company is the same as another and where availability and price are the biggest influencers on which provider we use? I acknowledge that qual- ity of service, car, drivers etc play a part in some cases but to date branding hasn’t really figured in a meaningful way in our industry and taxi companies generally don’t know who their customers are and where the real value is.
I’ve looked at other industries where prod- ucts or services may be viewed as a commodity, and noticed how in addition to building a strong value proposition and brand based on level of service (quality, reliability, relationship, support, trust) they
What I’ve concluded is that right across the board consumer facing industries are growing and retaining their customer base through comprehensive loyalty pro- grammes that not only offer customers direct benefits, butmake themfeel special, valued and proud to spend their money with a particular brand.
How that loyalty programme is construct- ed, managed and what is involved in it would seem to determine the level of suc- cess. But a number of key elements are consistent across all industries:
• Increased levels of service are welcome - customers want an easier life, to have their problems solved with minimum or no hassle and they want their pain points soothed.
• Experiences are remembered long after they’ve forgotten a discount.
• Customers like consistency; it creates confidence, which in turn drives loyalty.
• Customers can become loyal to an air- line, hotel, supermarket etc because of points more than anything else; they become fixated on earning points, even if it means paying more for tickets. They drive sales and create repeat customers.
• Simplicity and clarity in a loyalty pro- gramme are important. The customer needs to be able to understand it quickly and easily.
• Exclusivity Pays - Customers want to feel exclusive and important, as evi- denced through the prestige associated with moving higher up airline loyalty programme tiers and also in other indus- tries as seen with the Starbucks Gold level. A high tier is a symbol of status and importance, an exclusive feeling and a strong motivator where the highest tier should be reserved exclusively for your very best customers. It’s not exclu- sive if everybody has it!
AUGUST 2018
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