East Coast’s 3 ingredients for a successful RM strategy

At last year’s Rail Revenue & Customer Management Congress, Suzanne Donnelly from East Coast Mainline gave a talk identifying her 3 top ingredients for rail revenue management to be successful – systems, people and processes. Here’s how they made their strategy work:

1. Systems – RM tools offer the ability to
–Optimise inventory to maximise your revenue
–Manage demand and create the space for new volume
•East Coast has the highest average train utilisation rate of all UK rail operators with 235 passenger km per train(1)
•Sales of „Advance „ fares have increased 64% in 3 years
–Forecast passenger numbers by train, route, date, class, quota
•Forecast accuracy rate improved by 17% with move to RPM in 2009 (2)
–Improve internal communications and efficiencies
–Automate high volume of actions
–React quickly to changes in the marketplace or external events
–Adjust to accommodate new products, timetables etc
–Effectively manage crowding by spreading demand
–Gain competitive advantage
•EC carries 61% of the Newcastle<>London air/rail market compared to 45% in 2005
•EC carries 22% of the Edinburgh<>London air/rail market compared to 12% in 2005

2. People – people are the key asset of an RM team!

-Understand the balance of the team and how to best utilise the skill set

-Be clear on the ‘ideal’ attributes of your team

-Set the context and focus for personal development reviews and plans

-Determination and commercial thinking are just as important as systems!

-And perhaps most importantly, recognition:

–Real impact on the bottom line
–Salary levels typically low for revenue management analysts
–Reward and recognise individual and team contributions
•The launch of cutting edge revenue management technology “RPM” won in the Rail Innovation Awards –June 2010
•Highly commended in the National Rail Awards –Feb 2010
–Provide opportunity to build skills through additional responsibilities
–Consider the merit of an incentive scheme

3. Processes.

Think about….
•Impact on day to day actions
•What KPI‟s you will need
•Ways to improve inputs to the system
•How to manage what the system cannot
•Impact on cross functional processes such as promotional planning
•Where to concentrate your efforts
•How to manage the team
•Best ways to monitor and manage competitor threat

Feeling a bit overloaded with ideas? You can download Suzanne’s full presentation for free here, which gives additional context and suggestions to help your revenue management strategy succeed. You might also be interested in this article from Sqills, detailing 7 reasons for rail operators to implement revenue management.