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Heathrow Express
MBA Consultancy Project
Rachael O’Bryan
Ashridge Business School
http://uk.linkedin.com/rachaelmobryan
Agenda
Background/Context
Approach (i.e. methodology)
Findings
Recommendations
Next steps
Background/Context
Rachael O’Bryan, 26
M.B.A., Ashridge
Business School
B.A. in Communications
& Marketing from
California State
University Northridge
Originally from Kentucky,
U.S.A.
Background/Context
MBA Consultancy project
Chosen from 4 concepts, this one selected for
relevance and potential business benefit.
Commenced April, with most of work happening in
June-August
Future strategic options for Heathrow Express,
mainly in relation to their service proposition.
Background/Context
The primary analysis (interviews, surveys) focused
around 3 main questions:
–From the perspective of Heathrow Express
passengers and staff, what is attractive about
Heathrow Express? What could be considered as
a weakness?
–From the perspective of Heathrow Express staff, is
a partnership with an onward travel company
beneficial? (or of strategic importance)
–From the perspective of Heathrow Express
passengers and staff, what should be pursued in
the long term for Heathrow Express? What should
be made of mention?
Approach (Overview)
Ashridge guidance
Literature Review/Case Study search
Surveys
Interviews (HEx employees)
Meeting with Uber
Qualitative and Quantatative analysis
Approach (Surveys)
Questionnaire development
– Selection of 8 main questions
– Paper format
– Given out on HEx trains
– 2 different surveys (PADLHR and LHRPAD)
Collection
– 5 days
– 266 respondents
– Personally given out on trains by myself
Final Step
– Qualtrics software used to collate data and analysis
Approach (Interviews)
Interview development
– Researched self practice
– Derived 9 key questions
– Interviewees identified by role relevance and recommendation
Interview implementation
– Potential interviewees approached by e-mail
– 11 of 12 respondents, and all 11 interviews were conducted
– Face-to-face recorded
– Length of 12-28 minutes of each interview
Final Step
– Interviews transcribed and analysed thematically, and produced
in summary for the report
Findings-Survey
Potential obvious findings (full detail in report)
–Why take HEx?
–Why other transport options weren’t chosen and HEx
was
–Demographics (business/leisure travelers, nationalities,
age range, and group size)
Findings-Survey
Findings-Survey
Locations
Passengers were also asked geographically where they
were coming from to get to Paddington or where they
will end their destination after arriving into Paddington.
Central London was the most popular area. 84-85% of
those passengers who came from or going to, happen
to be inside of the London M25 motorway.
The other 15-16% were in distributed locations which
included Newcastle, Durham, Leeds, Liverpool,
Nottingham, Cardiff, Cambridge, Oxford, Chelmsford,
Exeter, Plymouth, Dover, and Brighton.
Findings-Survey
Findings-Survey
Final thoughts from passengers
- 50% responded
- 33% of those gave entirely positive feedback
- 32% had an issue, and it was around the cost of the ticket.
- 15% represented new ideas (see next slide)
- 11% recommending more frequency and space on the trains
(peak periods & weekends).
- 9% was other (wi-fi, toilets, long walk)
Findings-Survey
Recommendations from HEx passengers
15% represented new ideas for the company, some including ideas in relation to price.
Add travel card (underground) on
HEx ticket machines.
Have the oyster gold card
discounts on board as well
Make oyster cards work
Do cheaper advanced fares Family discounts would
encourage more users.
Offer discounts
I want to purchase corporate
tickets on my smartphone app.
More destinations than just
Paddington
To have another train line from
Victoria
Offer drinks on board Free drinks No penalty on train tickets, don’t
have them expire.
Sell tickets on the train without
any penalty.
Airport staff tickets available on
self-help ticket machines
Round trip ticket purchased but
expired return after so must pay.
Please stop having them expire.
Suggest putting screens with train
times at arrivals exit (only
available at main ticket desk). I
seem to be missing the train a lot
lately, and always have to wait 13-
14 min
Suggest a no log in for the Wi-Fi,
and no TV screens to make the
tickets a bit cheaper.
Where are the rubbish bins?
Have more luggage space, and
faster Wi-Fi service.
To have reserved seats in coach as
well as in first class
Better air conditioning
Findings-Interviews
Onward travel
 We could do a deal with Europcar, just like Virgin trains do currently
 A deal with the underground joining up with an oyster card or having your own smart card.
 Look at deals with Regis for using their office space in London.
 Look at the VIP area at Heathrow and start integrating stuff there.
 Possibly some sort of personalized, chauffer service.
 Look into having contactless cards
 Continue to focus on working with more airlines, who our parent company Heathrow know very
well, in order to get them to be advocating more strongly the use of our service.
Findings-Interviews
Uber
Hex Interviewee Responses
Benefits & Risks + worth pursuing further
“I am still nervous, considering the controversies & policies Uber sometimes
apply, so this has to be considered.”
“Uber is a brilliant company but secretive in the way they do business. The
only negative to a partnership with Uber is the potential of the press.”
“HEx prides themselves on the service, reliability, consistency; things that
Uber hasn't always shown because there’s less standardization, so that's the
biggest alarm bell for me.”
“My personal experience is mixed. Uber drivers have cancelled on me,
driven frantically, made me find them, etc.”
“Cheaper than a taxi, easy to book. I just don't know enough about Uber to
say if they'd be a good fit for HEx.”
Findings-Interviews
Uber meeting outcomes
‘One size fits all’ for Uber
Logistics at Paddington
seen as tricky- Uber willing
to work on that
Uber would prefer to drop
at Paddington, rather than
Heathrow
Uber integration into HEx
application via API is
possible
Joint promotion
opportunities
Findings-Interviews
Long term pursuits + other themes
 We need to be more responsive in terms of price, and need loyalty programmes beside 12 journeys
for the price of 10 that we offer now at HEx.
 HEx needs to dial up in terms of communication. What are the reasons to make HEx worth your
while?
 We have to make sure people really understand and use the product. Once they try it, it’s quite easy,
and also easier for them to repeat the experience.
 We need to focus our strategies on individual areas.
 HEx should look at price for offline and online ticket sales.
 Be more transparent with our strategies and goals. If there are any issues, put it out to the entire team
to come up with solutions. We also need to be more aggressive in how we market our brand.
 Showing that extra value for the price of the ticket, which can be perceived as expensive.
Findings-Interviews
Pricing
“Our service is geared more towards business travelers that aren't as price sensitive. Big
potential for growth in leisure market but we go up against fierce competition such as
black cabs and the underground which are iconic to London, and people want to ride on
them during their holiday here. Also, a crazy year with the engineering works where our
service may not be seen as reliable. “
“The price. I've been here just 1 year and prices have gone up since I've been here. It
hasn't gone up significantly, but the trend is that it’s going up. This has a negative impact
on passengers.”
However, one interviewee contradicted the view point of price as an issue.
“I don't think price is a weakness. It's around value for money and price isn't the same
thing. So it’s about showing that extra value for the price that can be perceived as
expensive.”
Conclusions
Despite recent pricing initiatives (kids go free, group save, etc.) a large
proportion of customers & employees expressed concerns about HEx pricing
Importance of onward travel confirmed by this research (many different
ideas)
Prominence of Uber in market & high level of awareness confirmed by this
research
Recommendations
Onward travel partners (Taxi)
–Work with Uber to explore further options (NDA to still be agreed)
–Confide in other potential partners (Addison Lee/Halio) and open dialogue
Public Transport sector partners
–TFL (oyster card)
–ATOC (National Rail)
Pricing & Promotions
Culture and Employee Engagement
Next Steps-Further Research
Focus Groups (non-users)
More survey respondents
Compare to quarterly report questionnaire coming out
Further access to Uber
Leave you with this quote...
– “We’ve been a bit nervous about trying things because for fear we’ll fail. We’ve been very
slow when we’ve wanted to have a fully perfect solution and I think we just need to get stuff
done. Trial it. Learn. Find what works, find what didn’t. Tweak and move on. So I think for
onward travel I’d like to see something with the topper end of the market in terms of similar
to a chauffeur business. That’s a product that we could then talk about with our airline
colleagues and it’s also something as I say, that clearly some airlines have already got on
their mind anyway.”
Thank you!
Approach
11 Heathrow Express staff members were interviewed. The questions asked were:
– What is your role at HEx?
– Why do you think passengers choose HEx?
– Why do you believe passenger growth has slowed at HEx?
– What do you believe the company’s strengths & weaknesses are?
– What degree is onward travel an issue at HEx? What steps if any have been taken,
and what still needs to be done?
– According to Nat’l Rail, value for money is a weakness at HEx. What can they do to
address this perception?
– Do you see an opportunity to work with other org. in terms of onward travel?
– What is your personal experience and perspective on a company like Uber?
Findings
Findings
Findings
Demographics
- 59% represented business, 41% represented leisure.
- 80% of Heathrow Express passengers are in the age range of 25-54, with 35-44
making up the biggest sector.
- A majority of the Heathrow Express passengers are male, representing 64%.
- The UK, rest of Europe, and Americas make up the top nationalities,
representing 89%.
- In terms of how many people Heathrow Express passengers travel with, 49%
travel alone with 33% travelling with 1 other person.
- 93% of passengers aren’t travelling with children under the age of 16.
Phase 1: Research
First, a literature review, looking into demand, strategy, service
quality, and marketing of transportation companies occurred.
Key findings were:
– Demand for public transport is high, with it continuing to grow in
Europe and North America.
– Cost (including fares and time) is one of the main determinants of
public transport demand. Riders are more sensitive to changes in
travel time than to changes in fares; unlike price and other
factors, time is an absolute constraint.
– Service is at least as important as fare, if not more so. Fare
increases can be compensated for by equivalent service
improvements without affecting patronage. For those travelers
using high frequency urban public transport, the negative impact
is expected to be less, even though journeys on some urban
networks can involve a high number of interchanges.
Phase 1: Research
Key Findings (service convenience & disruptive innovators)
– Convenience is vital in helping to ensure long term viability of
public transport, through increases in demand, revenue,
public support, and acceptability. The aim of the public
transport provider should be to ‘minimize the gap’ between
service quality sought, targeted, delivered, and perceived.
– There is a clear, strong synergy between marketing and public
transport improvements. Some of the key value components
that marketing in public transport must address include
convenience, comfort, affordability, extensive mobility for
transit-dependent riders, and a sense of making the “smart”
choice.
– Good marketing starts with the customer, differentiates itself,
takes into account the competition, promises, communicates,
and delivers. Good promotion and marketing of a package of
service improvements is at least as important as the
improvements themselves.
Phase 1: Research
Key Findings (marketing in public transport)
– There is a clear, strong synergy between marketing and
public transport improvements. Some of the key value
components that marketing in public transport must
address include convenience, comfort, affordability,
extensive mobility for transit-dependent riders, and a
sense of making the “smart” choice.
– Good marketing starts with the customer, differentiates
itself, takes into account the competition, promises,
communicates, and delivers. Good promotion and
marketing of a package of service improvements is at
least as important as the improvements themselves.

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Heathrow Express presentation to Board

  • 1. Heathrow Express MBA Consultancy Project Rachael O’Bryan Ashridge Business School http://uk.linkedin.com/rachaelmobryan
  • 3. Background/Context Rachael O’Bryan, 26 M.B.A., Ashridge Business School B.A. in Communications & Marketing from California State University Northridge Originally from Kentucky, U.S.A.
  • 4. Background/Context MBA Consultancy project Chosen from 4 concepts, this one selected for relevance and potential business benefit. Commenced April, with most of work happening in June-August Future strategic options for Heathrow Express, mainly in relation to their service proposition.
  • 5. Background/Context The primary analysis (interviews, surveys) focused around 3 main questions: –From the perspective of Heathrow Express passengers and staff, what is attractive about Heathrow Express? What could be considered as a weakness? –From the perspective of Heathrow Express staff, is a partnership with an onward travel company beneficial? (or of strategic importance) –From the perspective of Heathrow Express passengers and staff, what should be pursued in the long term for Heathrow Express? What should be made of mention?
  • 6. Approach (Overview) Ashridge guidance Literature Review/Case Study search Surveys Interviews (HEx employees) Meeting with Uber Qualitative and Quantatative analysis
  • 7. Approach (Surveys) Questionnaire development – Selection of 8 main questions – Paper format – Given out on HEx trains – 2 different surveys (PADLHR and LHRPAD) Collection – 5 days – 266 respondents – Personally given out on trains by myself Final Step – Qualtrics software used to collate data and analysis
  • 8. Approach (Interviews) Interview development – Researched self practice – Derived 9 key questions – Interviewees identified by role relevance and recommendation Interview implementation – Potential interviewees approached by e-mail – 11 of 12 respondents, and all 11 interviews were conducted – Face-to-face recorded – Length of 12-28 minutes of each interview Final Step – Interviews transcribed and analysed thematically, and produced in summary for the report
  • 9. Findings-Survey Potential obvious findings (full detail in report) –Why take HEx? –Why other transport options weren’t chosen and HEx was –Demographics (business/leisure travelers, nationalities, age range, and group size)
  • 11. Findings-Survey Locations Passengers were also asked geographically where they were coming from to get to Paddington or where they will end their destination after arriving into Paddington. Central London was the most popular area. 84-85% of those passengers who came from or going to, happen to be inside of the London M25 motorway. The other 15-16% were in distributed locations which included Newcastle, Durham, Leeds, Liverpool, Nottingham, Cardiff, Cambridge, Oxford, Chelmsford, Exeter, Plymouth, Dover, and Brighton.
  • 13. Findings-Survey Final thoughts from passengers - 50% responded - 33% of those gave entirely positive feedback - 32% had an issue, and it was around the cost of the ticket. - 15% represented new ideas (see next slide) - 11% recommending more frequency and space on the trains (peak periods & weekends). - 9% was other (wi-fi, toilets, long walk)
  • 14. Findings-Survey Recommendations from HEx passengers 15% represented new ideas for the company, some including ideas in relation to price. Add travel card (underground) on HEx ticket machines. Have the oyster gold card discounts on board as well Make oyster cards work Do cheaper advanced fares Family discounts would encourage more users. Offer discounts I want to purchase corporate tickets on my smartphone app. More destinations than just Paddington To have another train line from Victoria Offer drinks on board Free drinks No penalty on train tickets, don’t have them expire. Sell tickets on the train without any penalty. Airport staff tickets available on self-help ticket machines Round trip ticket purchased but expired return after so must pay. Please stop having them expire. Suggest putting screens with train times at arrivals exit (only available at main ticket desk). I seem to be missing the train a lot lately, and always have to wait 13- 14 min Suggest a no log in for the Wi-Fi, and no TV screens to make the tickets a bit cheaper. Where are the rubbish bins? Have more luggage space, and faster Wi-Fi service. To have reserved seats in coach as well as in first class Better air conditioning
  • 15. Findings-Interviews Onward travel  We could do a deal with Europcar, just like Virgin trains do currently  A deal with the underground joining up with an oyster card or having your own smart card.  Look at deals with Regis for using their office space in London.  Look at the VIP area at Heathrow and start integrating stuff there.  Possibly some sort of personalized, chauffer service.  Look into having contactless cards  Continue to focus on working with more airlines, who our parent company Heathrow know very well, in order to get them to be advocating more strongly the use of our service.
  • 16. Findings-Interviews Uber Hex Interviewee Responses Benefits & Risks + worth pursuing further “I am still nervous, considering the controversies & policies Uber sometimes apply, so this has to be considered.” “Uber is a brilliant company but secretive in the way they do business. The only negative to a partnership with Uber is the potential of the press.” “HEx prides themselves on the service, reliability, consistency; things that Uber hasn't always shown because there’s less standardization, so that's the biggest alarm bell for me.” “My personal experience is mixed. Uber drivers have cancelled on me, driven frantically, made me find them, etc.” “Cheaper than a taxi, easy to book. I just don't know enough about Uber to say if they'd be a good fit for HEx.”
  • 17. Findings-Interviews Uber meeting outcomes ‘One size fits all’ for Uber Logistics at Paddington seen as tricky- Uber willing to work on that Uber would prefer to drop at Paddington, rather than Heathrow Uber integration into HEx application via API is possible Joint promotion opportunities
  • 18. Findings-Interviews Long term pursuits + other themes  We need to be more responsive in terms of price, and need loyalty programmes beside 12 journeys for the price of 10 that we offer now at HEx.  HEx needs to dial up in terms of communication. What are the reasons to make HEx worth your while?  We have to make sure people really understand and use the product. Once they try it, it’s quite easy, and also easier for them to repeat the experience.  We need to focus our strategies on individual areas.  HEx should look at price for offline and online ticket sales.  Be more transparent with our strategies and goals. If there are any issues, put it out to the entire team to come up with solutions. We also need to be more aggressive in how we market our brand.  Showing that extra value for the price of the ticket, which can be perceived as expensive.
  • 19. Findings-Interviews Pricing “Our service is geared more towards business travelers that aren't as price sensitive. Big potential for growth in leisure market but we go up against fierce competition such as black cabs and the underground which are iconic to London, and people want to ride on them during their holiday here. Also, a crazy year with the engineering works where our service may not be seen as reliable. “ “The price. I've been here just 1 year and prices have gone up since I've been here. It hasn't gone up significantly, but the trend is that it’s going up. This has a negative impact on passengers.” However, one interviewee contradicted the view point of price as an issue. “I don't think price is a weakness. It's around value for money and price isn't the same thing. So it’s about showing that extra value for the price that can be perceived as expensive.”
  • 20. Conclusions Despite recent pricing initiatives (kids go free, group save, etc.) a large proportion of customers & employees expressed concerns about HEx pricing Importance of onward travel confirmed by this research (many different ideas) Prominence of Uber in market & high level of awareness confirmed by this research
  • 21. Recommendations Onward travel partners (Taxi) –Work with Uber to explore further options (NDA to still be agreed) –Confide in other potential partners (Addison Lee/Halio) and open dialogue Public Transport sector partners –TFL (oyster card) –ATOC (National Rail) Pricing & Promotions Culture and Employee Engagement
  • 22. Next Steps-Further Research Focus Groups (non-users) More survey respondents Compare to quarterly report questionnaire coming out Further access to Uber Leave you with this quote... – “We’ve been a bit nervous about trying things because for fear we’ll fail. We’ve been very slow when we’ve wanted to have a fully perfect solution and I think we just need to get stuff done. Trial it. Learn. Find what works, find what didn’t. Tweak and move on. So I think for onward travel I’d like to see something with the topper end of the market in terms of similar to a chauffeur business. That’s a product that we could then talk about with our airline colleagues and it’s also something as I say, that clearly some airlines have already got on their mind anyway.”
  • 24. Approach 11 Heathrow Express staff members were interviewed. The questions asked were: – What is your role at HEx? – Why do you think passengers choose HEx? – Why do you believe passenger growth has slowed at HEx? – What do you believe the company’s strengths & weaknesses are? – What degree is onward travel an issue at HEx? What steps if any have been taken, and what still needs to be done? – According to Nat’l Rail, value for money is a weakness at HEx. What can they do to address this perception? – Do you see an opportunity to work with other org. in terms of onward travel? – What is your personal experience and perspective on a company like Uber?
  • 27. Findings Demographics - 59% represented business, 41% represented leisure. - 80% of Heathrow Express passengers are in the age range of 25-54, with 35-44 making up the biggest sector. - A majority of the Heathrow Express passengers are male, representing 64%. - The UK, rest of Europe, and Americas make up the top nationalities, representing 89%. - In terms of how many people Heathrow Express passengers travel with, 49% travel alone with 33% travelling with 1 other person. - 93% of passengers aren’t travelling with children under the age of 16.
  • 28. Phase 1: Research First, a literature review, looking into demand, strategy, service quality, and marketing of transportation companies occurred. Key findings were: – Demand for public transport is high, with it continuing to grow in Europe and North America. – Cost (including fares and time) is one of the main determinants of public transport demand. Riders are more sensitive to changes in travel time than to changes in fares; unlike price and other factors, time is an absolute constraint. – Service is at least as important as fare, if not more so. Fare increases can be compensated for by equivalent service improvements without affecting patronage. For those travelers using high frequency urban public transport, the negative impact is expected to be less, even though journeys on some urban networks can involve a high number of interchanges.
  • 29. Phase 1: Research Key Findings (service convenience & disruptive innovators) – Convenience is vital in helping to ensure long term viability of public transport, through increases in demand, revenue, public support, and acceptability. The aim of the public transport provider should be to ‘minimize the gap’ between service quality sought, targeted, delivered, and perceived. – There is a clear, strong synergy between marketing and public transport improvements. Some of the key value components that marketing in public transport must address include convenience, comfort, affordability, extensive mobility for transit-dependent riders, and a sense of making the “smart” choice. – Good marketing starts with the customer, differentiates itself, takes into account the competition, promises, communicates, and delivers. Good promotion and marketing of a package of service improvements is at least as important as the improvements themselves.
  • 30. Phase 1: Research Key Findings (marketing in public transport) – There is a clear, strong synergy between marketing and public transport improvements. Some of the key value components that marketing in public transport must address include convenience, comfort, affordability, extensive mobility for transit-dependent riders, and a sense of making the “smart” choice. – Good marketing starts with the customer, differentiates itself, takes into account the competition, promises, communicates, and delivers. Good promotion and marketing of a package of service improvements is at least as important as the improvements themselves.