Transportation-as-a-Service is the Road to Customer Experience!

By Jayne Scuncio May 18, 2018

This story was originally published at Forbes.fr titled, “Mobility: Road to Commitment and Customer Experience!” written by Philippe Van Hove, Zuora VP Southern Europe.

The term “uberization”, now overused, covers a reality that is still prevalent in the transport industry: the imperative need to create an engaging relationship with the customer. The speed of service is not enough: the consumer now demands flexibility and customization.

Traditional players are therefore caught between users who question historical consumption practices and startups who have placed these users at the heart of their growth strategy. To persevere and grow in a hyper-competitive environment, companies in the sector must enrich their customer experience.

The journey beyond transport

The rise of digital has moved the lines of the transport industry. The freedom to move quickly from point A to point B is no longer a privilege, but an achievement. Mobility actors are therefore strongly encouraged to differentiate themselves on the quality of service. The SNCF is a good example: yesterday in a situation of monopoly, the company had to rethink its offers in depth to take into account the restriction of the purchasing power and the evolution of uses. Travel is now thought of as a value chain that goes beyond the journey: dematerialization of tickets, loyalty, facilitation of arrival with suggestion of hotels … The group also adopts an approach of innovation continues to meet very strong expectations. The TGV Max offer has thus proven SNCF’s ability to reinvent itself to seduce a young audience that had neglected it. Unlimited subscription travel satisfies both the quest for smart shopping and a certain desire for freedom. The model has attracted more than 100,000 new customers and reaches its goal of the month … the first day of its commercialization.

Beyond “transport”, which has a purely utilitarian dimension, it is a question of offering users a trip. The journey begins when the transport is no longer a waste of dry time, but becomes time for oneself. Lyria, for example, highlights the dreamlike dimension of travel. RATP promotes the pass navigo, arguing that the train offers a valuable reading time. More and more, these actors are banking on enhanced comfort, a friendly atmosphere, and an extended range of services. In a Bergsonian perspective, it is a question of privileging duration (subjective, invested by our intuition and emotion) with time (mechanical and objective).

Business models in perpetual evolution

The company’s mission is to re-enchant the service it offers its customers. “In a world saturated with products of all kinds, a customer is enthusiastic about a product only if he finds a magical dimension (…) Amazon is magic because you can buy in one click, and all products in the world are at your fingertips. As Michael Ballé and Godefroy Beauvallet say in lean management.

To develop products or services with a high potential for magic, you have to understand their value from the customer’s point of view and constantly rethink your organization. Blablacar understands this, embarking on insurance services and preparing to open transmission lines. SNCF too, which has adopted a start-up mode, more agile and focused on the needs of customers. For many actors, the change requires a platform of their activity. The idea is to aggregate a multitude of services to monetize a wide range of uses as Tien Tzuo explains in his book ” Subscribed: Why the Subscription Model Will Be Your Company’s Future – and What to Do About It?. The data collected over time makes it possible to better know the customer and to establish a virtuous circle of continuous improvement and individualization of the service. This is the bias of City Mapper, for example, which focuses more on the journey of the user than on the means of transport. The application, in fact, proposes the most direct routes between a point A and a point B, that they mobilize the metro, the bus, the tram, or even a VTC and in real time according to the state of the traffic.

This evolution commits companies to reconsider their ecosystem of partners and to consider co- innovation as a necessity. Sign of the times: in recent years, the SNCF opens its API to developers and multiplies collaborations with big data startups.

Transport and economy of experience

Ultimately , to engage the customer, companies must offer them “singular, memorable and economically valued experiences,” as Joseph Pine & James Gilmore pointed out in their research for Harvard Business Review in 1998.

In the beginning was the product; then came the service. At present, it is possible to develop solutions that personalize this service to the maximum: in the mobility sector, it is the desired vehicle that arrives at the right time. Tomorrow, based on usage data, it will be possible to prevent travelers’ expectations, if not already the case today.

The economic paradigm has changed profoundly: there is no longer so much a question of ownership as of experience. It is through experience that we retain and engage the customer. Automakers know that the future of their industry is less about selling vehicles than about monetizing connected services, which the consumer consumes as he pleases, when he sees fit. Insurance “à la carte”, yesterday aberrations, will become widespread. In this logic, mobility à la carte will also prevail, and the subscription become the preferred economic model. From transport to travel, from possession to experience, the various actors must redefine their growth strategy to be always in phase with contemporary uses.