The DSB Customer Journey

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The DSB Customer Journey

“

Whatever you do, do it well. Do it so well that when

people see you do it, they will want to come back and see

you do it again, and they will want to bring others and

show them how well you do what you do.”

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Executive Analysis Solution Implementation Impact

The DSB Journey – From A to Z with DSB

A three-year customer-driven strategy, delivering a unique customer experience from A to Z by leveraging real time

information, accelerating the travel experience and establishing a closer relationship with customers

Strong positive impact on two of three dimensions Strong positive impact on only one dimensions

Feasibility Customer km growth Customer focus Internationalize operations Loyalty Program Acquire Arriva Customer Journey Real time data Customer Research Collaborations Pricing strategy Lower prices

Strong positive impact on all three dimensions

"A healthy DSB" has established a promising foundation for growth: •  Long heritage, producing the first

railway in Denmark

•  A large and stable home market that has not yet been fully captured •  Future large investments in

renovation of Danish public infrastructure

•  DSB as the most punctual European train operator

How can DSB increase the amount of

passenger kilometres by 7,5% from 2015-2017

while maintaining their profit margin?

Complication

Situation

So the question is:

Tactic evaluation

Question

Answer

Information

Informing customers by leveraging on real time data will ensure transparency, reduced uncertainty and change the perceived performance of DSB

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2.

3. Acceleration

Accelerating the customer experience by introducing "+Time for all", mitigating future issues regarding disruptions and increasing the customer journey at stations and within trains

Relation

By creating an online 'DSB Society' DSB is able to establish a closer relationship with its customers and further encourage their loyalty by implementing a rewarding loyalty program

By evaluating several tactics based on customer focus, customer km growth

and feasibility we found that DSB should develop … The DSB Journey – A holistic three -step strategy ensuring a unique journey from A to Z driven by information, acceleration of the customer experience and relation for future growth

However, DSB is facing a number of challenges:

•  Customer demands are increasing and perceived customer experience is declining •  Negative reputation is mainly due

to issues DSB cannot control •  Future implications such as delays

and rescheduling due to infrastructure upgrades

•  Easier substitution for other means of transportation

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... where the routes East-West and Greater Copenhagen generates most revenue and km

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2 The DSB Dilemma

DSB has managed to turn their business around, but their reputation and customers’ perceptions

are still negative – mainly due to things DSB cannot control

West

Greater Copenhagen East-west

Oresund

Revenue Travels Kilometres

13% 9,1% 16% 13% 13,8% 8%

38% 4,9% 38% 29,9 59% 28,9% 12,7% 12,8% 18% Area that drives revenue for DSB East

Area that drives kilometers for DSB

DSB is showing solid financial performance

across various financial parameters ... with the main five drivers for customer satisfaction and experience being:

… which has created negative consumer perceptions and a reputation score among Danish companies of only 49 ... but delays within F&R and S-trains, which are not

DSB's responsibility, impact consumer satisfaction DSB is actually highly punctual and operates

the most satisfying railway system in Europe

Executive Analysis Solution Implementation Impact

Reputation score (scale from 0-100)

Consumer satisfaction (scale from 1-10)

On Time Delayed 1 6 7 8 9 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 0 80 90 60 70 40 50 30

Satisfaction with the domestic railway system

Denmark Netherlands France UK EU Positive Negative 64% 64% 59% 55% 46% 21% 23% 22% 36% 34%

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Passenger revenues (in DKK m) Net profit margin

Passenger kilometers (in millions) 2011 4.469 4.972 2013 (6.3) 2013 2011 9.7 2011 2013 6,063 6,246 CAGR: 1.5% CAGR: 5.5% Reference: http://www.casecompetition.com/sites/default/files/cbs_case_competition_-_case_company_2015.pdf Reference: Product, Price & Service 15%c Traffic Information 21% Punctuality & Frequency 27% Safety, Stations & Cleaning 17%

17%: “Delays and waiting time” 3,6%: “Bad image” 5,6%: “Poor quality experience”

Customer perceptions of DSB 2010 90% 2012 94% 2011 2013 91% 97% 94% 95% 96% 97% 2010 2011 2012 2013 F&R S-Trains Punctuality of DSB 2010 0% 20% 40% 60% 80% 100%

Responsibility for delays, F&R Trains

2011 2012 2013 2014 DSB BaneDanmark External Factors

Comfort 20%

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Reference: Accenture, 2013

Reference: http://www.mckinsey.com/insights/marketing_sales/the_consumer_decision_journey

DSB needs to capture growth

DSB should mainly focus their efforts on the East-West fairs and S-trains, since they provide both exposure and increase

the amount of passenger kilometres, while simultaneously changing the customers perception of DSB's performance

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We see that the most profitable fairs are F&R

and S-trains, especially in terms of km ... and from a strategic perspective focus should be on the following major cities across country ... while keeping in mind that train customers value real-time information, comfort and loyalty rewards

There is a large gap between perception of DSB's

performance and their actual performance … while also hurting DSB's brand, which is a key factor when trying to develop loyal customers

Awareness Familiarity Consideration Purchase Loyalty

"Brands in the initial-consideration phase are up to three times more likely to be purchased eventually than brands that are not in it"

1 2 3 4 5

Key take-aways from analysis

... which affects DSB, since many purchase choices are affected by word-of-mouth and past experiences

Executive Analysis Solution Implementation Impact

29

108 104 _{29 26 24 23 23 23 21 20 19}

9 8 7 7 6 6 6

Aggregate km travelled (in billion)

F&R S-Trains 2010 4.0 2012 4.3 2011 2013 4.2 4.5 2010 1.1 2012 2011 2013 1.2 1.3 1.3 CAGR: 4.7% CAGR: 2.0% Agent interactions Word-of-mouth

Online research

Offline/print reviews

Customer-driven marketing Company-driven marketing Traditional marketing

Direct marketing

Salesperson contact

28%

21%

39%

12%

Past experience 43%

31%

22%

5%

37%

26%

10%

Travellers in thousands pr day Frequency of trains Punctuality Information sharing Customer appreciation Customer service Travel experience

Solid financial position

DSB is in a stable financial position, with especially the East-West and Greater Copenhagen routes generating revenue and km

Negative reputation

However, DSB is still facing a negative customer reputation, mainly due to external factors outside DSB’s control

Changing demands

Customers demand real-time information, high level of comfort and rewards for loyalty

Significant performan. gap

Customers’ perception of DSB is extremely low compared to actual performance, which may challenge attracting and retaining customers

Gap between customer perception and DSB's actual performance Customer perception DSB's actual performance

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4

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2.

3.

Find destination

with Rejseplanen Purchase ticket online or station Get to station Take train Next step transport Post arrival

Customer feelings & thoughts Where to buy tickets, and what is cheapest? Will there be free seats on the train? Ire there free parking spaces for bikes/cars?

Is it too crowded to sit?

Evaluation of service: value creation Are there queue at station or delay?

Satisfaction with overall experience

Evaluation of DSB vs. alternative means of transportation? Discussions with family and friends?

Emotions throughout journey Emotions towards vendor

Information – My DSB

Acceleration – +Time

Relation – DSB Loyalty

Customer feelings & thoughts Customer feelings & thoughts

Opportunity to improve performance

Reduce hysteria by excellent service in disruption Interactive stations and "+time for everyone" in trains

Leverage on CRM system

Emphasize relations through loyalty program

MY

MY Capacity of bike/car parking _{Door to door – real time}

Expected and real delays Expected seat availability

Will ensure transparency, reduce uncertainty and adjust expectations

Personal account with REAL TIME DATA

Executive Analysis Solution Implementation Impact

Reference: Source: Source: Accenture, 2013

Improving the customer experience from A to Z

DSB must improve its performance on all parts of the customer journey – starting already form the planning of the journey,

and not ending until the consumers have left the station and evaluated the experience

1.

Aligning customers perception with DSB's actual performance reduces perceived performance gap … will impact Traffic Information and Product, Price &

Service which accounts for 36% of satisfaction Leverage big data: check-ins, purchases, and

consumer driven updates on real-time occurrences

Traffic information: 21%

Product, Price & Service: 15%

Report reasons for delay

Deliver real time data on delays and capacity Easiness of buying tickets, finding information

Frequency of trains Punctuality Information sharing Customer appreciation Customer service Travel experience

Information – My DSB

1.

1 2 3 4 5

”We need to be better at giving fast and correct information to our customers when unforeseen events occur”

– Susanne M. Koch, Ex. VP, Commercial & HR

Gap between customer perception and DSB's actual performance Customer perception DSB's actual performance

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In the trains: Fold-up tables and

headphones from the ceiling

At the stations: Virtual grocery

shopping and e-books with QR codes

Customer segments Customer profile Increase frequency by

Danes value personal and family time •  Grocery is time consuming •  Reading is soothing

•  Efficient use of time and ability to work •  Explore while traveling will increase

customer experience significantly

Renovation of infrastructure –

"The Reputation team"

Outsource coffee & snacks: Run by

sales to Hus Forbi which increases CSR

Will reduce negative emotions during severe interruptions

Distributes information on how improvements in the railway system will benefit the society

•  Coffee & snack serving will increase quality of “+-time

•  Will generate a positive emotion of “giving” and improve brand image

+

Motivated users: 37% of customers Un-motivated users: 38% of customers •  Positive towards

train and brand Focus: Punctuality

Focus:

Comfort & Ease

1.  Go big on social media – engagement easily traceable Let people get their facts straight!

•  Stations in Greater Copenhagen and East-West

•  Drives the most kilometres, people & revenue

•  Best reach: 300k out of 500k daily travels are within Greater Copenhagen

•  Communicate how DSB is one of the most punctual railways in Europe •  Educate consumers on how they

contribute to the reaching the political 2030 goal

•  … and how much CO2 emissions they are reducing every ride

Target initiatives on most important physical stations and in the East-West and S-trains

2. Promote on screens in trains and at stations

2. Acceleration – +Time for everyone

The following years will be challenging in terms of interruptions and delays. This needs to be mitigated by SUPERIOR

customer service and communication to not deteriorate the brand further.

… affects both motivated and unmotivated users positively

… supported by an extensive marketing campaign

Aligning customers perception with DSB's real performance reduces perceived performance gap

Frequency of trains Punctuality Information sharing Customer appreciation Customer service Travel experience 1 2 3 4 5 Gap between customer perception and DSB's actual performance Customer perception DSB's actual performance Customer segments Motivated users: 37% of customers Positive toward train & brand

Un-motivated users:

38% of customers Finds trains stressful Negative toward brand

Impact on segment

•  Enhanced brand perception •  Feeling of being appreciated and valued •  Improved trust and acceptance of delay •  Feeling of respect

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Reference: Source: Source: Accenture, 2013

Reference: http://www.bang-olufsen.com/da/investors/~/media/DCC1388928914215A07D196DA5F001E0.ashx

•  Make customers feel valued and encourage continuous loyalty by introducing a digital loyalty program

•  Encourage customers to use train as preferred mean of transportation by granting seasonal discounts on tickets •  Offer special treatment to loyal

members in case of conductor fees, etc.

•  A feeling of a higher degree of common ownership ✔ •  A feeling of being heard and

included ✔

•  A feeling of being rewarded and valued as a frequent customer ✔

“DSB is yours, mine and ours” DSB Loyalty program Points converted to rides

•  Establishing a consumer-centred platform: DSB Society as a part of My DSB

•  Allowing customers to discuss current problems, share their opinions and suggest new initiatives

•  Track and collect feedback as a step towards establishing a more comprehensive CRM-system for future leverage Leverage “everybody’s opinions” with DSB Society

Purc hase Percep tions Loyalty loop

DSB Loyalty

Consumer experience

Encourage loyalty with digital

loyalty program Award frequent customers with complimentary rides

•  Initiate a point system allowing customer’s to track and earn points per kilometres travelled as a part of DSB Loyalty Program

•  Automatically convert points to free rides when customers check in on their “Rejsekort” •  May be integrated with other

sorts of tickets long-term (i.e. system to track youth card)

Getting closer with the customers Enhancing brand & reputation Increasing # of passenger km Consumer perceptions •  Enhanced perception of DSB’s customer service ✔ •  Increased trust in DSB’s

overall business model ✔ •  Increased tolerance in case of

delays and other complications

✔

Impact

By leveraging the public’s many opinions towards DSB in combination with a comprehensive loyalty program, DSB is able

to establish a better relationship with its customers and enhance their experience and perceptions of DSB’s brand

3. Relation – DSB Loyalty program

Aligning customers perception with DSB's real performance reduces perceived performance gap

Frequency of trains Punctuality Information sharing Customer appreciation Customer service Travel experience 1 2 3 4 5 Gap between customer perception and DSB's actual performance Customer perception DSB's actual performance

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1.

2.

3. 2015

2016

2017

Strategic initiative Departments Work streams Implementation Performance indicators

•  On-time delivery •  Marketing ROI

•  Increased information sharing •  Increased satisfaction Product,

Price, Service Management Interaction design IT Marketing Web-design

•  Collaboration vendor of choice •  Frequency use of shopping &

book lending •  Increased satisfaction on comfort •  Marketing ROI

2015

2016

2017

Information

Acceleration

Relation

Successful implementation of the From A to Z with DSB will enable DSB to reach their

objectives within the next three years

Implementation

Sequential implementation plan will allow for DSB to leverage on progress from the earlier step to enhance impact

Management IT Marketing Operations Management IT Sales Marketing •  Planning My DSB •  Development My DSB •  Market My DSB •  Constant optimization based on customer feedback •  Collaboration vendors •  Implement QR initiative •  Make marketing for

Reputation team •  Buy & implement tables •  Marketing new initiatives

•  Develop DSB Society •  Develop DSB Loyal •  Monitor and build

relations based on Loyalty program

2015

2016

2017

•  Increase service satisfaction •  Increase engagement •  Increase loyalty

MY

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The financial strategy behind "From A to Z with DSB"

Our strategy makes it possible for DSB to enhance their customer reputation over a three year period while

growing their passenger kilometres by more than the target of 7,5%

Strategic impact

Impact Pr o b ab ili ty Small Big Low High IT-systems issues

Lack of supplier for E-library

Mitigation

Risk scenario

Vandalism on stations

Lack of supplier for E-grocery

Users of My DSB are better at updating than DSB

Build strong E-grocery wall Utilize video-surveliance Offer station-space for free

Communicate to and incentivise employees

Non-adoption of IT-systems Continue to develop and

communicate about the IT-system

Executive Analysis Solution Implementation Impact

Reference: http://www.dsb.dk/Global/PDF/Om%20DSB%20-%20Tal/Vestt%c3%a6lling%202013%20Hovedrapport%20ver2.pdf Reference: http://www.dsb.dk/Global/Kommunikation/DSB%20hovedtal%20rejser%202009-2013%20(2).pdf

… by increasing customer satisfaction (scale 0-100)

DSB will generate revenue (in millions) … while retaining the profit margin

… and increasing the number of km travelled

(in millions) ₄₆₈

Information Accelerate Relations Target

80 306

111

Excess

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Information Accelerate Relations Total

35%

6%

29% 14%

Current

… in a long-term profitable strategy

Relations Accelerate Information 2017 2016 2015 10 20 30 2015 2016 2017 -23.8 4.3 0.8 Opposition towards marketing campaign

DSB is heading towards 2030 with increased customer satisfaction and a head

start in reaching the imposed government km targets

2014 2017

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