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THE new strategy being developed for German Rail's (DB) passenger business is a far cry from the disastrous Plan & Save scheme that plunged the railway into crisis in the early months of 2003. Instead of the complexities (and flawed thinking) of Plan & Save, DB's passenger division has now firmly adopted "simplicity" and "ease of access" as its guiding principles.

According to Mr Frank Klingenhofer, the railway's head of strategy for passenger transport, DB also wants to provide value-added services packaged within a mobility pass based on the core business but with elements beyond the core. Conscious of the fact that DB's share of the passenger transport market is only 8%, Klingenh0fer also wants to reach out to motorists who constitute most of the rest of the market.

DB learned some hard lessons from the Plan & Save debacle. After three years of planning involving 500 DB staff plus training for 24,000 railway staff and 20,000 travel agents, the 200 million [euro] scheme was designed to reward passengers willing to book ahead for travel on specific trains by offering discounts of up to 40% depending on how far in advance the reservation was made.

Penalties, including a 45 [euro] fee plus the difference between the discounted fare and the standard fare were imposed if travel plans were changed. Apart from creating friction between DB and its customers, this also made the cost of a trip more expensive than if the passenger had bought a standard ticket in the first place. The effects were dramatic. DB suffered a 7.1% revenue reduction and a 13.5% traffic reduction on long-distance services in the first quarter of 2003.

Campaign

Part of the campaign to win back hearts and minds was a one-off exercise earlier this year that addressed the challenge from low-cost airlines and also turned the Plan & Save concept on its head. It involved selling 1.2 million tickets at 49 [euro] for two people through the German supermarket chain, Lidl. The tickets sold out within two hours, and the key to the success, apart from the price, was undoubtedly that there were no booking or other conditions attached to the offer.

"We wanted to do things differently with more aggressive and sexy pricing. People did not need to decide where they wanted to go or when. They just bought the ticket at a fixed price, and then they could go anywhere in Germany when they wanted," said Klingenhofer.

# posted by Medical Information : 11:05 PM