Memorandum to the Transport Committee of the
House of Commons
From the Ten Percent Club
15 May 2006
General statement:
From the wording of the Press Notice announcing the
Committee's 2006 inquiry into bus services, it appears that the
main thrust will lie in the area of the relationship between patronage
growth and statutory regulation. Members of the Ten Percent Club,
whilst appreciating that the strategic organisation of the bus
industry can facilitate or constrain the degree of growth that
is possible, believe that the attention of the inquiry would be
better focussed on the question set in the final bullet point:
"Does the bus have a future?".
Research undertaken by the Club during the past twelve
months has revealed sound evidence that the industry, working
within the existing statutory arrangements, can attract many more
customers if it re-focuses upon their lifestyle requirements rather
than continuing to introspectively concentrate upon its own organisation
and apparent difficulties.
The Club and its work
The Ten Percent Club was formed in April 2004 by
eighteen senior professionals in the bus industry. Its membership
has now reached 28. The members include company directors, a
PTE chief executive and other public sector senior staff and leading
academics.
Its name originated in the 2000 Government target
to increase national bus patronage by 10% over the following ten
years. As Club members were already involved in activities resulting
in higher growth figures, they considered that the industry, public
and private sector working together, should be more than capable
of achieving the target. The purpose of the Club was to learn
from other industries the ways in which the bus industry might
become more progressive in attracting prospective customers.
In this memorandum the term "bus industry"
means all aspects of the provision of bus services, both in the
private and public sectors.
The Club imports experts to engage in workshops,
discussing the techniques and internal managerial attitudes of
other industries and, over the past two years, members have recurrently
confirmed their view that there is much scope for the bus industry
to reshape itself to attract significant patronage growth. To
test their belief, they have undertaken nine case studies where
consistent patronage growth has been achieved and have searched
for the common ingredients that might explain the difference between
these particular success stories and the general national decline
(outside London). The case studies were:
Routes:
WitchWay (Nelson and Burnley to Manchester) - 16%
growth in the month of October 2004 compared to October 2005
Route 36 (Ripon and Harrogate to Leeds)- 18% growth
in the month of October 2003 compared to October 2004
The more routes (Poole, Bournemouth and Christchurch)-
a weekday average increase of 10% on the Poole/Bournemouth stretch
Rainbow 5 (in Nottingham) - 58.8% growth over the
seven years to 2005
Bristol Showcase 76/77 9North to South Bristol)-
6.4% growth over the two years to 2005
Networks:
Brighton & Hove - 40.1% growth over eight years
to 2005
Nottingham City Transport - 36% growth in two years
from launch in 2001/2
Medway Towns - 8.5% over the two years 2004 and 2005
Corby Star - 89% growth over three years to 2005
measured by comparing four week Autumn periods.
The report is due to be published by Transit Magazine
later this year but, at present, the results are only available
in draft form. This memorandum summarises the findings in the
context of the interests of the Transport Committee as stated
in Press Notice 35/2005-06.
Following on from their work, therefore, the Club
wishes to place before the Transport Committee the following information
in regard to the last two bullet points of the Press Notice, i.e.
a) the relevance of London as a role model and
b) the future for the bus
The relevance of London as a role model
London is such a large magnet for economic activity
and employment that the travel habits of all those who live within
its catchment are unlike any other city in the UK. The sheer
geographic size of the city and the disposition of land uses within
and around it, the consequent congestion and the density of public
transport networks are factors that strongly influence lifestyles,
travel habits and mode choice. In most cases transport choices
are very much constrained and people possess limited options for
home location in their attempts to balance accessibility to employment,
schools, shops and entertainment. It is not, therefore, surprising
that the population of London is prepared to accept central area
congestion charging whereas other cities, the largest of which
is less than one seventh the size, evidently do not possess the
same characteristics. Peak traffic conditions in Inner London
exist over at least a three hour period whereas they extend over
only one hour in many other towns and cities, greatly increasing
the options for the choice of departure time by car drivers.
All the foregoing factors conspire to create an easier
market for the bus in London than exists in the rest of the UK.
Club members do not, therefore, believe that London is or can
be a role model for the rest of the country. Nevertheless, the
Club wishes to make it clear that there are very valuable lessons
of detail that can be learned from the London experiences, e.g.
on-board video camera enforcement of bus lanes and the Oyster
card. It is also widely acknowledged that the purchasing power
of Transport for London is highly significant in dictating the
specification requirements upon vehicle manufacturers and the
overall financial capability of the organisation is such that
it can engage in levels of product development and marketing that
are not feasible in many locations outside London.
The future of the bus (outside London)
The Club has held workshops with a well-known socio-economic
forecaster, commercial market researchers and large retail product
marketing agencies and there is no doubt amongst the membership
that there exists a strong demand for the bus that is currently
somewhat latent. With an increasing level of car ownership and
desire of people to travel, there is no practical alternative
to the bus if the quality of urban life is not to decline radically
and our towns and cities are to be economically viable. It is
inevitable that, eventually, people will be forced to accept some
form of communal transport but the process will not involve a
sudden switch and will take many years to put into effect. It
is therefore essential, in the opinion of the membership, that
the industry recognises that the public, in our democratic and
highly consumeristic society, will need to be attracted and encouraged
rather than forced to change habits.
In their case study report, the members possess the
evidence that the industry needs to become much more aware of
the opportunities for increasing the attractiveness of its offer
to the public and of the techniques that are already in existence
without any need for strategic organisational change.
Members take the view that the bus industry now exists
in a society that is very different to the 1940s when bus travel
was an integral part of everyday life for most of the population.
Over the past 50 years attitudes have developed that involve
a growing customer demand to be courted by those who wish to provide
products and sell services. Many traditional aspects of the bus
industry have become stuck in the pre-1950 perceptions of society
but, judging by the research of the Club, there is now a large
body of professional opinion within both the operating companies
and local authorities that recognises the need for bus services
to be managed as retail products, adopting a more visionary stance
of considering the attitudes and motivations of prospective customers,
i.e. those for whom the bus is perceived as an out-dated and low
quality product that does not match their lifestyle expectations.
A summary of the report follows and it reveals that
prospective customers tend to imagine bus travel at a detailed
level, heavily biased by a stereotype and reputation that has
developed over many years. It is therefore only possible to win
their custom by dealing properly with the minutiae of the journey
and by pushing aside old reputations and images using modern marketing
techniques. This is not an argument for "spin" but
a real concern to please the customer with tailored products and
services that are very carefully composed and delivered.
Perhaps the most telling message from the Club's
studies is the essential ability to understand and to produce
services that will attract customers at local level, i.e. city,
town or county, because customers mostly only perceive the bus
product as the one route that they regularly take, the driver
who they may be used to, the other regular customers, and the
best location to sit in the bus. It is at this prosaic level
that customers are satisfied and won.
Whilst large strategic changes may help in the delivery
of high quality measures in the longer term, neither the industry
nor the society that it serves can afford to sit around waiting
for the perfect organisation to arrive and it is clear that much
can be achieved by just releasing the pent-up enthusiasms of those
visionary and committed people within the industry, mainly at
the local level, to do better with the tools already at their
disposal. Unless this is done, by the time a more perfect strategic
organisation does arrive, the enthusiasm and vision will have
been lost and the bus brand image will have declined even further.
Club members consequently believe that whatever the
outcome of the Transport Committee's review, it must contribute
to the encouragement and morale of the local managers, private
and public sector, who are key in the development of bus services
that customers actually want and not what the industry thinks
they want.
Rigid prescription of local operational methods and
procedures, excessive financial bid justifications and target
chasing will not contribute to the desired end and the first priority
of the review should be to stand back from prescription to enable
the enthusiasm that already exists to flourish.
Summary of the Ten Percent Club Report "A
Recipe for Growth" due to be published later in 2006
To be successful in the increasingly customer demand
led culture of the last 50 years, the realisation that the bus
product needs to reposition itself as something other than a public
utility of last resort is now well established in the industry.
Against a background of a declining national patronage (outside
London) there are some shining examples of radical and sustained
growth and, if it is possible to achieve success in some cases,
we need to study and understand the reasons. The Ten Percent
Club has, in the last twelve months, studied five successful routes
and four networks to find common ingredients
The studies have been, however, not the conventional
approach of the industry to the subject. The Club starts from
the premise that ours is a product that bears many similarities
to those of high street retailers. Just as customers can choose
to buy clothes from one shop or another, most can choose to go
by car if they wish or, more likely, they will organise their
lives to avoid using the bus entirely. As in the retail world,
a rude shop assistant can lose a sale and an inadequate driver
can offend and humiliate a new passenger. Offended customers will
choose alternatives next time next time and will spread negative
messages. The report is therefore based upon the premise that
the industry exists in a commercially competitive market and that
it wishes to win market share from the car. The evidence of the
case studies is that it should employ similar managerial attitudes
and techniques to other retail industries in the intense analysis
of the attitudes of prospective customers.
Consumers, i.e. customers, have come to expect that
they will be courted in the market place to exercise their choice
between alternatives. Even if they don't always have that choice,
people demand to be treated as though they do. Until now, the
industry has been much preoccupied with the provision of the basics
of the bus product offer and there is no argument that good timekeeping
and basic accessibility are the minimum functional requirements
to achieve customer satisfaction. But it is by building on this
level of delivery to the point of delighting customers that Club
members believe it will be possible to achieve, incrementally
through many individual improvement projects, a greater receptiveness
at the brand image level among prospective customers, that will
make it more likely that they will warm to subsequent direct marketing
campaigns.
The report demonstrates that potential customer demand
exists to justify the necessary investment and that the organisation
and management expertise now exists to deliver a positive and
expanding industry. But there is a challenge to convey an image
of an industry that finds ways around problems, and can imagine
bus travel as a different product - as something that is locked
into people's lifestyle aspirations.
The analysis has revealed five key ingredients for
success:
1. Customers perceive a service in the round
and often in the context of the one route that they regularly
take. It is therefore essential that all the promoting partners
work together, bus operators and the various departments of local
authorities to address problems on a route by route or network
by network basis, i.e. at the detailed local level. For success,
each route or network must be holistically treated as the public
will not be fooled by a collection of gimmicks that do not quite
fit together, but as a total mix of ingredients that, when taken
together, produce a much more pleasing totality. Particular features
may spark the imagination of customers, even though they may not
conventionally be considered important, but the part that they
play in the recipe must be correctly understood and they must
not be allowed to overshadow other ingredients.
2. A thorough knowledge of the local market so
that opportunities can be identified for the bus to be promoted
as the best means of transport for the circumstance. The local
managers are key players in this.
3. The acquisition of very high quality market
research, using the full range of quantitative and qualitative
techniques available, and an attitude of management that is orientated
to the prospective customer's view of the world, not the introspective
and retrospective view that has restricted management's perceptions
within the industry so much in the past.
4. A preparedness for companies and local authorities
to allow local managers to take worthwhile measured risks. As
in most large industries, transformation of the product is unlikely
to be a smooth process, influenced and inhibited by both external
and internal obstacles and the shifting wide context of society.
Change is a challenge. It is inevitable that advances will be
made first in some and not other areas, and some moves will prove
to be fruitless and others highly significant.
5. There is sound evidence that the industry
possesses a wealth of enthusiasm for and dedication to the bus
product and to the desire to promote a much improved generic bus
brand image. The commitment required by the various teams to
deliver consistent high quality services cannot be commanded using
statutory controls and contracts and it can only come from the
internal personal motivation of the staff themselves, from top
management to people who deal directly with the customers - the
drivers and parking attendants.
Each of the cases described in this report have employed
elements that go beyond the industry norm:
- Brighton, Nottingham are examples where the bus
service aims to be part of the city identity even to the point
where customers look upon the bus service as their own.
- In Medway Towns and Corby, the new bus services
are designed to lock into the progressive identities of towns
and communities in regeneration areas.
- The Witchway, Route 36, Rainbow 5 and "more"
routes aim to offer a top-of -the-range product and an acute sensitivity
to customer desires.
- In Bristol, Showcase Route 76/77 lies in a particularly
congested urban environment where public and private sectors are
developing "whole route" schemes under difficult circumstances.
P. Wiltshire
Secretary
Ten Percent Club
| 
