Open-access success

In July 2012, Hamburg-Köln-Express – the first private long-distance rail service in Germany – began operations. Since then, this young company has successfully found its market, with a growing number of passengers regularly using the new service.

When Hamburg-Köln-Express (HKX) comm – enced its rail services between Hamburg and Cologne on 23 July 2012, it was the first openaccess operator to break into the German longdistance rail market. At the time of providing this article and looking back over the first seven months of operations, HKX trains had safely travelled more than 360,000km, or a total of more than 800 trips. Train punctuality also scored highly and in-line with the general market at an average of between 80 and 90%.

HKX trains have been operating with a medium to high load factor; especially at weekends when vehicles have been almost full. An average of 25,000 passengers per month have chosen to travel with HKX, which means within the first seven months of operations, a total of approximately 175,000 passengers used the new service, making it a success.

This success was possible because HKX focused on a number of features that customers find very important when choosing a mode of transport, including: Easy booking and access to tickets, a competitive price, and a good service offering. We believe passengers want a good value service at an adequate price.

Easy booking

The main channel that we focused on for customers to book HKX tickets was the internet. And to make the booking process simple, the software was designed with a clear focus on customers’ needs. The goal was to keep the booking process as simple as possible with as few steps (or ‘clicks’) as possible. In addition to purchasing tickets online, they can also be bought via a service hotline, and spontane – ous travellers can also buy their ticket directly on the train, at a somewhat higher but still competitive price.

Furthermore, we have started to co-operate with public transport companies in the cities along the HKX route. They will sell tickets at counters at their local information and ticket stores.

Competitive price

All HKX ticket prices include a free-of-charge seat reservation and start at a moderate level and get more expensive depending on the expected load factor and the individual booking status of each train. In most cases, this means that customers who book in advance get the best offer. But in cases where trains sell less than expected, prices may plummet again shortly before service starts. We also run special offers from time-to-time and advertise them via the internet, social media sites and directly on our own website. These special offers are either planned to test the market or to fill-up trains with low load factors. On the other hand, ticket prices can be more expensive when demand is high, like during vacations or before and after national holidays.

This price policy makes HKX particularly attractive for people who are price sensitive and can choose their time of travel autonomously.

Good service

We offer an efficient on-board service with trained staff that are friendly and attentive and are always available to help customers during their journey with travel information, etc. Snacks and beverages are also sold on-board HKX trains to make the journey as comfortable as possible for passengers.

Customers have expressed that they are impressed with how HKX handles challenges like delays or technical problems. On these occasions, we will inform customers and help them to continue their journey. If the problem is known in advance then customers are informed via e-mail or telephone ahead of travel so they can choose to switch to another departure time or day, or cancel the ticket altogether. If the problem occurs just hours before travel then we make sure that customers can use a train service from another rail company for the missing leg of their journey.

During the first seven months of service, there were a few disruptions due to bad weather or for technical reasons. In each case, HKX staff took care of passengers and made sure they reached their final destinations safely.

Our customers value such an attentive service, especially as delays and cancellations are normally extremely stressful situations. We have been given some great feedback about our customer-orientated behaviour which is seen by customers as a positive reason to choose HKX over other modes of transportation. This is also great word-of-mouth publicity in helping us secure more new customers to use the HKX service.

Generating new customers for the passenger rail sector

Easy booking, competitive prices and a good service offering – these three aspects charact – erise HKX and can influence whether customers choose our rail service over other modes of transportation.

In January 2013, we conducted a customer survey and found that after only seven months in operation HKX has accumulated a generous number of regular customers, and that many of them have not travelled by train before. The survey also revealed that the ‘typical’ HKX passenger is between 18 and 29 years old, or in their 50s or 60s. We have also found that approximately 50% of our passengers are female, which is higher than average for long-distance travel by rail. Many passengers use our service to visit their friends and family, or to go on city trips and to visit cultural events.

These results indicate that HKX has opened a new market for rail travel. This is especially true for young, price sensitive people, who are showing new travel behaviours compared to previous generations. For them, cars are not the status symbols they used to be, particularly as many people living in big cities don’t even own a car. Instead they are demonstrating a different and more selective mobility behaviour, choosing whatever mode of transportation is most suited to that day’s situation and to where they want to go. This means they are very open to a railway service; but only if the value for money is perceived as being right – which I think is what HKX offers. The other group of people who are open to rail travel are women of all ages. Given a competitive price and good service, train travel for them feels more attractive and safer than travelling alone, or by car. As a consequence they will go on city and cultural trips and, in general, will travel more.

Another insight after seven months of operations is that it is not necessary to design new trains to offer such a service; what counts more is that trains are clean and comfortable, offer a good on-board service and an attractive ticket price policy.

Having opened a new market for rail in Germany, HKX will now continue extending its customer base targeting the groups that have shown themselves responsive to our service, but we will also target new customer groups.

Our market research has shown that a third group can be found using our service: People who commute between Hamburg and Cologne, mostly at the weekend and for business reasons. These are less price sensitive, and less time autonomous than the other groups. They simply want a reliable service and a competitive price for going back and forth between business and home. Right now they make up to 20% of our customers, but we believe this could increase over time.

Another way to react to the market is to offer longer trains and more services. In the next few months we want to gradually offer longer trains, particularly at weekends. We anticipate that by the end of 2013, the timetable will be extended so that three trains can travel in each direction every day. The experiences of the first seven months have shown that the market for extending the HKX service is definitely there.

Biography:

Eva Kreienkamp worked for big corporate companies in various management positions in fin – ance, controlling, sales and marketing and as CEO of a marketing institute and event management agency before joining the Hamburg-Köln-Express GmbH in 2009 as CFO. Giving her longstanding expertise in sales and marketing, in 2011 she took over as CEO, a position in which she is now responsible for a successful positioning of the product right from the start.