Virgin Trains East Coast (VTEC) have now been the operator of the InterCity East Coast franchise for two years, taking over from the state owned East Coast on 1st March 2015. We're taking a look at how VTEC has performed over the last year in the following areas:
In our review of the first year we were confident that VTEC would be making efforts to improve the loyalty and recognition offering to their customers. After East Coast Rewards was replaced with Nectar it left those with season tickets and those who booked with business travel agents (many companies insist all business travel is booked through their official agents) with no rewards at all. Those who booked tickets online were only able to earn Nectar points or Virgin Atlantic Flying Club miles which were not as generous as the previous rewards scheme.
In our meetings with VTEC we had been assured that season ticket holders had not been forgotten and the intention was to be able to recognise their regular customers to provide appropriate reward and incentive. This was dependent on the rollout of a new software platform, this has been delayed and that's why from a loyalty perspective things have appeared stagnant from a customer point of view.
Although it looks like VTEC are contractually stuck with Nectar and Flying Club for the moment it doesn't stop them offering additional benefits on top of these schemes. A mix of 'surprise & delight' and structured benefits based on spending could be offered. If you're a member of a frequent flyer scheme such as British Airways Executive Club, Flying Blue, Miles & More or Flying Club the more you fly the higher the tier you reach. Each tier unlocks benefits such as lounge access, priority boarding, etc. There's no reason why a tier based approach couldn't be offered on VTEC giving benefits to the most frequent travellers.
Two developments on the West Coast Mainline (WCML) have shown there's a demand for a loyalty scheme similar to East Coast Rewards. During the consultation period for the new WCML franchise Transport Focus passenger research showed 'customer recognition and reward' as one of the key areas for improvement within the next franchise (the current franchise is run by Virgin Trains West Coast who also offer Nectar and Flying Club). This was also backed up by a survey by Virgin Trains West Coast's own customer panel that rated the current loyalty scheme 'poor' and they wanted a points based scheme that offered rail related benefits such as free travel.
We continue to meet with VTEC to discuss loyalty options and offer suggestions of what they can do to improve this. We know that Nectar is nowhere near as generous as the previous offering, and while it doesn’t look like they will be ending the partnership anytime soon, we will continue to press them to bolster their loyalty offering.
Next: Product innovation