Loyalty is the key

An increasing number of bus operators are introducing loyalty schemes to up patronage

Loyalty is the key
Vix Technology chief executive officer Steve Gallagher says Australian public transport providers are starting to look more closely at customer loyalty card programs and partnering with other businesses

While loyalty rewards have been alive and kicking since the late 1980s, public transport providers are only just starting to realise their potential applications for Australian networks.

Melbourne-based business Vix Technology wants to encourage Australian public transport providers to embrace loyalty schemes to increase patronage.

Vix Technology chief executive officer Steve Gallagher says having a loyalty rewards program in place enables public transport providers to form valuable partnerships with other businesses, and has proved popular with public transport providers who have trialled these systems overseas.

Essentially, customers can earn points or receive discounts by purchasing using their transport access card or phone app at retail or service partners, such as convenience stores or cafes and takeaway fast-food outlets near stations.

Profit margins can be tight in public transport, so it is vital that providers try to team up with other businesses to provide even more value to their customers.

"It opens up new opportunities for new revenue streams in an industry where transit fares generally only generate 50 to 60 per cent of the cost of running the service," Gallagher says.

The company has previously enabled these services for private operators overseas in Bangkok and will soon implement pilots for operators in the UK and Rome.

"Bangkok is currently using our system to enable payment and loyalty card programs, which give customers the opportunity to earn and redeem points and encourages greater use of the public transport system," says Gallagher. "The partnership opportunities are huge."

There has been a gradual shift in the attitude of public transport providers in Australia, Gallagher says, in that they are starting to see themselves more as a business delivering real customer service and less as only providing public transportation to a mass market that need not be concerned with the value each customer is getting.

"Governments traditionally don’t see their role as providing value added services in addition to transportation to their customers," Gallagher says.

"In the past, they haven’t investigated commercial enticements as intensely as private companies."

He is confident in the next five to ten years the uptake of customer rewards and loyalty programs on both card and mobile platforms will skyrocket, as public transport providers look for ways to increase patronage and enhance the customer experience.

Vix Technology created the first public transport smartcard system back in 1987 in Darwin and has worked with public transport providers from all over the world since.

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