FirstGroup CCO Martin Bould believes his group is leading the way on harnessing technology

The First Bus app has improved vastly over the past three years

 

The future of First Bus is uncertain. It was the acorn from which the towering FirstGroup oak grew, but it has now been branded “non core” by a group that today generates around half of its income in North America. First Bus could soon be “demerged” from the rest of the group, sold off, or broken up and sold off.

First Bus, as we currently know it, might not be part of the future of transport – but that isn’t stopping its management team from preparing their business for the road ahead. The company is arguably ahead of its peers in terms of embracing new technologies that can enhance the customer experience.

For example, it has been almost one year since First Bus became the first national bus operator to accept payment from contactless bankcards on all of its services, following the installation of new Ticketer machines onto all 5,700 of its vehicles in the UK. First Bus went a step further in July, beginning a trial of ‘Tap & Cap’ contactless payments in Aberdeen.

Meanwhile, its First Bus app is now ‘best in class’ among the national bus groups. It currently has a rating of 4.6 stars out of five from iPhone users.

These workstreams are now being guided by Martin Bould, who joined FirstGroup as chief commercial officer in January 2019. His previous experience was in the telecoms sector, where he spent 14 years with Vodafone and O2 before spending three years as a CEO in the Cayman Islands.

Doing the right thing for our customers and trying to grow the sector is what we are all about

Despite the uncertainty, Bould says that its “business as usual” at First. “Doing the right thing for our customers and trying to grow the sector is what we are all about,” he explains.

Bould sees similarities between buses and the telecoms world in which he has spent his career – both exist to connect people – but there are differences too. After eight months working in the bus industry he believes that the telecoms sector is “much more customer centric and much more innovative” whereas the bus sector is focussed on engineering, maintenance, safety, and the running of the bus operation. His ambition is to help change that.

His former employers, Vodafone and O2, were national businesses operating within a highly competitive sector. This competition between seven or eight marketing-led, customer-led organisations, each capable of seducing each others’ customers, drove innovation and drove value. In contrast, he observes that competition for First Bus is not just from Stagecoach or Arriva, it’s from driving or cycling or walking. Modal shift is where the big growth opportunity lies.

Something else which telecoms and buses have in common is disruption. Apple, Google and WhatsApp have all disrupted the way people communicate, just as others are disrupting the way we travel.

That’s what we need to avoid as a bus company, that we lose the relationship to a Citymapper or a Trainline and we just become the metal box and the four wheels

Bould’s biggest concern is retention of the customer relationship. “I think about my 13-year-old son. He has no relationship with O2. His is with Instagram or WhatsApp or Facebook or Apple now,” he says. “That’s what we need to avoid as a bus company, that we lose the relationship to a Citymapper or a Trainline and we just become the metal box and the four wheels. The value is in the customer relationship and the data.”

Retaining this relationship with their customers will require bus operators to innovate and address customer frustrations, before someone else does – and that has become his mission. “There is no question that technology and innovative disruptors are forcing us to rethink our retail, purchase and help model,” he says.

Since joining First Bus, Bould has sought to use an evidence-based approach to focus attention on the things that stop people from using buses.

“There is a real issue around finding the right ticket or the right bus or knowing where to get off,” he says. “Fortunately, some of the emerging technology, which is in some cases brought to us by emerging competition, is making that whole retail, planning, buying, getting help a lot easier. And, of course, adoption of smartphone technology and the proliferation of Wi-Fi hotspots and 4G and since 5G is enabling a much more connected real time experience for customers.”

The First Bus app

With smartphones serving as the remote controls for our lives, apps have become essential tools . The First Bus app has improved vastly over the past three years. As recently as November 2016 it had a one-star rating from iPhone users, behind Stagecoach and Arriva. Now it is ahead of both.

Bould says that the message from customers is that they want the app to be easy and they want to be in control. Responding to these demands in conjunction with developers Future Platforms and Corethree, First merged its information and ticketing apps in February and has made a series of other modifications.

“We are always building in features, testing, learning, going back and taking on board that customer feedback,” he says. “We have been very obsessed about the planning and buying experience.”

Reduced price fares are offered to drive up use of the app, and a new ‘Tell First Bus’ feature has been introduced to enable feedback.

The app means that First Bus now has a lot more data about customers than it had when everyone paid cash. “We know what bus they are on, which ticket they buy, how often they travel, what their value is – which means we can have a lot more personal and one to one conversation with them,” Bould explains.

He sees the potential to build one-to-one relationships with customers, rewarding loyalty, upselling other First Bus products, and advertising other products and services to them where appropriate. It could also help to maintain relationships when things go wrong.

We haven’t as a sector been particularly good at apologising or offering some empathy. I can imagine a world where we have a one-on-one conversation – ‘sorry your bus was late today, have something on us’

“Buses do run late,” he says. “We haven’t as a sector been particularly good at apologising or offering some empathy. I can imagine a world where we have a one-on-one conversation – ‘sorry your bus was late today, have something on us’ … We might get a bit more forgiveness when things go wrong.”

The vision for First Bus is to become a trusted partner within the lives of customers. “Without giving away all aspects of our roadmap, we are absolutely looking at things that can better inform the decision the customer is making when they leave the house or are thinking about leaving the house,” says Bould. “That could be traffic, it could be weather, it could be an update on the situation in the town centre, it could be the number of steps you are going to take today or the impact of the carbon footprint.

“We’ve got all that data. It’s just taking a while to build it all in to our infrastructure … That is the direction of travel, absolutely.”

The 2017 Bus Services Act will eventually compel bus operators to open up their data for anyone to use, including rival operators or disrupters like Citymapper. Bould’s response to that is “bring it on”.

“We believe we are ahead of the game with our app today,” he says. “And having more access to more data, including open source data, will enable us to enhance our own proposition.”

Bould believes that the opportunities that emerge from this could help the bus sector with the modal shift challenge.

“We ultimately want to be brilliant at offering travel solutions to as many consumers as possible,” he says. “I think this helps us to fulfil that objective.”

Contactless ticketing

Contactless bankcard technology is also helping First Bus to improve its offer to customers. In Aberdeen, the group has taken the next step with contactless and introduced automatic price capping. Customers simply tap on the reader each time they board a bus and they are automatically charged the cheapest available ticket based on the number of journeys they make (no more than £4.40 a day or £18 per week). Customers can log in to an online portal and see what they have been charged, should they wish to do so.

Bould says that the incentive to do this has been the prospect of reduced boarding times and therefore faster journeys. Making life easier for passengers and the potential to grow patronage are also major benefits.

I think it’s fair to say we want to accelerate as quickly as possible taking cash off our buses. Cash is the past.

“I think it’s fair to say we want to accelerate as quickly as possible taking cash off our buses,” he says. “Cash is the past.”

More than half of the 1.6 million journeys that are made on First’s buses every day across the UK now use digital ticketing (contactless or m-tickets). “Our ambition is 80% over the next couple of years and frankly getting to 100% as quickly as we can,” says Bould.

However, he recognises that there is a portion of society who don’t have access to smartphones or bankcards and he says that finding a cashless proposition that works for them is at the forefront of his thinking.

The early indications for Tap and Cap in Aberdeen are positive, with week-on-week growth. Bould says that the big shift has been within the one-third of bus users in the city who were already using contactless. Within this group, around 38% are now using Tap and Cap rather than ‘Model 1’ contactless (selecting and then paying for a ticket), which continues to be offered.

Aberdeen was chosen as the testbed for Tap and Cap because it is already a city with a high level of non cash payment. Furthermore, the flat fare system used by First Aberdeen made Tap and Cap less complicated. Having witnessed the success in Aberdeen, the MDs of other First subsidiaries are now saying ‘when can we have it?’ First Bus is planning to introduce Tap and Cap trials in five other locations by the end of March 2020. This will see the concept tested in more complex environments with more a greater number of fare zones that require users to tap-in when boarding and also tap-out when alighting.

First Bus is already looking towards the next step for contactless ticketing – multi-operator price capping. The company has been working with stakeholders, including the Confederation for Passenger Transport, and is committed to introducing this nationwide by 2022.

The view at First Bus is that if operators can come together and offer London-style seamless ticketing, then sub-national transport bodies like Transport for the North will have no case to impose new structures onto them.

“The reality is that it is just the direction of travel so we need to get on and deal with it,” Bould explains.

‘We are taking it seriously’

Money is tight at First Bus, as elsewhere in the bus industry, but the desire to keep evolving the customer proposition is being backed up with resources. “We have invested over £10m in the last two years in the app and in contactless,” says Bould. “That’s a big number. We are taking it seriously.”

Whatever happens to FirstGroup and its UK bus business, Bould says that bus will continue to harness technology to evolve its offer to customers.

The message to us, the leadership team on bus, is that we need to deliver this year’s numbers and we need to make sure we are building a business that has future value and is a really compelling proposition

“The message to us, the leadership team on bus, is that we need to deliver this year’s numbers and we need to make sure we are building a business that has future value and is a really compelling proposition,” says Bould.

“It is business as usual. Anyone who’s interested in looking at this business going forward will be interested in our digital strategy, our retail strategy, our customer strategy. And I genuinely believe having been here eight months that we have got as compelling a customer story as anybody else, if not better.”

This article appears in the latest issue of Passenger Transport.

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