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flexiSeason Feasibility Report

Version: 1.0 Document date: 17/06/15

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Approval

End of Project report flexiSeason Trial

Version 1.0

Activity Job Title Name Signature Date

Author Project Manager Michelle Nelson M Nelson 17/06/15

Approval Programme

Manager

Adam Phayer A Phayer 17/06/15

Approval Head of Revenue

Development

Dave Walker D Walker 17/06/15

Approval Head of Retail Riz Wahid R Wahid 17/06/15

Approval Commerical

Director

Alex Foulds A Foulds 17/06/15



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Document Information

Master Location : ~$exiSeason trial DfT report v1.0_final issued.doc

File Name : flexiSeason Trial End of Project Report

Distribution : key Steering Group, DfT

Change History

Versio

n No.

Date Details of Changes included in

update

Author(s)

0.1 22nd April 2015

Initial version Michelle Nelson

0.2 2nd June 2015

Document re-written Michelle Nelson

1.0 17th June

2015

Issued Michelle Nelson



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1 Introduction

The flexiSeason trial was undertaken to meet the Committed Obligation

outlined within the Southern Railway franchise agreement appendix 11, paragraph 6.1

On or before 4 weeks following the successful implementation of ITSO on Prestige and ITSO on Prestige compatible software outside London on the

Horsham to London Victoria and Brighton to London Victoria routes (where implementation means successful testing and sign off by TfL and Southern

representatives of the IOP system – which Southern will not unreasonably withhold). The Franchisee shall introduce on a trial basis three innovative

season ticket types using ITSO-Certified Smartmedia technology on the Horsham to London Victoria route, the Brighton to London Victoria route and

the Haywards Heath to London Victoria route. Such trials shall be conducted

by the franchisee for at least one year. The season ticket types to be trialled shall be as follows (or such other types as may be agreed between the

Franchisee and the Secretary of State)”

a) Cash back season tickets;

b) Early bird flexible season tickets; and

c) Three day season tickets

This feasibility report outlines the scope, outcomes, costs and benefits of the flexiSeason trial as outlined in paragraph 6.2 of Appendix 11.

“No later than three months following conclusion of the trial referred to in paragraph 6.1 the Franchisee shall provide to the Secretary of State a feasibility report detailing the costs and benefits of introducing such innovative season ticket types throughout the Franchise. Where such feasibility report shows that there is a good business case for the introduction of any innovative season ticket type across the Franchise, the Franchisee shall introduce such innovative season ticket type throughout the Franchise in accordance with the terms of the proposals set out in the feasibility report”



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2 Management Summary

Southern rolled the three ticket types into one flexible season pass and ran a closed

trial of a flexiSeason pass consisting of 65 customers who regularly travelled using these passes. There were initially 255 customers who signed up to be part of the trial, however a number of customers had to drop out due to various reason i.e.

they did not live on the line of route or moved house.

Customers were able to purchase in batches of five up to 50-day passes, day travel

passes priced at the cost of a weekly season. The passes enable customers to travel on a return basis at a cheaper basis based on season prices rate than a daily return

paper ticket from Horsham, Haywards Heath or Brighton to London Victoria. As part of the trial Southern also implemented a variety of cash back incentives to reward customers for travelling off peak ranging from 10%, 20% and 30% to

review whether customers would alter their travel times to avoid peak services in the am or pm. Southern’s approach was to make available a product which met the

needs of part-time workers, customers who can change their working hours, and customers who purchase a weekly season, however only need to travel 2, 3 or 4 days per week. Any unused days within the standard weekly season are carried

forward to another day up to a period of 3 months.

The trial suggests that customers were not influenced by cashback, but very

receptive to having flexible passes, which could be carried forward for future travel at no extra cost. Southern was unable to quantify whether the customers travelling with the flexible passes were part-time workers.

3 Objectives The flexiSeason trial had three objectives:

1) To demonstrate the potential wider benefits which could be gained from introducing flexible season tickets for part-time workers who would normally

purchase a standard weekly ticket but would be better served if they were able to purchase a more flexible ticket for travel during Monday to Friday.

2) To assess whether passengers when provided with an incentive would change their travel behaviour, and travel on the less crowded trains off-peak.

3) To conduct passenger surveys to gain feedback on the introduction of a

flexiseason product. To deliver paragraph 6.1 of Appendix 11, Southern ran a closed trial known as the

flexiSeason trial which delivered the three ticket types (cash back season tickets,



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early bird flexible season tickets and three day season tickets) into one flexible season pass.

4 Requirements

To meet the Committed Obligation Appendix 11, 6.1, Southern ran a trial between 30th March 2014 and 30th March 2015. The intention was to recruit 150 customers,

50 customers per trial area from Brighton, Horsham and Haywards Heath), and implemented a flexiSeason pass to cover all three innovative ticket types. Several

incentives were introduced to test demand management at different times during the trial.

The Product

The flexiSeason pass was introduced and emulated some of the principles of the existing season passes. It was a point-to-point ‘season’ ticket, valid for travel

between two stations nominated by the customer, for a set period of time

The flexiSeason passes offered passes, which were valid for 3 months from the date of purchase. The passes could be purchased in batches of 5 passes up to 50 passes. They were priced at the cost to reflect what a customer would pay if they purchased

a weekly season ticket.

The three fundamental differences between the flexiSeason pass and conventional fixed dated season tickets (magnetic stripe seasons and their ITSO equivalents) are:

1. The flexiSeason pass is a multi-day carnet product, which means it is made

up of a series of stored one day passes, with a start date and an end date of three months, which is updated when a customer purchases additional tickets. The passes were activated individually when used and valid for one

day.

2. The flexiSeason passes offered additional customer flexibility in that it could be used as a two or three day a week season ticket, because unused passes were simply carried forward. This is a significant advantage over short period

ticketing options available today and caters for the part time and flexible working commuter, which is becoming more prevalent in organisations

today.



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Example scenario – weekly commuter travelling with flexiSeason passes:

Carnet usage:

1. The flexiSeason passes had a demand management ‘cash back’ incentive for

customers who changed their travel pattern from peak time travel to off-

peak (after 09:00 – 16:14 and 19:16 – 06:29) tested at specific times during the trial.

5 Approach and Implementation The geographical scope of the trial was defined as per the franchise commitment. Three journey combinations were included in the trial:

Brighton to London Victoria;

Haywards Heath to London Victoria; and Horsham to London Victoria.

Southern e-mailed their online passenger database and advertised on the website for customers to apply to join the trial. Participants who stayed in the trial until the

end were rewarded with three months free travel between their host station and London Victoria. It was a closed trial to enable Southern to:

Contain any technical issues. Control and manage customer communication and feedback.

Contain any revenue risks.



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The project was a phased implementation. It was the intention to retail flexiSeason passes from Self-Service Ticket machines and online, however due to technical

issues it was not possible to retail the passes online. Customers were able to top up at the Self Service Ticket Vending machines at Brighton, Haywards Heath, Hove and Horsham.

Phase 1 – gathering a baseline

Participants of the trial were issued with an ITSO key smartcard to enable their normal travel behaviour to be monitored and form a baseline for measuring

changes in behaviour during the trial.

Phase 2 – the Introduction of a non-demand managed flexiSeason Product

The project was delivered to the following timeline:

2014 2015

Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar

Baseline Study flexiSeason passes

(Carnet)

Cash

Prize

Draw to

win

£250.00

cheque

Carnet

Season

with

lower

10%

incentive

Carnet

Season

with

higher

20%

incentive

Carnet

Season

with

higher

30%

incentive

flexiSeason day

ticket purchases

End of flexiseason

trial

As part of the trial Southern also implemented a variety of cash back incentives to reward customers for travelling off peak ranging from 10%, 20% and 30% to see

what amount if any would alter customers travel times. The cashback reward was based on the cost of a day ticket (the 10% reward was calculated against the cost of a flexiSeason day pass i.e. 5 day passes costing £99.30, (£99.30/5_ travelling

off peak reward of £1.99 per journey

A dedicated mailbox called flexiSeason was set up and this was the primary method used to communicate to customers and customers to Southern. Throughout the trial customers received regular updates on what was coming next and were also

issued a number of suveys to complete and provide feedback.

6 Trial results



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Customers were asked for their main reason for joining the trial. The data suggests that there was an understanding that they were able to make significant savings on

their travel. In addition the lure of three months free travel for staying in the trial was viewed as a good benefit.

To gauge whether participants could change their travel behaviour they were asked whether or not their job allowed them to be flexible in their start and finish times.

The results showed:

A high percentage of customers responded that their job does allow them to be flexible. However, there is no clarification as to whether this flexibility would allow them to travel in the off-peak period.

Incentives



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The incentives which Southern implemented as part of the trial were, a Prize Draw and Incremental cash back as outlined above.

Prize Draw

The prize draw was implemented in October 2015 and finished in November 2015.

Entry into the prize draw was automatic for all customers who travelled using flexiSeason passes during the prize draw period. A winner was chosen and awarded

£250.00. The data shows that customers did not change their travel commitments during the prize draw period.

Of those passengers who completed the survey following the prize draw; only 4%

advised that they travelled due to the prize draw, the other 96% were travelling anyway. None of the participants responded to a question on what level of prize

would encourage them to travel. The results suggest participants were already travelling.

Intriguingly whilst some passengers stated that they changed their travel pattern as

result of the prize draw element we did not see any data to show a systematic change in any passenger’s behaviour during the prize draw phase. Given the very

small sample size were unable to draw any broader conclusion around the reasons for this apparent inconsistency.

Cashback incentives

The cash back incentives were implemented, 10%, in November, 20% in December

and 30% in January 2015 for any off-peak travel made with flexiSeason passes.

Below is a highlight of what customers earned:



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Incentive No. of customers rewarded

Average Earnings

Lowest Earnings

Highest Earnings

10% 24 £7.62 £1.99 £22.30

20% 50 £9.86 £1.86 £22.30

30% 46 £19.34 £2.84 £83.61

In the December survey, participants were asked whether the opportunity to earn cash back had influenced them to change their travel pattern.

The results of the survey suggest that whilst 70% of participants had the ability to change their travel time the majority chose not to. This suggests that either the flexibility which they had to change their travel time did not allow extend to

travelling off-peak or they were not interested in gaining cashback rewards.

Participants were asked to feedback on what level of cash back incentives would enable them to change their journey pattern.



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The data suggests that between 20 and 30% would be the optimal level for

providing cash back.

To corroborate the data customers were asked what time they travelled using their

flexiSeason passes.



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The results show that the majority of participants travelled during the peak times in

the morning and the afternoon.

To gain an understanding of whether the flexiSeason pass was used on a regular or

irregular basis, customers were asked how often they used their flexiSeason pass.

The findings suggest that the majority of customers benefitted from purchasing flexiSeason passes in comparison to either daily or season tickets.

Previous analysis has shown that customers who travelled more than 3 days automatically benefitted from flexiSeason based on the view that these customers

would have purchased a weekly season. In addition customers who travelled less than three times per week and previously purchased daily anytime daily tickets also

benefitted from flexiSeason as they were able to purchase travel tickets at approximately 50% cheaper than a daily ticket. Likewise if these customers



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purchased weekly seasons, they made a saving, as the remaining passes were carried forward for future travel.

Customer travel pattern

It was difficult to identify customers who made clear changes in travel pattern

The travel pattern we expected to see is shown below for customer 135161. Their

journey pattern during the 0% and 10% phase was generally before the peak period at 09.00. However, after the 20% and 30% phase the customer clearly

moved to travelling after the peak period thus receiving the higher cashback value.

0% 10% 20% 30%

08:38 1

08:39

08:40

08:41 1 1

08:42 1

08:43 1

08:44

08:45 1 1

08:46 1 1

08:47 1

08:48 1

08:49

08:51

08:56 1 1

08:57 1

09:01 1

09:02 1

09:03

09:04 1

09:06

09:07 1 1

09:08 1 5

09:09 1 4

Customer 135161

However, there were only 5 customers where this pattern could be definitively

identified for customer behaviour. By comparison in the remainder of cases the travel pattern was similar to customer 152669 below where the normal time they

travelled was largely unchanged irrespective of the level of discount.

To some extent this was surprising, as we had expected that with a 30% discount

the majority of passengers who had applied for a flexi scheme would have changed travel behaviour. Given the very small number of people in the trial and that only



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five passengers could be identified as having made any change in their regular travel pattern we have been unable to draw statistically valid conclusions on how

passengers would behave if there was a broader rollout of flexi ticketing.

0 0.1 0.2 0.3

08:30 1

08:31

08:32

08:33

08:35 1

08:36

08:37 1 2

08:38 1

08:39 3

08:40 1

08:41 5

08:42

08:43 1 2

08:44

08:45 1

Customer 152669

Customers were asked to feedback their views on the flexiSeason product. The data below represents the responses from 29 participants:



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Further data is required to establish what the customer issues were.

The data below represents the responses from 29 participants on which areas of the

trial they felt were successful:

Overwhelmingly, the results matched the responses to the question asked as to

why customers joined the trial. The ability to save money scored really highly, along with the three months free travel. These results corroborated the reasons

why customers joined the trial at the start of the project.

Customer Comms

The primary comms method used to communicate with customers on the trial was

e-mail. The majority of customers, who responded to the surveys during the trial, noted this to be an effective means of communication and were happy with the

information provided. They responded as follows

Did you receive enough e-mail communication about the trial and its progress?



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The majority of customers responded that the information sent to them was sufficient.

Customers were asked whether e-mail communications were clear and easy to understand.

Customers were positive that the communication to them was clear and understood.

To confirm that the best approach was used to communicate with participants, they were asked. Which form of communication suits you best?

The results show that using e-mails as the main approach for communicating with

customers was correct and well received.



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7 Summary

The survey results suggest that implementing flexiSeason Day pass with a cashback incentive to encourage customers to travel off-peak had a minimal impact. Whilst

customer feedback is very positive and there is a demand for the flexiSeason product it was unclear whether passengers made significant changes in their existing travel patterns.

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