Presented by :

Shahzad Khan 24

Kapil Mhatre 34

Joe Augustine 38

Jwala Nayak 41

Kapil Singh 52

Gaurav Taishete 53

Customer Relationship Management :A Case Study of Andhra Pradesh State

Road Transport Corporation

• APSRTC was setup on November 1,1958.

• Occupies prime position among all the passenger road transport undertakings in the world and entered Guiness book of world records for owning largest fleet of buses on Oct 31,1999.

• APSRTC has 19,270 buses with 766 bus stations, 208 depots and 1,880 bus shelters, cover 6.63 million KMs.and carry 127.87 million people to their destinations every day.

• Corporation covers 95% of bus transport in AP.

Background

• Corporation utilizes 99% of its fleet.

• Per vehicle utilization is 314 Kms & Occupancy ratio is 63% with cancellations amounting to 2.07% of total number of services.

• Bus –staff ratio is 6.97

• Corporation faces threat from its rivals in the private sector operating illegal buses on nationalized routes , also ply jeeps, taxis, medium-sized vehicles and seven seaters.

Background

Dimensions of C R M for APSRTC

Revenue related Customer Relationship

- Passengers- Cargo/Goods- Advertisement- Estate Revenue- Scrap- Grants (State govt./ Central govt.)- Subsidies (State govt.)- Financial institutions- Capital Markets

Expenditure related Customer Relationship

- HSD Oil, Lubricants - Tyres - Spare parts - Maintenance - Contractors

NetRevenue

Levers

- Occupancy Ratio - Operating staff - Gross income - External Relationship management- Other income

• An effective Customer Relationship Management appears to be the only Strategy for continuation and survival of APSRTC.

• APSRTC would have to change over from routine management of operations to providing CRM orientation to its revenue and expense activities.

• Survey of customer satisfaction in APSRTC points out that there is a need to bring about fundamental change in the attitudes of management and employees.

• To generate a higher revenue stream for APSRTC – elements to drive CRM must be put in place.

Analysis

Q1. What according to You ,is the most Important Aspect of the Problem, which needs to be addressed

to on Top Priority basis and Why ?

• APSRTC’s problem of fast declining occupancy ratio is the Core of the problem since 1% decline in occupancy ratio translated to a loss of revenue of approximately 100 Crs.

• Interaction with employees revealed that –

- Relationships on income & expenditure side are considered as formal transactions.

- No long term policy to profit from these relationships.

- No awareness about implied losses incurred & revenues foregone due to lack of understanding of implications.

- No plans to conduct training programmes on CRM – To bring attitudinal change among employees at different levels.

The most important aspect of the problem is the –‘’Problem Identification itself ‘’

• Management & Employees don’t relate that Customer occupancy is directly proportional to effective CRM & improving interface with customers.

Therefore need to be addressed on Top Priority is to convert existing transactional and episodic relationship to Customer Relationship Management to ensure that existing customers patronize only APSRTC & new customers are added.

Q2. How would you go about Implementing the various Steps in the CRM Program ,in the order of

Importance / Priority ?

Implementing the various Steps in the CRM Program in the order of Importance / Priority.

• First of all Management should treat all continuing transactions not as one to one event but in mould of customer relationships.

• Use techniques of supplier relationship management in utilizing adequate quantity & good quality of materials and Customizing according to different makes of buses resulting in providing better travel experience to customers.

• Design an effective advertising programme with good visualization of services offered.

Implementing the various Steps in the CRM Program in the order of Importance / Priority.

• Execute strategies to retain existing customers and winning new customers through - - Improving customer facilities. - Facilitating payments through credit card /on-line facilities. - Specially designed tariffs - Felicitating loyal customers.

• Treat advertisers as privileged customers – Would generate more revenues & create more clientele.

• Conduct periodic surveys to access the impact of steps undertaken & improvise on improving customer relationships.

Q3. What steps would you recommend to APSRTC,to reduce Expenditure and Cost ?

Recommendations to reduce Expenditure and Cost

Suppliers

• Inventory management through Supplier Relationship Management thereby resulting in :

- Supplying required quantity & quality of materials at special price.

- Suppliers adjusting with needs of cash flows of APSRTC.

- Save money by asking suppliers to purchase suitable machinery. - Partnership with oil companies in designing technology & machinery & developing physical infrastructure.

Recommendations to reduce Expenditure and Cost

• Improve operational efficiency with respect to customer needs.

• Concentrate on route rationalization to increase vehicle utilization /Km, occupancy and reduce bus-staff ratio.

• Encourage use of technology to project bus services linking various places & informing the customers regarding cancellations / new routes / special fares etc. thereby discouraging customers to shift to private operators – reducing cost of acquiring new customers.

Q4. What steps would you recommend to APSRTC , to increase the revenue ?

• Penny Saved is Penny Earned – Optimum utilization of resources.

• Strive for increase in customer traffic & retain customers by -

- Advertising benefits of traveling by APSRTC compared to private operators.

- Highlighting fares across different routes, special discounts, loyalty programmes.

- Upgrade existing physical infrastructure in form of ultra – modern buses, aesthetically built up bus stations & taking care of customer preferences in terms of booking of tickets, frequency of buses & convenient timings.

Recommendations to Increase Revenue

• Treating advertisers as privileged customers – exploit various advertising options.

• Improving aesthetics of bus stops & installing ‘Instant snack machines’ at key areas.

Recommendations to Increase Revenue

APSRTC should therefore provide a comfortable travelexperience to its customers which will result in more customers

using state transport and thereby increasing revenues.

Q5. What actions APSRTC should take to improve the Quality of Service to passenger’s perceptions as collected during Survey conducted by Institute of

Public Enterprise 2001 ?

According to Survey conducted by Institute of Public Enterprise 2001

• Passengers were not satisfied with the frequency of operations and condition of bus shelters. • Overall performance was reported to be satisfactory.

Reasons were :

• Managers displayed shortsighted view often concentrating on achieving operational efficiency by ignoring customer needs.

• Dissatisfaction, lack of motivation ,frustration amongst front-line employees resulted in autocratic approach.

Empowerment of frontline staff will cause permanent change in behavioral patterns and enhance their commitment to quality of

service, customer satisfaction, loyalty & profitability.

• Reliability : Punctuality & maintaining schedules as per customer’s needs.

• Responsiveness : Willingness of employees to help. Responding to written & verbal complaints.

• Assurance : Action to be taken on customer's feedback and loyalty programmes to be effectively used to retain existing customers.

• Empathy : Caring and individualized attention of employees to customers.

• Tangibility : Superior physical infrastructure – Ambience, cleanliness, technology & advertising.

Improvement in Quality of Services

Q6. Compare briefly the Performance of Maharashtra State Road Transport Corporation with the performance of

APSRTC ?

• Established in 1950

• 16,000-odd buses, 12,000 employees, about 70 lakh citizens utilizing the service daily.

• ST does not only carry people but also takes care of the postal mail, distribution of medicines, newspapers and even tiffins to children studying in the bigger towns. • In rural areas, it aids farmers to transport their goods to the cities. All this in the face of bad roads, recurring losses, hiked taxes and yet it retains its identity of a transport service for everybody. • Tours & Packages

MSRTC

`Jithe Rasta, tithe ST'

Better vehicle utilization boosts APSRTC profit

Surplus land to be used to develop commuter amenity centers havingan air conditioned bus terminal, shopping centers, ATMs, reservation facilities and multiplexes

MSRTC Revamp

Had suffered losses to the tune of Rs.1331.2 Crs. from 2002 -2007 due to operation of buses on uneconomical routes, excess consumption of fuel & unviable city services but drastic changes in operational pattern and a complete changeover of the design of buses helped his corporation come out of the red and earn profits.

Performance of MSRTC and APSRTC

Thank You