When British Rail was first privatised, Richard Branson’s Virgin Group was awarded 2 of the rail franchises. When they started operating these in 1997, they combined them into one business – Virgin Trains.
The Franchise Agreement contained aggressive growth targets. Virgin Trains had to hit the ground running and dramatically increase passenger revenue.
The 2 franchises Virgin had inherited were on their knees. The trains and railway infrastructure had not been upgraded since the 1960s, and the reliability and punctuality of their franchises were poor. Virgin had committed to replace the trains with a state-of-the-art fleet, but this was going to take time… 7 years to be precise.
In addition, the Virgin brand was severely at odds with the Virgin Trains offering. In fact, everything the Virgin brand stood for was diametrically opposed to what they’d inherited.
The Marketing Challenge
How do you increase passenger revenue when your rail network is crumbling and you can’t leverage your hugely popular brand?
The Marketing Solution
You dig deep into your data and get creative!
Our starting place was to examine how full the trains were by time of day. We then examined the demographic profiles of the key urban areas our trains passed through.
Armed with this information, we created some rail products, a first in this industry. Our aim was to fill the trains, which had to run as scheduled whether they were full or not, more evenly across the day. To this end, we created 2 core products:
Virgin Value: our off-peak ticket for those who were price-sensitive and time-flexible. Our one-way fare from London to Birmingham was £5!!
Virgin Business: our peak travel ticket for those who were less-price senstive and not at all time-flexible. This was loaded with extras like meals, drinks and newspapers.
We also worked very closely with our operations colleagues to create a service programme to deliver these products and “Virginify” the customer experience at all touchpoints.
Year 1 Passenger Revenue