SNCB Online Challenge Solution by Benchmark company at Solvay Business Game 2013

17 February 2012

Single card for network mobility:

creating multifunctional loyalty

system in Belgium

2

cv

3Source: Benchmark company analysis, case data.

Current ticketing system isn’t perfect and definitely

there is a room for improvement

1 Overview Stakeholders BenchmarkingMarket

Infrastructural hubs of networked

mobility are being created

around stations…

… but still all services require separate

cards and there’s no single solution for

network mobility

Separated Blue-bike card

required (Subscription

€10 + usage payment)

Single tickets/MOBIB card

required (unified urban

transport card)

Cambio Card required

B-Parking card/single

ticket required

0

20

40

60

80

100

2011 20122010

Cambio-locations

Cambio-cars

Parking areas near stations built in 2010-2012

Tickets bought online/in

the ticket office required

Service Type of ticket/card

Bike rental

Car rental

Parking

City

transport

Trains

Number of Cambio car rental locations

and cars provided near stations

The integrated ticketing system

to simplify network mobility should be

implemented

cv


The new model should meet goals of key stakeholders: the

government, citizens and 4 transport operators


Operators

Citizens

Stakeholders Specific objectives and conditions of stakeholder Shared goals

• Faster boarding and changing transport

• Minimize offline ticket sales,

automatic card charging

• Smart pay-as-you-go system

• Easier, low-threshold transport for the customer

• Stimulate a technical compromise

between operators

• Reduce pressure from car traffic on the cities

• Operators' independence

• Remain current ticketing during the new system

implementation

• Improve 3rd Party Payer system

• Decrease fraud

• CRM at the level of individual customer

• Phased transition to smart card

• Good cost to profit ratio

• Continued compatibility with the current fares

• Maintain the role of the train conductor

• Separate customer management and fares offering

Government


There are many successful interoperable models with South

Korean as the most suitable for the Belgium situation


Hong-Kong

Seoul

Moscow

Types of cardsServices provided

• Home portable card reader - to check the balance on the card (Denmark, Hong Kong)

• Cards as a payment instrument in retails stores, cafes, vending machines (South Korea)

• Special security protection system against loss or theft of the card (England)

Netherlands

OV-chipkaart

T-money card

Octopus card

• Issued by transport

authorities (monthly

limited /unlimited

passes)

• Issued by banks

• Just check-in

• No info for customer

• Plans for huge

modernization

- as an electronic purse

-as a means of storing

a travel product

• Check in/out

compulsory

• Anonymous

(Child/Adult/Elder)

• Personalized

• Branded cards

• Airport Express Tourist

• Single journey cards

(reusable)

• T-money journey cards

(incl. affiliated cards)

• T-money chip

• City transportation


• Trains

Octopus Rewards

program - rewards at

merchants that are

program partners

• Disposable (no top-up)

• Anonymous (reusable)

• Personal (possible to

store tickets and other

products >1 month)

Personal cards are

available for the

citizens of Belgium,

Germany and

Luxemburg


• Retail stores

• Parking

• Leisure activities

Functioning Special features


• Retail stores

• Parking

• Leisure activities

For cards issued by

banks trips cost less

when customer travels

a lot

Other ideas

Single

Moscow card

• Just check-in

• Detailed passenger

information

Wide variety of

partners

Deposit system for

non-personal cards for

foreigners

• Check in/out compulsory

6


We offer the simple interoperable ticketing model that fits

stakeholders conditions…

2 Proposition Product details Marketing Distribution Business model Plan & RisksConcept

1 Please, refer to the next slide to look at the product features deeply2 Including current fare types of different operators.

At the heart of the system there will be a multifunctional payment & loyalty chip card for Belgians with a

smartphone chip option and non-personal rechargeable & reusable chip card made primarily for foreigners

Pro

du

ct

typ

es

Fare

typ

es

Serv

ices

pro

vid

ed

Issu

ers

Banks SPV SPV SPV

Pay as

you goSeasonal 2

Pay as

you go

• ID card linkage

• Provides maximum variety

of services of new ticketing model

• Deposit payment required

• All features of chip card are included

• The main difference is an integration with

customer smartphone

• No linkage with ID (for non-residents)

• Rechargeable and reusable: one can buy

the card, charge/recharge it and then

return it in the exchange of deposit value

Loyal

Pay as

you goSeasonal 2

Use

rs Belgian

citizensBelgian

citizens

Foreign

people

Public

transport

Additional

servicesE-money Public

transport

Additional

servicesE-money

Public

transport

Additional

services


…and has great features in terms of services provided, loyalty

program breadth and different types of issuers and fare types

2 Proposition

Issuers and fare types

Product features Short description

Services

Loyalty program

• Public transport services is the

heart of the system

• Includes services of 4 operators

(trains, buses, trams, subway)

• The interoperable concept will

include car parking, rental of

bikes and auto, leisure activities

and so on (provided by operators

and its partners)

• The wide loyalty program will

allow to use the card to pay in

retail stores and other partners

• There will be an opportunity to

use for Internet payments

+ -

• The program will include

transport operators and wide

variety of partners that give

users miles points for every

usage of its services

• Factors defining the amount of

points: type of service, type of

customers amount of

purchase/length of trip/traffic

absence, intermodality

combination and so on

• Points will be used to pay for any

services provided by the whole

loyalty system

• Opportunity to transfer points or

donate them

• SPV will issue the majority of cards and give the

issue rights to the banks

• Banks will issue co-branding cards that contain

special bonuses provided by them

• Pay as you go – smart system that allows consumer to

use the products at the optimal price

• Seasonal – fare for the certain time periods (incl. the

option of separate or combined usage of services)

Product details Marketing Distribution Business model Plan & RisksConcept

Develop mobile/web application with

wide gamification options based on

mile points that stimulates people to

use product more, compete with each

other, etc (together with exploring all

information about the services)


The only way to succeed with such product is to inform

citizens, involve them into its creation and stimulate to use

2 Proposition

Stimulating to use itReach quantitative and qualitative growth by offering different

incentives and providing customers with the unique experience

Getting to know itSpread the idea of new ticketing model by involving customers to

creation process, educating them and stimulating word of mouth

21

Involve Belgian citizens into product

development through creation of

discussing crowdsourcing platform

and surveys “Make your future

experience awesome” (channels:

official site, social networks)

Create simple and clear “how to”

guides and brochures emphasizing

advantages of the card and the

importance of wide card penetration

(channels: official site, social networks

partner sites, advertising on transport)

Stimulate customers to spread the

word about the project via social

networks and word of mouth (#, by

offering the most active users options

of cards pre-order and welcoming

mile points)

Inspire people to switch to the card by

offering them welcoming mile points,

awarding them for referrals and other

useful actions that expand user base

Encourage customers to use

intermodality opportunities by creating

“city quests” and giving bonuses for its

completion (#, use train, bike rental

and bus in 1 trip)


Wide range of distribution channels makes it easy to get a card, use or dispose it


In order to provide convenient, quick and easily accessible

service, broad distribution channels should be used

2 Proposition

Source: Benchmark company analysis, case data.

Card top-up Exists now

• Vending machines

• Ticket windows

• Kiosks, shops,

tourist centers

• Web-site/app

• Ticket windows

• Vending machines

• Tourist centers

• ATMs

• Auto load

• Web-site

• Ticket windows

• Post

To build a proper network, the infrastructure development is needed

App & site

providing info

about network

mobility issues

Special vending

machines on all

stations, parking

and bike rentals

Portable card-

readers for

conductors in

trains

Card readers at

check in/out points

in transport,

parking, rentals

Card purchase Exists now

Loyal

Type of card



The organizational structure will be based on SPV runned by 4

operators in cooperation with the government & partners

2 Proposition

Management process is held by SPV:

• Creating & maintaining cards

• Float management

• Travel data management

• Clearing between operators

• Infrastructure and distribution

management

• Infrastructure and maintenance

costs shared between the 4

operators (major part), government

and partly banks

• SNCB covers the bigger

part of costs

• Partners and additional service

providers pay the royalty for each

transaction and for the miles

• Payed by the customer

• Payed by Third party payers

(employers, government, other

parties)

Management Costs & Income distribution Card payment

Partners of loyalty

program

Technical support

(cards issuers)

SPV

Income from

services

Investments and

operation costs

InvestmentsControl (partly)

SNCB STIB

De Lijn SRWT

Government

Royalty for

customers Thales

Banks

Personal

cards/…

Credit cards

Rent/parking

HoReCa

Retailers

Airlines


• Providing the first issue of the cards to the citizens

• Creating and activating the promotion program in offline/online

• Developing the smartphone app and web-site to support the system

• Finding partners for the loyalty program and contracting with the banks

2 Proposition

• Forming SPV by thetransport operators

• Making design of the card and specifying its technical features

• Determining the fares and elaborating the loyalty program

• Supplying stations with special equipment

2q 2013 1q 2014 1q 2015 1q 20163 quarters 4 quarters 4 quarters

1. Product Development 2. Brussels pilot launching

• Spreading the system on all major stations and transport hubs

• Increasing the number of partners involved in the loyalty program

• Developing the Third Party payments program within employers and schools

• Adjusting the product and fares specifications according to the customers needs

3. Country expansion

The project will be divided into 3 phases starting from the

product development till the whole country is covered

Low demand:People prefer the old tickets

Type of risk Threat level Measures to prevent

Card won’t function due to infrastructure drawbacks

The loyalty program will not succeed due to lack of partners

• Explain the promotional effect of the program to the

companies

• Involve more partners

• Offer the card that is more convenient and/or provides

cheaper services than simple tickets

• Promote new card &explain network mobility pros

• Provide the overall access to the card purchase/top-up

infrastructure

• Install equipment within all the operators

There are some serious risks but they all can be eliminated by certain measures



13


The proposed system simplifies and unifies current transpor-

tation and other relative services and provides intermodality

3 Summary

cv

Stakeholders Shared Goals

Servicessimplification

Single card forwide varietyof services

Improved intermodality

Suggested Solution

Key advantages:

1. Improves the service convenience and accessibility

2. Simplifies network mobility

3. Aggregates all services within transportation hubs

4. Provides loyalty bonuses to save money

Transportation

operators

Belgian

government

Belgian

Citizens

Services provided:

• Transportation (bus, tram, train, etc)

• E-money (retail stores, internet purchases)

• Additional services (parking, rental, leisure)

Benchmark Companyhigh-experienced team of fellows with strong

spirit that study and work together for 4 years