Rail Operator Improves Forecast Accuracy, Supercharges Ridership and Revenue
Out of nowhere, revenue and ridership in major markets plunged. The executive team demanded answers. It turned out demand forecasts were often wrong.
This customer success story is about a multi-billion-dollar passenger rail company. Their name has been redacted, per their request, to protect the market advantage they enjoy by using Revenue Analytics software.
The Customer: Leading Rail Operator Running 300+ Trains
With $3.4 billion in revenue each year and 300+ train routes daily, this passenger rail operator is a recognized leader in the industry.
They are well-known for their medium and long-distance intercity services.
The Challenge: Major Markets Under Intense Pressure
For a long time, there was no cause for concern. Operations ran like clockwork, costs were under control, and the business was healthy and growing.
With the business progressing at a good pace, the Revenue Management team wanted to focus on taking their success streak to the next level.
So, they installed a new Revenue Management System (RMS) to give the team advanced capabilities to manage their trains.
Shortly after, major markets began showing signs of significant pressure. Both revenue and ridership were down, and the executive management team demanded answers. What was going on? Was competition increasing? Were customers choosing other modes of transportation?
The analysts were slammed with their day-to-day workload and didn’t have bandwidth to fully investigate.
But they had noticed a troubling pattern—there was unmistakable overlap between the underperforming markets and the new RMS rollout.
As a result, they were confident that the new RMS was a large part of the problem, if not the whole problem, and they needed to act quickly.
The Solution: Replace Broken RMS Forecast
They hired Revenue Analytics to fix their software problem.
Revenue Analytics completed a comprehensive assessment of the company’s RMS and Revenue Management processes and quickly discovered what was wrong.
The team’s analysts were spending a lot of time overriding the RMS’s demand forecast. This was because the RMS demand forecast was often wrong. What’s more, the overrides weren’t making the desired impact, so analysts were also changing the price manually.
The inaccurate forecast, and the resulting price changes and confusion, were causing problematic fares that were depressing ridership and causing revenue leakage.
Revenue Analytics worked with the company to help them address their forecasting issue.
The Results: Big Boosts to Ridership & Revenue
Almost immediately, the Revenue Management team saw forecast accuracy improve dramatically.
As a result, they could stop the constant overrides and manual price changes and focus on driving real value by focusing on real exceptions.
In just a few short months, the Revenue Management team was able to flip the revenue trend, first getting the business back on track, and then boosting ridership and revenue to new heights.
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