CRM implementation by APSRTC

The Andhra Pradesh State Road Transport Corporation (APSRTC),a leading passenger road transport organization, is at cross roads in search of finding new line 7 length for its continuity & survival. The case provides the profile of the APSRTC and the strategies for its turnaround through a massive restructuring of its CRM.

PROFILE OF APSRTC
Setup on November 1,1958,the APSRTC has registered a phenomenal growth occupying the prime position among all the passenger road transport undertaking in the world with 18,946 buses and 1,30,000 employees. It has a network of 8,678 routes with 212 bus depots which operate 60 lakh kilometers per day transporting 110 lakh passengers. It has entered the Guiness Book of World Records for owning the largest fleet of buses on October 31, 1999. The corporation covers 95% of bus transport sector in the state.

Problems @ APSRTC
The financial performance of the corporation is very tardy. The losses have increased from Rs 49 to 217.24 crores in 1998-99.Thwe corporation faces a great threat from its rival in the private sector who decides operating illegal buses on nationalized routes. Also ply jeeps, taxies, medium sized vehicles and seven seaters. The corporation felt that due to lack of interface with customers, is the prime cause of its continuous loss making. This feeling lead the APSRTC officials to perform a workshop; which revealed that; The relationships on income and expenditure side are considered as formal transaction. There is no long term policy to profit from these relationships. There are no plans to conduct training programs on CRM to bring in attitudinal change among the employees at different levels. The operational staff is the weakest link in the chain as they are expected to use only hands and not exercise their minds. These outcomes emphasize a new approach to convert the existing transitional and episodic relationships to CRM.
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Survey to understand customers perception
A survey was conducted by Institute of public Enterprise to know the perceptions of passengers travelling by city buses in the twin cities of Hyderabad & Secunderabad. The survey reveals that the passengers were not satisfied were not satisfied with the frequency of operations and condition of bus shelters. A greater focus in these areas would enhance the quality perceptions of the customers. With regards to other attributes, APSRTC seems to be performing well and it should maintain the current levels of service quality. The overall performance was reported to be satisfactory. The survey also reveals that; The depot managers, who act as the kingpin in the organization, spend almost all their time in operational activities and direction. They hardly get any time at their disposal to monitor and service the customers. The corporation has not been able to identify the needs and motivation of its customers to retain them. The emphasis on Kilometers per litre compels drivers and conductors to skip bus stops to save on fuel. Dissatisfied employees bring their feelings while interacting with their customers.

Recommendations for successful CRM implementation

Acquiring new customers can cost five times more than the cost of satisfying and retaining current customers. The customer profit rate tends to increase over the lifetime of the retained current customers. Further, the retained customers generate good word of mouth for the organization. The customer retention rate can be increased by providing rewards to the loyal ones. The service quality and customer satisfaction should go hand in hand. Not only maintaining the schedules as mentioned in the timetable guide but also moulding the schedules as per the needs of the customers. Continuous interactions and a fine grip of the ground situation. Quality of technical maintenance of the bus, employee regularity and delinquency.

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Responsiveness means the willingness of employees needs is the central component of responsiveness. Analysis and management of complaints. Politeness and knowledge of employees and their ability to convey trust to the customers. Individualized attention of employees to passengers. The presence of super physical infrastructure in the form of ultra modern buses, aesthetically built up bus stations and customer conveniences. Need to develop a mechanism where both complaint registration and complaint redressal are facilitated. The employees dealing with complaints should be proactive attitude of anticipating problems and prioritizing them. The customers should be rewarded for pointing out genuine complaints. The passengers should be compensated for the problems faced by them. Customers call centers could be an effective mechanism to boost CRM. Internet facilities and interconnections for trains and buses for forward and return journeys. Bus stops and shelters should provide information relating to the roots, frequency and timing of the buses. Information about arrivals and departures could be electronically displayed and announced in major languages. Geographical Information System (GIS) could be deployed.

CONCLUSION
In the face of steeply falling revenues and cut-throat competition, an effective CRM appears to be the only strategy for the continuation and survival of the APSRTC as a commercial entity. Once suggestions are put in place, the scenario of CRM would become effective which finally ought to generate a higher level revenue stream for the APSRTC.

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Customer Relationship Management : A Case Study of Andhra Pradesh State Road Transport Corporation Presentation Transcript
1. Customer Relationship Management : A Case Study of Andhra Pradesh State Road Transport Corporation 2. 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 3. 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 4. 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 Net Revenue Levers Occupancy Ratio - Operating staff Gross income - External Relationship management Other income 5. 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

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6. 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 ? 7. APSRTCs 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. 8. The most important aspect of the problem is the Problem Identification itself Management & Employees dont 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. 9. Q2. How would you go about Implementing the various Steps in the CRM Program ,in the order of Importance / Priority ? 10. 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. 11. Implementing the various Steps in the CRM Program in the order of Importance / Priority. Execute strategies to retain existing customers

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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. 12. Q3. What steps would you recommend to APSRTC, to reduce Expenditure and Cost ? 13. 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. 14. 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. 15. Q4. What steps would you recommend to APSRTC , to increase the revenue ? 16. 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

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tickets, frequency of buses & convenient timings. Recommendations to Increase Revenue 17. 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 travel experience to its customers which will result in more customers using state transport and thereby increasing revenues. 18. Q5. What actions APSRTC should take to improve the Quality of Service to passengers perceptions as collected during Survey conducted by Institute of Public Enterprise 2001 ? 19. 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. 20. Reliability : Punctuality & maintaining schedules as per customers 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 21. Q6. Compare briefly the Performance of Maharashtra State Road Transport Corporation with the performance of APSRTC ?

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22. 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 23. `Jithe Rasta, tithe ST' 24. Better vehicle utilization boosts APSRTC profit Surplus land to be used to develop commuter amenity centers having an 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. losses to the tune of Rs 1331.26 crores in Performance of MSRTC and APSRTC 25. Thank You

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