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Pricing and selling powered by Behavioral Economics

Smart portfolio management increases user financing in public transport

Case study public transport — how to improve your subscription rate through smart portfolio management and thus increase your user financing.

Subscribers in the public transport sector are particularly loyal, have a high level of confidence in public transport, and are also much less price critical than other customer groups. In short: They are your best customer group. Therefore, a higher subscription rate in the public transport sector is absolutely desirable.

Nevertheless, the subscription rate stagnates for many transport companies, and even frequent travelers prefer to combine their tickets using season and individual tickets. In a representative study, we were able to prove that the public transport usage profile of frequent travelers without a subscription is very similar to that of actual subscribers.

So why are subscription models less attractive to some customers?


The status quo of public transport companies

For most transport companies, the subscription model is not differentiated by performance or service components, i.e., there are no tiered products in the sense of an S-M-L logic similar to those used in many other areas. This means that the offered services are not (yet) based on people’s actual decision-making behavior, and instead present the customer with a 1/0 decision, which makes positive decision-making more difficult.

And if there is one thing we can assure you of, from our many years of experience in price and sales consulting, it is the following:


People avoid making decisions wherever possible because decisions are exhausting and always carry the risk of making mistakes.


Make the decision instead of letting the decision be made!

It is not only about WHAT you sell to your customers, but mainly about HOW. In other words: how do you have to present your product in the buying process for customers to make them decide the way you want them to?

From a behavioral economics point of view, it is essential that you, first of all, know the actual decision-making behavior of your customers to be able to take it into account accordingly in the next step when designing your offer. So how can you build up your subscription portfolio to convince those frequent travelers who have not yet subscribed to one of your subscription offers? This is where Behavioral Economics can help:

  • Relevance of service elements: First, clarify which product features are essential decision factors for your customers when choosing a subscription. Based on this, you can then put together optimized subscription bundles and derive your portfolio.
  • Simplification of the decision-making process: More product benefits for the same price are not necessarily better; sometimes, less is more because the consumer cannot lose orientation in the portfolio. Avoid using too many and barely distinguishable offers. You don’t want the potential customer to decide not to subscribe to any of the subscriptions because he can no longer clearly differentiate between options.
  • Optimization of the ordering process: You can also use Behavioral Economics elements in the ordering process to support your (potential) customers in their decision making. For example, small tricks in the presentation of subscription options can make a big difference and help your customers to make a decision.

In practice, we showed: A subscription portfolio developed from a behavioral economics perspective enhances the attractiveness of the subscription, increases the subscription rate, and generates significant additional revenues.

Moreover, a differentiated subscription portfolio based on customer needs can be expanded with easily distinguishable products, for example, towards a mobility flat rate. Besides, it allows the alternative forms of operation to be optimally integrated.

Do you have any questions about the possibilities for increasing user financing and customer orientation through a differentiated subscription portfolio, or would you like to be included in our public transport newsletter? Then please contact us here.

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