Want FREE Templates on Organization, Change, & Culture? Download our FREE compilation of 50+ slides. This is an exclusive promotion being run on LinkedIn.

Flevy Management Insights Case Study
Customer Experience Strategy for Urban Transit Company

There are countless scenarios that require Design Thinking. Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Design Thinking to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, best practices, and other tools developed from past client work. Let us analyze the following scenario.

Reading time: 9 minutes

Consider this scenario: A leading urban transit company is at a crossroads, needing to integrate design thinking into its operations to overcome a stagnating ridership growth and customer satisfaction.

The organization faces a 20% decline in ridership due to increased competition from ride-sharing services and a growing public preference for alternative transportation methods. Additionally, internal challenges such as aging infrastructure and a lack of digital innovation have further hampered its ability to meet modern commuter expectations. The primary strategic objective of the organization is to transform its customer experience, leveraging technology and design thinking to regain ridership and improve satisfaction levels.

The urban transit company is witnessing a pivotal moment in its history, marked by declining ridership and customer satisfaction. A closer examination reveals that the core issue may be the company's slow response to digital transformation and customer-centric innovation. This inertia has not only limited its competitiveness but also its ability to adapt to the evolving urban mobility landscape. The leadership is now poised to pivot, acknowledging that a renewed focus on customer experience, underpinned by design thinking and digital innovation, is imperative for future growth.

Environmental Assessment

The transit and ground passenger transportation industry is undergoing significant shifts, influenced by technological advancements and changing consumer behaviors. The rise of on-demand mobility services has introduced a new level of competition, compelling traditional transit companies to rethink their value propositions.

Our analysis of the competitive landscape highlights several key forces:

  • Internal Rivalry: High, due to the increasing number of ride-sharing services and other non-traditional mobility solutions.
  • Supplier Power: Moderate, with a limited number of vehicle and technology suppliers catering to the industry.
  • Buyer Power: High, as consumers have more transportation options than ever before, each offering varying levels of convenience, price, and service quality.
  • Threat of New Entrants: High, facilitated by the low barrier to entry for app-based transportation services.
  • Threat of Substitutes: High, with consumers opting for ride-sharing, biking, walking, or even remote work arrangements over traditional public transit.

The industry is witnessing several emergent trends, including the integration of smart technology in transit systems, a shift towards sustainable transportation solutions, and an increasing demand for personalized passenger experiences. These trends signal major changes in industry dynamics, presenting both opportunities and risks:

  • Adoption of Smart Technology: Offers the opportunity to enhance operational efficiency and customer satisfaction but requires significant upfront investment in digital infrastructure.
  • Shift towards Sustainability: Presents an opportunity to attract environmentally conscious consumers but challenges companies to overhaul their fleets and operations to meet green standards.
  • Increasing Demand for Personalization: Enables companies to differentiate their services but necessitates the collection and analysis of large volumes of customer data, raising privacy concerns.

Our STEEPLE analysis indicates that technological, environmental, and legal factors are particularly influential, driving the need for digital innovation, sustainable practices, and compliance with evolving regulatory standards.

Learn more about Value Proposition Customer Satisfaction Consumer Behavior

For a deeper analysis, take a look at these Environmental Assessment best practices:

Market Entry Strategy Toolkit (109-slide PowerPoint deck)
Strategic Foresight and Uncertainty (51-slide PowerPoint deck)
VUCA (Volatile, Uncertain, Complex, Ambiguous) (26-slide PowerPoint deck)
Strategic Analysis Model (Excel workbook)
Consolidation-Endgame Curve Framework (29-slide PowerPoint deck)
View additional Design Thinking best practices

Are you familiar with Flevy? We are you shortcut to immediate value.
Flevy provides business best practices—the same as those produced by top-tier consulting firms and used by Fortune 100 companies. Our best practice business frameworks, financial models, and templates are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience.

Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
AT&T GE Cisco Intel IBM Coke Dell Toyota HP Nike Samsung Microsoft Astrazeneca JP Morgan KPMG Walgreens Walmart 3M Kaiser Oracle SAP Google E&Y Volvo Bosch Merck Fedex Shell Amgen Eli Lilly Roche AIG Abbott Amazon PwC T-Mobile Broadcom Bayer Pearson Titleist ConEd Pfizer NTT Data Schwab

Internal Assessment

The organization's internal capabilities are a mixed bag, with a strong commitment to public service and community impact but lagging in technological adoption and customer experience innovation.

A MOST Analysis reveals that the organization's mission to provide accessible, reliable, and affordable transportation is at odds with its outdated operational and customer service practices. Its objectives of increasing ridership and customer satisfaction require a fundamental shift in strategy towards customer-centricity and digital innovation.

The Core Competencies Analysis highlights the company's extensive knowledge of local transit needs and its comprehensive network coverage as key strengths. However, it lacks in areas such as customer data analytics and digital service delivery, which are critical for enhancing customer experience in today's technology-driven environment.

The Distinctive Capabilities Analysis underscores the need for the company to develop capabilities in leveraging technology for service innovation, such as real-time tracking, mobile ticketing, and personalized communication, to remain competitive and relevant.

Learn more about Customer Service Customer Experience Core Competencies

Strategic Initiatives

  • Implement a Design Thinking Approach to Service Design: This initiative aims to place passengers at the heart of service development, using design thinking to innovate and improve the end-to-end customer journey. The impact will be a more intuitive, convenient, and enjoyable transit experience, leading to increased ridership and customer loyalty. This approach will involve cross-functional teams and require resources in design thinking training and customer research.
  • Digital Transformation of Customer Interfaces: By introducing user-friendly digital tools for ticketing, scheduling, and feedback, the company can significantly enhance customer interactions and satisfaction. The value lies in creating a seamless, integrated experience for riders, expected to increase usage and positive perceptions of the transit system. This will require investment in technology development and digital marketing.
  • Sustainability Initiative: Transitioning to a greener fleet and promoting eco-friendly transportation options will not only reduce environmental impact but also appeal to the growing segment of environmentally conscious commuters. This initiative's value creation lies in differentiating the company as a leader in sustainable urban transit. The initiative will demand resources for new vehicles, eco-friendly technologies, and sustainability marketing.

Learn more about Design Thinking Service Design Customer Loyalty

Design Thinking Implementation KPIs

KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.

You can't control what you can't measure.
     – Tom DeMarco

  • Ridership Growth Rate: Essential for measuring the success of customer experience improvements and digital transformation efforts.
  • Customer Satisfaction Scores: A direct indicator of how well the new design thinking strategies are resonating with passengers.
  • Digital Adoption Rate: Critical for assessing the effectiveness of the new digital tools in enhancing the customer experience.

These KPIs will provide insights into the effectiveness of strategic initiatives, helping the company to iterate and refine its approach for continuous improvement in customer satisfaction and operational efficiency.

For more KPIs, take a look at the Flevy KPI Library, one of the most comprehensive databases of KPIs available. Having a centralized library of KPIs saves you significant time and effort in researching and developing metrics, allowing you to focus more on analysis, implementation of strategies, and other more value-added activities.

Learn more about Flevy KPI Library KPI Management Performance Management Balanced Scorecard

Design Thinking Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in Design Thinking. These resources below were developed by management consulting firms and Design Thinking subject matter experts.

Design Thinking Deliverables

These are a selection of deliverables across all the strategic initiatives.

  • Customer Journey Mapping Report (PPT)
  • Digital Transformation Roadmap (PPT)
  • Sustainability Impact Model (Excel)
  • Customer Satisfaction Survey Results Analysis (PPT)

Explore more Design Thinking deliverables

Implement a Design Thinking Approach to Service Design

The team utilized the Double Diamond framework, a model that divides the design process into four distinct phases: Discover, Define, Develop, and Deliver. This framework was chosen for its emphasis on understanding the problem from the user's perspective, which is central to design thinking. It facilitated a structured approach to innovating the customer journey, ensuring that solutions were both creative and grounded in real user needs. The process undertaken by the organization included:

  • Conducting extensive field research to discover the current pain points and needs of transit users.
  • Defining the key areas for improvement in the customer journey based on research findings.
  • Developing a range of solutions through brainstorming sessions and rapid prototyping.
  • Delivering the most promising solutions through pilot programs, followed by full-scale implementation.

The application of the Double Diamond framework led to the successful redesign of the customer experience, resulting in a more intuitive and satisfying journey for transit users. This initiative saw a notable increase in customer satisfaction scores and a positive shift in ridership numbers, affirming the value of a design thinking approach to service design.

Learn more about Customer Journey

Digital Transformation of Customer Interfaces

For this initiative, the Value Proposition Canvas (VPC) was instrumental in aligning the digital offerings with customer needs and expectations. The VPC, a tool that focuses on ensuring products and services fit the jobs, pains, and gains of customers, was pivotal for this digital transformation. It enabled the organization to deeply understand and address the specific desires of transit users in the digital realm. Following the VPC, the team:

  • Mapped out the jobs transit users were trying to accomplish using digital tools, identifying key pain points and gain creators in the process.
  • Designed digital features that directly addressed these jobs, pains, and gains, ensuring that each new tool offered clear value to the users.
  • Iteratively tested these digital solutions with a small user group before a wider rollout, ensuring feedback was incorporated into the final designs.

Implementing the VPC framework enabled the organization to launch a suite of digital tools that were highly aligned with user needs, leading to a rapid uptake of these tools by the transit community. The digital transformation initiative significantly enhanced the overall customer experience, as evidenced by increased digital engagement metrics and positive user feedback.

Learn more about Digital Transformation

Sustainability Initiative

The team employed the Triple Bottom Line (TBL) framework to ensure that the sustainability initiative delivered environmental, social, and economic value. The TBL framework, which encourages organizations to go beyond traditional financial metrics and also consider ecological and social dimensions, was crucial for developing a comprehensive approach to sustainability. This framework guided the organization in:

  • Assessing the environmental impact of current operations and identifying areas for improvement, such as reducing emissions and waste.
  • Evaluating the social implications of the sustainability initiative, including community benefits and employee welfare.
  • Calculating the long-term economic benefits of a greener fleet and operations, including cost savings and potential for increased ridership.

The adoption of the TBL framework ensured that the sustainability initiative was not only environmentally responsible but also socially beneficial and economically viable. This holistic approach led to significant improvements in the company's environmental footprint, enhanced community relations, and a positive impact on the bottom line, demonstrating the effectiveness of integrating sustainability into the core business strategy.

Additional Resources Relevant to Design Thinking

Here are additional best practices relevant to Design Thinking from the Flevy Marketplace.

Did you know?
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.

Key Findings and Results

Here is a summary of the key results of this case study:

  • Customer satisfaction scores increased by 15% following the implementation of design thinking in service design.
  • Ridership grew by 8% year-over-year, reversing the previous decline.
  • Digital adoption rate surged by 25%, indicating strong user engagement with new digital tools.
  • Environmental footprint reduced by 20% through the sustainability initiative, surpassing initial targets.
  • Community relations improved, evidenced by a 30% increase in positive social media mentions regarding sustainability efforts.

The strategic initiatives undertaken by the urban transit company have yielded significant positive outcomes, particularly in customer satisfaction and ridership growth. The increase in customer satisfaction scores and ridership growth are direct reflections of the successful implementation of design thinking and digital transformation efforts. These results underscore the importance of placing the customer at the center of service design and the value of digital engagement tools in enhancing the customer experience. However, while the digital adoption rate shows promising progress, it also highlights an area for further improvement, suggesting that not all segments of the target audience have been fully reached or convinced by the new digital offerings. Additionally, the environmental and community impact results, though impressive, suggest a need for ongoing effort to maintain and build upon these gains. Alternative strategies, such as more aggressive digital literacy programs and partnerships with tech companies, could further enhance outcomes and ensure broader adoption and engagement.

Given the positive trajectory initiated by these strategic initiatives, the next steps should focus on consolidating gains while addressing areas of underperformance. Recommendations include doubling down on digital literacy and engagement efforts to increase digital adoption rates across all user demographics. Expanding partnerships with technology and sustainability-focused organizations could also inject fresh perspectives and innovations into the company's strategy. Finally, continuous monitoring and adaptation of the initiatives based on real-time data and feedback will be crucial in sustaining momentum and ensuring the long-term success of the transformation efforts.

Source: Customer Experience Strategy for Urban Transit Company, Flevy Management Insights, 2024

Flevy is the world's largest knowledge base of best practices.

Leverage the Experience of Experts.

Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.

Download Immediately and Use.

Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.

Save Time, Effort, and Money.

Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.

Read Customer Testimonials

Additional Flevy Management Insights

Download our FREE Strategy & Transformation Framework Templates

Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S Strategy Model, Balanced Scorecard, Disruptive Innovation, BCG Experience Curve, and many more.