Through a combination of data analysis, optimisation and word-of-mouth marketing, private hire taxi firm Addison Lee is on track to take the business beyond its London heartland.
Following the £30m acquisition of executive car service Tristar International in June, the company is eyeing expansion across the US, Asia and Europe, with a particular focus on the US and the UK. The business has a stable base for success. For the year ending 31 August 2015, Addison Lee’s turnover reached £197m, with a gross profit at £68.5m.
Originally considered more of a business-to-business company, Addison Lee is also increasing the consumer side of its business. Half of trade now goes through its app, which was launched in 2009, while a quarter of traffic is being driven through the web.
Knowing when to personalise
The company’s focus is now on ‘micro marketing’ using its rich social and geo-locational data to create personalised customer experiences. The data is used to offer personalised deals via email or text based on previous journey behaviour.
“I’m keen to turn on more push. We have also got messaging in the app and one of the technical challenges that we face is how we get all that together in one messaging platform, which is why we chose the [Salesforce] marketing cloud,” says chief commercial officer Peter Boucher, one of Marketing Week’s 2016 Vision 100 inductees.
“However, you then need to have a really fast operational database. Decisions need to be made as soon as you hit the interface, which is not easy. And to be blunt I don’t think Uber’s got it right either, [in terms of that ability] to make marketing decisions on the fly like that.”
“Uber has built its brand through a lot of controversy, but also through a lot of referrals and word of mouth.”
Peter Boucher, Addison Lee
Boucher puts the business just a few months away from real-time programmatic marketing, having already implemented 250 ‘marketing automations’ reflecting different customer journeys based on trends and behaviours. However, he admits the company is not yet at the stage where if a customer comes in, a machine automatically knows what to do.
“You have to work out which five or six journeys you really want to optimise. All of this automation and the possibilities are great, but they will probably end up with half a dozen killer use cases,” says Boucher.
Expanding out of London
Having invested heavily in its core London operation over the past two years, Addison Lee wants to replicate its model in key business destinations across the UK. The business benefits from having a vertical supply chain, starting with the buying of cars and driver selection, to driver training and the London-based control room, which manages its 5,000 strong fleet using a bespoke system.
In September, Addison Lee will open its first wholly-owned branch in Manchester. While the plan is to leverage the capabilities of its London business, training and driver recruitment will take place locally. From there Addison Lee will fill in its coverage by working with vetted fleets in smaller cities such as Cambridge. Customers will order through the Addison Lee app, but be served by the partner fleet.
To build awareness in these new locations Boucher believes the best advert is word of mouth. “If we need to do some stuff above the line we will, but you do that once you have got the customer experience really flowing.
“If you look at how Uber has built its brand, yes through a lot of controversy, but also through a lot of referrals and word of mouth. Not TV advertising or big above the line,” he adds.
To help drive data collection and a single customer view, Addison Lee introduced Club Lee in 2015, a loyalty scheme where customers can gather points regardless of whether they book on account, cash or card. With hundreds of thousands of members signed up so far, the scheme has fast become a large part of the business.
Whereas historically Addison Lee classed customers by account, it now looks at the passenger, so if a customer appears in other channels they can be identified.
It is this focus on data that means marketers need to be data savvy and possess the insight to question data thoroughly, says Boucher. “Marketers need to be data literate and ask the right questions, but equally they need to be sufficiently creative so they can put the campaign together and have the patience to optimise the living daylights out of it.
“The skill now is the ability to execute at a micro-level. When I first started, it was a TV campaign, on-shelf advertising – quite broad brush. Now we have various tests on our website and we are eking out 1% gains left, right and centre, so you have got to have the patience to really think through the data side.”
Avoiding ‘vanity marketing’
Although the company sometimes works with influencers, Boucher is keen not to fall into the trap of what he terms ‘vanity marketing’. He argues any influencer activity needs to have integrity and it is essential to stick to your principles as the days of buying an influencer and getting them to tweet on your behalf are long gone.
Next year, Addison Lee will explore experiential marketing, but only in a way that creates enough visibility to have an impact on the brand.
“If we can find the right customer segment at the right time with the right level of creativity, we will do it. What you try to avoid is just handing out leaflets for the sake of it. I see a lot bad experiential and you can waste a lot of money on it. But when you see the good stuff you think, okay I’ve got it.”