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Customer Relationship Management : A Case Study of Andhra Pradesh State Road Transport Corporation. Presented by :. Background. APSRTC was setup on November 1,1958. Occupies prime position among all the passenger road transport

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Customer Relationship Management :

A Case Study of Andhra Pradesh State

Road Transport Corporation

Presented by :


  • 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.


  • 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.

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



  • Levers

  • Occupancy Ratio - Operating staff

  • Gross income - External Relationship management

  • Other income


  • An effectiveCustomer 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.

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 ?

  • 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.

The most important aspect of the problem is the – the

‘’Problem Identification itself ‘’

  • Management & Employees don’t 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.

Q2. How would you go about Implementing the various the

Steps in the CRM Program ,in the order of

Importance / Priority ?

  • 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.

  • Implementing the various Steps in the CRM Program in the order of Importance / Priority.

  • Execute strategies to retain existing customers 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.

Q3. What steps would you recommend to APSRTC, order of Importance / Priority.

to reduce Expenditure and Cost ?

Recommendations to reduce Expenditure and Cost order of Importance / Priority.


  • 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.

Recommendations to reduce Expenditure and Cost order of Importance / Priority.

  • 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.

Q4. What steps would you recommend to APSRTC , to order of Importance / Priority.

increase the revenue ?

Recommendations to Increase Revenue order of Importance / Priority.

  • 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 tickets,

  • frequency of buses & convenient timings.

Recommendations to Increase Revenue order of Importance / Priority.

  • Treating advertisers as privileged customers – exploit

  • various advertising options.

  • Improving aesthetics of bus stops & installing ‘Instant snack

  • machines’ at key areas.

APSRTC should therefore provide a comfortable travel

experience to its customers which will result in more customers

using state transport and thereby increasing revenues.

Q5. What actions APSRTC should take to improve the order of Importance / Priority.

Quality of Service to passenger’s perceptions as

collected during Survey conducted by Institute of

Public Enterprise 2001 ?

  • According to Survey conducted by Institute of order of Importance / Priority.

  • 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.

Improvement in Quality of Services order of Importance / Priority.

  • Reliability : Punctuality & maintaining schedules as per customer’s 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.

Q6. Compare briefly the Performance of Maharashtra State order of Importance / Priority.

Road Transport Corporation with the performance of


MSRTC order of Importance / Priority.

  • 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

`Jithe Rasta, tithe ST' order of Importance / Priority.

losses to the tune of order of Importance / Priority.

Performance of MSRTC and APSRTC

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.

Rs 1331.26 crores in

Thank You order of Importance / Priority.