North Yorkshire Moors Railway General Discussion

I'm been thinking about this argument overnight - specifically, the impact of members on a railway's bottom line. This is based around a model in which members get a discount on tickets (typically 50% or thereabouts), which they can use an unlimited number of times - this is the Bluebell model, and I assume from the above also the NYMR model.

Frequently, the argument is framed in terms of how much the host railway "loses" by selling a member ticket at a discount. If my normal fare is £30 and members go for £15, the railway "loses" £15 every time they travel. But that presupposes that they would have inevitably made the journey at full fare, and that is far from certain: the reduced price must be an incentive that leads to extra travel. So it is more realistic to say that every time a member travels, you "gain" £15 in revenue, at which point - the more times a member travels, the better.

That is particularly the case because the marginal cost of offering that member benefit is near zero: better to get £15 because a member has been enticed to travel at a discount than £0.

The objective of any pricing discussion is where to set prices so as to maximise the overall revenue without driving real additional costs to do so. If you put on an extra train to tap into a particular market - that is additional real cost. It may nonetheless be worthwhile, but has to be considered carefully. But if you are simply filling seats on a service that is already running, then revenue maximisation is worthwhile.

Often this debate about member discounts seems to get framed in terms of a loss: "how much revenue do we lose by offering a member discount?" and then using that to portray members as an expense. (I believe at one point the WSR was charging the WSRA on a pound-for-pound basis for every member who travelled at a discount: pure madness when viewed at a whole-railway level). I think it is a lot more healthy to frame the ticket price in terms of income: "how much additional income do we make at marginal cost by offering an attractive member benefits package?" The framing of the question matters.

Tom

 

What about insurance? Who covers you in case of an accident?

 

As long as you are a member of arecognised affiliated group, LNERCA or NELPG for example, are covered by the railways insurance.

 

I was a member and would make extra repeat travelling visits to get the value out of it. It meant an affordable day out. Had I not been a member I would've made one travelling visit per year.
The railway had four or five additional trips at half price from me. And they had my membership fee.

 

But if someone makes one trip and spends loads in the giftshop, the railway makes more profit out of that one trip than your 5 trips.

This is obviously complicated by fixed base costs, elasticity of demand future value of money etc, but the fundamental point (from a pure profit and loss point of view) is that your 5 visits may be less beneficial to the railway than 1 visit by a family who call every engine "the flying scotsman" and wonder where the steering wheel is.

(This is why I would love to interrogate Tom's dataset on membership costs)

 

I think there is a flawed argument there, because you have assumed someone visiting once at full price also makes secondary spend, but someone making five half-price trips does not. They may also make secondary spend (and have five times more opportunity to do so).

The other significant point is that provided the railway can carry the half-price visitor without adding additional carriages etc, the marginal cost of doing so is near zero, so the impact of that half fare is directly on the bottom line. Whereas secondary spend always has a margin. I think there were figures in the latest Bluebell accounts that put shop sales at something like 30% (if I read it right). So to have the same impact on the bottom line as 5 * £15 ticket, the visitor buying one £30 ticket has to spend something like £150 of secondary spend to make up the £45 shortfall - highly improbable.

And that’s before you consider the raw income from the membership subscription.

Tom

 

For those missing the contributions from Lineclear, they’ve been quite prolific on the WSR re NYMR very recently, starting here …….

West Somerset Railway General Discussion

 

Interesting, I thought I had read you don't need to be a member full stop (as of June 2025?).

 

Quite, it's this line of thinking that ends up with accusations of calling shareholders/members freeloaders.
A dangerous line of thinking.

 

.... and it is clear that @Lineisclear believes that line of thinking, and so seems determine to drive the WSR down that path (although ~I'm sure he has a willing accomplice in the shape of the WSR Chairman, past on past actions).

 

KWVR membership is £45 for an adult for the year which includes 3 day rovers, half price on other running days, and discounts on galas and events. A day rover is £24. I've had membership there in the past and used the three tickets in a year, and because those visits are "free" in that I've not had to pay for them on the day, I've spent more on food, drink and souvenirs than I would if I was visiting once and buying a ticket.

If I visited once, I'd probably spend about £40. But by visiting three times to use the tickets, I'll have probably spent about £150 (including the membership fee). Yes, the cost of providing membership needs to come out of that, but if I'm paying £24 for a travel ticket, I'm less likely to pay £35 for a book in the shop, or £15 for lunch when I can get a sandwich for 4 quid. Once you've spent that initial outlay on membership, you almost feel obligated to visit more often and to spend more money at the railway to compensate for not buying a ticket on each visit.

It's the same with the English Heritage and National Trust memberships we have. If we had to pay an entry fee every time, I doubt we'd visit more than a couple a year. But because the membership is a monthly direct debit for a few quid, instead it's probably closer to 20 visits annually, and a lot of secondary spend in gift shops, cafes, plant shops, secondhand bookshops, etc. The sites are open whether we visit or not, so it's all extra income.

 

Well, no, as I flagged most of that up, and why I said it on a pure p&l basis. I agree that to look at it on that basis alone would be flawed.

I think the key is that both sides understand the transaction. "Getting value" out of membership for the individual is at risk of diluting the value to the railway.
Clearly, at most times the capacity is there, but look at, say Lords on an ashes test day, the members stand is often half-full when the rest of the ground isn't. But, to get MCC membership is eye-wateringly expensive and/or given to extend the soft power of the MCC and cricket in general - ie that is factored in.

In terms of secondary spend, I'd want to see some research on this. From a pure anecdata point of view, if I'm going with the family to a preserved line, my wallet gets rinsed. If I'm on my own, less so. Depending where the mark-up is, 5 cups of tea in a year may bring inless than 1 set of lunches, a fridge magnet, a driver's hat and a packet of sweets.

That may give a different answer to the farebox numbers.

If I were in control, of course I'd still offer membership with perks, but I'd try to shape them to bring more custom to the shoulder season.

It's a version of Keynes' parable on thrift, the better you do personally out of the deal, the worse the railway you seek to support does.

 

And it's this line of thinking that can end up with a railway shovelling benefits out of the window and not knowing where it's profitable revenue stream has gone.

 

I think that some people haven't fully absorbed the point of the aphorism you quoted a few days back, 'the plural of anecdote is not data'. That Kelvin quotation I repeated recently ("When you can measure what you are speaking about, and express it in numbers, you know something about it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind") makes the same point, fundamentally.

The form you gave was common, early on, among the people who built the Internet. I see from Quote Investigator (a truly wonderful resource) that it predates us, though: Quote Origin: The Plural of Anecdote Is Not Data.

Noel

 

I think you have that totally spot on Tom.
Taking the NYMR as a line with a high end fare 4 trips costing £100 over the year seems a far better deal than 2 at £100, which may actually end up as only one anyway due to the high cost of the one off fare.

It is really a far better way than the point I was badly making when mentioning TFL and the Freedom pass in that it does not always cost money and hence you are not losing anything.

I have heard the argument about lost revenue on airline staff travel, but again, unless it is some long service concession, people only travel if there is space and pay around 10% to cover the extra fuel burn, meals etc. Of course on the railway especially at 25mph the extra fuel costs would be unquantifiable I suspect, even if they were measurable in the first place.

Personally when the Bluebell was my go to line I would be quite likely (as I did quite often) have a random one off ride at 50% if I was there for photography, which I would not have done at full fare.

 

FWIW I have several membership with varying benefits. Some are historical, some are required for volunteering. None are within easy reach and the two I would possibly make use of are well over 100 miles away, so unless we are holidaying in the area we never make a day visit just to grab a free ride.

I suspect I am far from alone in this respect, being both distant and not entirely a free agent.

So yes, those who live locally, or are free to spend their time and money travelling long distances may take full advantage of any benefits, but it would be interesting to know the typical breakdown of the membership profile if there are any mem secs on here?

 

All this recent discussion centres on the potential financial value to both parties but of course the benefits to the railway, in particular, potentially come from more broad ranging support such as donations and legacies, the latter, in particular, I suspect are far more likely to come from members rather than the general public. The general public are far more like to make a donation via collection box than they are to post in a substantial cheque (or its modern day equivalent). It seems blindingly obvious to me, as a layman, but seems completely beyond the comprehension of the likes of @Lineisclear and the senior management team. The SMT should have the data to confirm or deny this, but getting them to part with the information will be a lot harder than trying to squeeze blood from a stone.

 

Excuse my maths. I think I need to show my working:

£35 - membership fee
£20 - 1st visit
£100 - 5 further visits
£60 - For food and drinks on average

A total of £205

Without membership
One visit
£40 - ticket
£10 - food and drink

Total £50

 

That's fine IF the membership fee and/or other income such as legacies goes direct to the railway. However if there are two separate organisations, one of which collects the membership and historically the legacies and the other gives the benefits, then this is only beneficial if both orgainisations are aligned. If they are not, then that is where problems arise. Go 'over the hill'

 

And that's the problem with lines with a myriad of support organisations (how many different groups are involved with WSR for example?). In some ways though it can work out better.

It's a psychological thing - if you have a high up front cost, you want to redeem your benefits as much as possible afterwards, hence several visits to recoup the initial outlay. To get it reasonably back on track with regards the NYMR, say I become a member of the trust for £150 per year which includes free travel. That money goes straight to the trust. Anything else I spend on the railway goes to the PLC. If I make four visits, I might spend another £150 in those visits in the shops and cafes, all money to the PLC. The "railway" now have £300 out of me because I've managed to spread the costs over say 6 months. But if I only visited a couple of times per year, then I'd buy day tickets and not spend anywhere near as much on the day, so the railway might only get £130 out of me overall.

There's so many permutations of options that there'll never be a one size fits all approach to it, but whichever way you look at it, membership should be encouraged and seen as a benefit to the railway, not a burden.

The cheapest membership for the NYMR is vastly overpriced for the benefits it offers to members (same as other railways but twice the price) so I can't see much uptake for it. The middle tier, however - basically an annual pass for £150 - is a bargain, even more so if you're local.