(03 Oct 2018, 3:21 pm)Tamesider wrote So much for the "evils of cross-subsidy"! 

In the short-term, this strategy didn't cost the Operator too much. The whole point being that those without cars are "Captive". Therefore, they have to use the increasingly expensive, reduced services run by older buses, so the profits will probably grow to start with. However, there has to be a breaking point where younger passengers in particular say enough is enough and there are now signs it is happening. They will re-double efforts to raise the cost of driving lessons and a car - or simply "obtain" cars and drive without following shall we say "legal niceties". Meanwhile, uber, gett, wambamm are waiting to pounce. After all, there must be a reason why taxi fare comparison websites quote journeys from BUS STOPS, rather than the exact location you want to take a cab from. Of course, once these multi billion gig economy companies have wiped out the commercial bus industry in poor areas, taxi fares will rocket.
It is also risky in Stagecoach's case because they are prioritising trendy, politically correct areas (Chorlton, Didsbury, Withington, Trafford etc) populated by "sheeple" environmentalists who don't want buses per se. Unlike the canny people of Leigh and Tyldesley who thought "Yes, we would prefer Light Rail, but now we've got a luxurious Euro6 Guided Bus charging the same for a 25 mile round trip as Stagecoach charge for a 3 mile round trip on a threadbare Euro4 in the eastern quadrant of GM, we'll at least give it a try".

OTOH, could the fact that Go-Ahead are emphasising a "national" strategy, just be code to bypass local authorities, especially those considering Franchising? We know in GM that Grayling wants to overrule the Devolution deal set up by George Osborne so maybe GA want to do the same in the North East and anywhere else considering Devolution via an Elected Mayor.

There are some figures kicking around which refer to the costs in keeping a customer happy vs the costs in attracting new customers.
I'm guessing those costs vary, depending on the sector involved, but it does make me wonder why bus operators do what they do.

It goes without saying that there will be customers leaving an operator for various reasons that have nothing to do with prices or other operational reasons.
However if operators are looking at the churn rate and reasons why customers have stopped using services, then potentially it will be too late and too costly to get them back on-board.
Operators could have failed the customer in a variety of ways, but they need to find out why and do something positive about it. 

A well known 'celibate' train operator on the WC and formerly EC, had a marketing strategy which focused on growing the younger demographic. TV adverts and on/offline marketing used phrases, images and terminology which appealed to that younger market. 
Feedback was recieved, that it was alienating the established business market, typically made up of passengers 35+.
Operational decisions also alienated regular travellers on the EC, with the new rewards programme poorer than the previous one, staffing levels dropping and the food/drink offering not being as reliable or refined as previously. 
I don't have figures to hand to compare and contrast, but it would be interesting to see if those operational decisions and that marketing strategy had any impact on the business not succeeding as planned and Grayling taking it back 'in-house'. 



Your own comments regarding Grayling is an interesting one. 
Could be something in it and I wouldn't be surprised if there was.