Cover Image

Not for Sale



View/Hide Left Panel
Click for next page ( 104


The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 103
[trap ter 5 Pace [age Study = The Pace case study is an example of a transit authority that is approaching marketing, particularly marketing to business, much as would be done in the private sector. Like most transit agencies in the United States, Pace operates in a very difficult and competitive environment, with the dispersal of travel tending to lower transit mode share. To combat these declines, Pace has undertaken a number of initiatives to target this prime transit market. First, Pace has refocused on the customer. To accomplish this, Pace has developed an overall vision and strategic plan, and has developed a comprehensive operating plan and annual marketing plans which support the more customer-focused strategic vision. Before finalizing these new visions and plans, Pace conducted significant market research. Information from this research allowed Pace to better understand the different needs of the market segment it serves. This customer research also informed later efforts to develop more responsive transportation service. In order to address the needs of area commuters, Pace has chosen to focus many of its marketing efforts on employers. The Marketing and Development Group, which was set up specifically for this purpose, works closely with area employers in order to identify their transportation needs and to clevelop solutions. The group uses a range of strategies to reach this market, including extensive use of market research data, personal contact, direct mail, and promotional materials (including videos). The Vanpoo} Incentive Program, in particular, uses several approaches to build loyalty among vanpoo! members, including a newsletter, annual brunch and awards ceremony, and longevity '''1 ~ ~ W! ~,'~ bonuses. ' Page 5-1

OCR for page 103
PaeB GS88 SONY . Just as important, Pace managers have worked to create a business culture within their organization. Marketing and Development staff members treat area businesses as clients and work to address their specific transportation needs. In doing so, Pace has introduced support services that are unusual at transit agencies, including the practice of billing vanpoo] clients directly. When market research showed shifts in commuting patterns from Pace's traditional suburb-to- city market to the city-to-suburb and suburb-to-suburb travel, Pace developed new types of services tailored to these growing markets, including vanpools and subscription buses. This approach has allowed Pace to work effectively with area employers and to meet the changing needs of the growing suburban commuting market. A key test of Pace's approach to marketing was its effort to provide transportation services to Sears, which relocated from the Sears Tower in downtown Chicago to the Prairie Stone development in the suburban community of Hoffman Estates, an area without transit service. It provided a set of services to Sears, including employee surveys, vanpoo] services, and special shuttle services. The result after five years of effort is a transit service program that includes 3 Pace fixed-route bus lines, ~ subscription buses, 50 Pace vanpools, and a Guaranteed Ride Home program. Currently, nearly 40 percent of Sears employees at the Prairie Stone site use some form of ridesharing. I=E Pace is a public transit service provider in suburban Chicago. Created in 1983 as the Suburban Bus Division of the Regional Transportation Authority (RTA), Pace is charged with administering and providing all non-rai] mass transit services in Cook, DuPage, Kane, Lake, McHenry, and Will Counties in northern TIlinois. The RTA also oversees the Chicago Transit Authority (CTA) and Metra commuter raid service. Pace is governed by a 1 2-member Board of Directors comprising current and former suburban village presidents and city mayors. Pace offers the following services: Feed ~ bug. Pace provides 141 regular route, 82 feeder routes, 10 subscription services, and two seasonal routes. Monthly ridership was 2.9 million in 1995. DbLa~. Pace provides curb-to-curb service to ~ 13,000 riders each month; the majority of these passengers are elderly or have disabilities. ADA prawns Pace contracts with six operators to serve 2S,600 ADA- eligible riders each month. P998~2

OCR for page 103
Pace e~s~ - - tanpoo '. Pace operates a fleet of more than 250 vanpools through its Vanpoo} Incentive Program (V1P). Average daily ridership is snore than 47OOO. The Pace service area is 3,446 square miles and incorporates 267 municipalities. In 1995, annual ridership was 37.2 million, and Pace provided 34 million vehicle unites of service. Figures S- ~ and 5-2 show annual ridership and vehicle miles for ~ 987 through ~ 996. Figure 5- l: Page Annual Ridership 41 ~ 40 o 39 - - 38 E ~ 37 cat 36 35 to ,~ 34 33 1 ~1 rot ~ ~ 0 ~ Cal Cal ~ ~ oo oo oo cs, a> cot ~ on ~a, a, cn - Fi~ur0 5- 2: Pae. Annual V0hiel0 Mil~s of S0rvie' 40 35 30 25 ~ 20 15 ~O ~CO ~US CD oo cn ~cs, ~cut cut ~cs, Paq053

OCR for page 103
Paesea~S~ The cash adult fare is $~.15, witty express routes ranging from $1.35 to $3.90. Dial-a-ride service is $~.30, and ADA paratransit service is $1.50 (but an increase to $2.00 is proposed). A monthly pass, which is good on both Pace and CTA, is $~.00. Throughout the l980s, the City of Chicago lost population and employment to the surrounding suburbs. Between 1980 and 1990, the suburban population increased 9.3 percent, to 4.5 million, while Chicago lost 7.3 percent of its population. Jobs also migrated to the suburbs. By 1990, Pace's service area supported 2.2 million jobs - an increase of 24.7 percent over ~ 980 levels - while the central city lost 6.2 percent of its jobs. As a result, by ~ 990, the Pace service area housed more people and jobs than the City of Chicago, and the trend is expected to continue. By 2010, the Pace suburban area is projected to have 5.2 million residents and 2.9 million jobs. Table 5- l: Page Market Share Rq tonal Market Pace Rldar~h. Pace Market Share .. . . . . _ Slh~t8~y 482,00027000 5.6% Sh~to-Sd~b 1663~00032000 t City- bob 2 iZOOOt700 &3X ~ to C ty -0000 O.OX Total $35 iOOO67,700 [OX ~ R_dm-0t~8 work b*8 only. P8:0r~rsl ~b$worl~ end no~werk bum These changes in population and employment have had profound impacts on the area's transportation patterns. Pace divided regional travel into four market segments: Suburb-to-City Suburb-to-Suburb City-to-Suburb City-to-City P8gB ~4

OCR for page 103
Pace eaSeSh~ Between 1980 and ~ 990, the suburb-to-suburb and city-to-suburb markets grew by 22 percent and 33 percent, respectively. The suburb-to-city market remained flat, while the city-to-city market declined ~ percent. (See Figure 5-3.) As Table 5- ~ illustrates, the suburb-to-suburb commuter market, at almost 1 .7 million morning work trips, remained the largest commuting market in the region and is approximately the size of the three remaining markets combined. Figure 5- 3: Metropolitan ChieaBo commute Trips 1,800T-- - - ~ - 1,400 1,200 Q 1,000 , ~800 600 400 200 O Suburb- Subur ~City-to- City-to to-City to- Suburb City Suburb ~ 1980 .1990 Pace serves the three suburban markets, which accounted for 72 percent of all regional a.m. peak travel in ~ 990. As Table 5- ~ shows, Pace served just under 3 percent of these trips, although its share varied by market segment. For example, Pace's highest market share, at 5.6 percent, was in its traditional stronghold, the city-to-suburb market, while its lowest share was in the suburb- to-suburb market, at l.9 percent. Unfortunately, Pace has lost market share despite the increase in suburban travel. Pace's ridership dropped by about ~ million trips between 1980 and 1995, despite growing suburban employment and population. In order to understand why ridership declined in this growing market, Pace used market research to gain a better understanding of its changing markets. = In order to develop a profile of its three major market segments, in 199S Pace completed a comprehensive survey of users and non-users. The survey focused on work trip commuters in the suburb-to-suburb, suburb-to-city, and city-to- suburb markets. Pages 5

OCR for page 103
Pace Basest Demographic Characteristics Overall, Pace identified a number of demographic differences between users and non-users, irrespective of market segment. Pace users were more likely than non-users to be female, single, and African American. They had significantly lower household incomes than non-users and were less likely to own their own homes or automobiles. Pace further compared the characteristics of users and non-users in the three market segments. Some of the major findings include the following: The highest levels of marriage, education, income, and home ownership were found in the suburb-to-city market. The lowest levels were found in the city-to-suburb market. The city-to-suburb market included the youngest customers (35.8 years) and the highest female market share (72 percent). The highest African American market share (S9 percent) was found in the city-to-suburb market. Economic differences between users and non-users were least pronounced in the suburb-to-city market. City-to-suburb users had a significantly more downscale economic profile than non-users in this market. Using the survey data, Pace developed a customer profile for each major commuting market. (See Table S-2) commuting Patterns Pace asked commuters why they chose their current mode. Almost half of Pace customers (47 percent) had no other transportation options. Others cited cost savings (20 percent) and/or found transit easier than driving ~ ~ 6 percent). In contrast, non-users cited schedule flexibility (19 percent), unavailability of transit ( 16 percent), and time savings ~ ~ 5 percent) as their reasons for not using Pace. Further, when asked to rank various criteria in making their commuting decision, more than half of both users and non-users considered the following criteria as highly important: control of their schedule, dependability, convenience, travel time, and safety. Pace riders placed more importance than non-riders on dependability, safety, cost, and concern for the environment; non- riders were more concerned about schedule control and flexibility, comfort, relaxation, and privacy. Pagers

OCR for page 103
p~c-- Table 5-~: Peg' DSlD~8P P'o1I8 by "8'k81 S8I~881 :hIPA:18PI$1I: SDIDPI-10-SOI''' SODOPI-10-:I1Y CI11-10-SOID'' 39.4 To.} --- 55.8 - $_ _~00m ED 39.4 Female ~7~) Caucas~n(56~) Nat Bang (~) 14.0 $2g.1 Rent 40.2 Fema~57~) Caucas~n(48~) ~8~ t51~' 4.4 eve c Too. O Own Female(72~) A~canAmeM~n~9~) No1~a~ed(85~) 13.7 arc e ~0.0 Rent More than 90 percent of non-users in even market segment owned ~ least one automobile, ~hOe only 64 percent of Pace customers in the cl~4o-suburb market owned vehicles. (Figure 5-4 summarizes these findings) Pace Amber defined dders as cAofce (those with an auto Payables or c~e (no auto available) far each market as summarized in Figure 3-5. in general the cib~o- suburb market was dominated by captive riders hale choice riders made up the myopia of the suburb-10-ci~ market The suburb-to-suburb Mabel was evenly , . . ago ~ ~ nq''I 5- #: halo O~IrslII by "~'k'1 S'q~''1 ''' User SlalDs 1 00 80~ GOT 40 20 on Suburb- Suburb- ~4o to- 1 ~Suburb Suburb Users n-~ers Pit

OCR for page 103
Pat C" Sot - - Fieur0 5-5: Customer Profits by Pace Market S0om0nt Choice and Captive Riders by Market Segment 70% 60% 50% 40% 30% 20% 10% 0% Suburb to Suburb Q Choice ~ Captive Suburb- City-to to-City Suburb The average customer used Pace for 5.5 years, which means that Pace loses ~ 8.2 percent of its ridership base each year. Customer retention varied by market, suburb-to-city patrons were the most loyal Pace riders, staying for an average of 6.0 years. Suburb-to-suburb commuters rode on average for 5.5 years, and city- to-suburb passengers for an average of 4.4 years. Among the small percentage of non-users who were former Pace riders (~.6 percent of non-users), most stopped riding because they purchased a car or changed jobs or residence. Commuters in the city-to-suburb market were especially likely to have purchased a car, whereas suburban residents were more likely to leave Pace because they changed jobs or residence. Moreover, among current Pace customers, some 20 percent reported plans to move closer to their suburban jobs, while only 4 percent of suburb-to-city customers had relocation plans. Transit competes with the automobile in all of Pace's markets. Overall, automobiles attracted 80 percent of the regional commuting market - and filthy 95 percent of the suburb-to-suburb market. As Figure 5-6 shows, the auto share grew slightly in the suburb-to-suburb and suburb-to-city markets between ~ 980 and 1990. As a result, autos have captured virtually all the growth in work trips in these markets. Autos have a significant advantage over transit in terms of travel time within the three markets. Suburb-to-city commuters had the smallest difference in travel time. Pace commuters reported an average travel time of 42 minutes compared to 37 minutes for auto commuters. In contrast, suburb-to-suburb transit trips were twice as long as auto trips in the same market, with transit trips taking 48 minutes on average compared to 23 minutes for auto. Finally, reverse commuters had the longest time differential, the average city-to-suburb transit trip was 80 minutes (and 26.5 miles) compared to 35 minutes (and 16.3 miles) for auto commuters. P - 548

OCR for page 103
P~:sCa-Sb~ Figure 5- 6: Auto Share by Market S0Dment 100% 80% 60% 40% 20% 0% Suburb- Suburb- City-to to- to-City Suburb Suburb j ED 1980 ~ ~ 199O it= In order to respond to these distinct travel markets, Pace defined a new mission. Vision 2000, which established a goal of serving 45 million riders by the year 2000, set the course for Pace's short-range planning process and service decisions. Pace developed three complementary plans to support this goal. An updated Strategic Plan, originally adopted in 198S, focused on the need for Pace to address the changing patterns in regional travel. The ~ 992 Comprehensive Operating Plan provided a long-range vision for serving the region in the year 2010. Finally, the Marketing Plan, first developed in 1996, outlined plans to achieve ridership goals within each of Pace's target markets. Strategic Plan Pace first developed a strategic plan in 1988 in response to changing transportation markets in its service area. The plan, which was updated in ~ 996, emphasized the need for Pace to keep up with changes in regional travel while sustaining sound fiscal performance. Specific recommendations included the following: Increase non-traditional services like vanpoo] and subscription bus and identify other options for serving tong-distance and low-density commuting markets Develop park-and-ride facilities and transit centers to support express bus, subscription bus, and vanpoo] operations Provide bus priority at traffic signals in congested travel corridors Expand the availability of shelterer! waiting areas Pq0 5

OCR for page 103
Pass Cage Sib - These goals were designed to serve Pace's changing markets and to help Pace achieve its vision of serving 45 million customers by the year 2000. comprehensive Operating Plan in 1992, Pace developed a long-range Comprehensive Operating Plar' ~COP' which established a vision for a suburban transit system in 2010 and identified specific goals for operations and capital expansion. For example, the COP included the following recommendations: Double the level of fixed-route services, focusing on key corridors serving major employment centers Expand dial-a-ride services throughout the service area Operate 500 vanpools Triple the size of the vehicle fleet to 3,200 Develop additional garages, park-and-ride facilities, and transit centers Implement restricted-use facilities to allow buses to bypass high-congestion areas on highways and tollways Expand signal preemption Through these goals, the Comprehensive Operating Plan provides a link between Pace's long-range vision and its short-range operating and capital budgets. Marketing Plan Pace prepared its first Marketing Plan in 1996, which both summarized the findings of the user/non-user survey and defined strategies for achieving ridership goals within each major market segment. The plan focused on work trips, which make up 80 percent of Pace's customer base, and identified the following opportunities for attracting automobile users to transit. Reduce transit travel time in relation to driving time Increase opportunities for convenient park-and-ride l[ncrease awareness of actual driving costs Evaluate potential to convert carpoo} commuters to vanpoo! passengers P8g. 5-10

OCR for page 103
- PaesiawSb. Create opportunities for alternative fare payment mechanisms Pace further translated these goals into specific strategies for serving each market segment through pricing, promotion, and service. These strategies are presented in Appendix A. _= Pace created the Marketing and Development Group in ~ 989 to work directly with employers and developers. The group, which was originally set up as a section within the Strategic Planning Division, had two components: (~) outreach and (2) technical review assistance. These are described below. Ouireaeh Program The Outreach Program was designed to inform employers, developers, and municipalities about Pace's technical services. The program has four major objectives: Increase awareness of Pace's Marketing and Development Program Work closely with municipalities and developers to incorporate transit considerations into construction projects Work closely with employers to address their transportation problems and to encourage greater use of public transit Become a clearinghouse for all development- and design-related issues As part of its outreach efforts, Pace issued Development Guidelines in ~ 989 for distribution to developers, employers, and local governments throughout its six- county service area. To further disseminate information about the program, Pace held a series of Marketing and Development workshops for architects, developers, and engineers. At these workshops, Pace provided an overview of the Marketing and Development Program and discussed the Development Guidelines. Teeinical Review Assistanee Program Through the Technical Review Assistance Program, Pace focuses on incorporating transit services into suburban developments, using both traditional and innovative approaches. This program consists of four elements: Paster

OCR for page 103
Pleases SKe plan renew. A Pace engineer recommends site modifications that will allow the development to accommodate both transit riders and pedestrians more easily. Site plan review may also include traffic and safety analysis. Pacers role is advisory only. Transportabon Management Alsocialen~. Pace works closely with Transportation Management Associations (TMAs) at employment sites to investigate appropriate traditional and nontraditional transit solutions for the area. Marketing and Development staff liaisons represent Pace on the TMAs. Jobt Ievelopment OppOM~$. Pace identifies opportunities for joint development with public and private sector partners. Serve BptioB$. Pace staff reviews nontraditional transit solutions to transportation problems at suburban work sites, especially for employers relocating from downtown Chicago. These may include a range of service and transportation demand management (TDM) strategies. Pace's service options are described in more detail in the next section. = :E As described above, Pace offers employers a number of services - from planning to implementation. Specific transportation services are tailored to the level of demand. For example, Pace will consider developing a vanpoo! for a group of 5- ~ 5 commuters with common origins and destinations, while a group of 30 commuters can support a subscription bus. Service options are described below. Employee Surveys In response to the State's Employee Commute Options (ECO) legislation, which required employers to reduce the number of employees driving to work alone, Pace developed a standardized survey instrument that asked employees questions about their work schedule, mode choice, and transportation preferences. Using home ZIP codes, Pace was able to identify clusters of employees for potential services, including vanpools, subscription buses, and fixed-route buses. The State eventually repealed the ECO legislation, which reduced the demand for this information. Nevertheless, Pace administers these surveys upon employer request. P8gB 5-.E

OCR for page 103
P - Cause Vanpools Pace introduced its Vanpoo] Incentive Program (VIP) in November 199~ . Today only Seattle has a larger program. A group of 5- ~ 5 commuters travel to work in a van that is owned, insured, and maintained by Pace. Each vanpoo! includes one volunteer driver and at least one back-up driver. Participants pay a monthly fare based on the number of passengers and their average daily mileage. Monthly fares range from $45 to $ } 2 I, and passengers may purchase a CTAfPace Everyday Monthly Pass for $43, which provides access to other Pace and CTA services at a discounted rate. Passengers may also request a Monthly Pace Commuter Club Card, which allows the use of most Pace fixed-route services seven days a week. This card is free to vanpoo! users. The primary vanpoo] driver does not pay a fare and may use the vehicle for up to 300 miles of personal travel per month. The average vanpoot trip length is 76 round-trip miles per day. Pace designed its program to be as cost-effective as possible. Pace owns the vehicles but contracts out numerous operational elements, including fleet management and maintenance, driver training and physicals, and fleet insurance. In addition, drivers receive credit cards for fuel and related purchases. Although the program was designed to cover 80 percent of its operating costs, fares currently cover close to 100 percent. Shuttles to Rail Pace will lease a van to an employer to provide shuttle service between the work site and a commuter raid or rapid transit station. The monthly fee is $720, and the employer is responsible for providing a shuttle driver. This program has not proven to be as popular as Pace's other services, primarily because of the staffing requirement. Accordingly, Pace is currently evaluating this program to determine whether it can better meet employer needs. Options include providing a driver or contracting the service. Subscription Buses Subscription buses provide regular daily express service to groups of 30 or more passengers. Passengers sign up on a monthly basis and receive guaranteed seating. Pace's fare recovery ratio standard is 60 percent in the first year and 50 percent thereafter; monthly passes are $99. Pace currently provides ten subscription bus routes. Pagers

OCR for page 103
Pace Cal - Sit - - Modified Fixed-Route Services if sufficient demand exists, Pace will develop new routes or motif existing fixed-route services in order to improve access to major employers, as it did for . . . d__ ~ Act: .. _.,..,; i.,. Aim... the Rush-Copley Medical Center. Case Example: Sears Reloeation Pace slow serves IxIJ>~{-t'()I3LE) l~lEI)I(,.-\L CE\iTER {' ' 1 '.: .:, ~ ~ ~ ,;, . .. ~ Pxt}St-1 ;\ !~.~.. low (~! I;` R\J~I~ >a',.:,, I\., I {.~..llil In 1989, Sears Roebuck & Company announced its plans to relocate approximately 5,000 employees from the Sears Tower in downtown Chicago to the Prairie Stone development in the suburban community of Hoffman Estates. Whereas 92 percent of Sears employees used transit to reach the downtown location, the new site had no transit service whatsoever. Suddenly, Pace had an opportunity to test the success of its marketing and development strategies on a large scale. From the beginning, Pace worked closely with Sears management and employees to identify transportation needs and to develop customized service alternatives. Pace's activities included the following: identify transportation needs Review site plans Develop and implement services These three activities are discussed in greater detail below. Identify Transportation Needs Starting in 1989, Pace Marketing and Development staff worked closely with the Sears relocation team to identify employee trip origins and preferences for travel .Pa~H

OCR for page 103
Paeela-S~q to the new site. Throughout the process, Sears worked with Pace to survey its employees and to educate them about their transportation options. For example, early in ~ 990, Sears surveyed its employees about current and future commuting patterns; more than 4,200 employees returned surveys, for a response rate of S! percent. In addition, Sears set up a transportation room in the Sears Tower, which housed an interactive computer to provide information about transit options. After entering their ZIP codes, employees received information about how to get to the Hoffman Estates site by using various types of transit service (e.g., fxed-route bus, subscription bus, or vanpool). Employees could also enter their comments. Pace participated in numerous employee meetings, along with representatives from the RTA, CTA, and Metra, and even brought buses and vans to the Sears Tower so that employees could see first-hand the types of service alternatives available to them. D0velopment CuldelInes Sears agreed to a number of traffic mitigation measures as a condition for developing the site. For example, Sears constructed 4,000 parking spaces to accommodate the 5,000 relocating employees; under typical zoning requirements Sears would have constructed a minimum of 5,700 spaces. In addition, the agreement between Sears and Hoffman Estates required Sears to establish a Transportation Management Association (TMA) to coordinate transportation compliance activities. In addition, Pace reviewed site plans to ensure that the transportation center proposed for the site could accommodate buses. Develop and Implement SBrvIces During 1991 and 1992, Pace met with Sears employees and conducted follow-up surveys in order to define interest in potential service options. Based on this review, Pace developed the following service plan for submission to the RTA. [b`~ Slav" Pace proposed four fixed routes to serve the Prairie Stone site. Two express routes would link employees with CTA rapid transit stations, and two local routes would serve suburban Metra stations. Fares were consistent with Pace's fare structure. Subscript on buses. Pace proposed 20 subscription bus routes to serve the facility. Consistent with Pace's service guidelines, these routes would collect passengers from one or more designated pick-up locations and travel non-stop to a designated work site. To support the bus services, Sears agreed to provide parking at eight of its retail stores throughout the region. Vanpool$. Pace estimated that about 25 vanpools were likely to form, based on expressed interest, geographic location, and compliance with Droaram P -

OCR for page 103
paGBca~s~ criteria. Sears would provide parking at 12 retail locations as well as preferential parking in Hoffman Estates. Prayed Stone Tran1R Goner. Sears agreed to construct a transit center designed to serve the employees commuting on fixed-route buses. The center would have eight bus bays, a passenger waiting area, driver?s washroom, and a transit information panel. As Prairie Stone developed over time, the transit center would serve other commercial developments as well. Net operating costs for the proposed service plan were estimated at $3.7 million for the 1 7-month project start-up period. Pace would cover $ ~ .3 million, Sears would pay $0.9 million, and the RTA was asked to pay $1.5 million. Fares were projected to cover 56 percent of operating costs. Pace agreed to pay all capital and operating costs for vanpools, as well as $750,000 toward the construction of the Prairie Stone Transit Center. Sears agreed to guarantee a 50 percent farebox recovery ratio for all fixed routes in ~ 992 and 40 percent in 1993. Sears also agreed to contribute land valued at $760,000 for the transit center. The RTA was asked to pay the remainder of the fixed -route costs and to fund all subscription bus service. Unfortunately, the RTA declined to fund the project. Although Pace was able to convince Sears to contribute an additional $250,000 to cover transportation costs, the agency absorbed more than $ ~ million in additional operating costs for the project. Current Status Five years after the move, the Prairie Stone Transportation Management Association works with area transportation agencies to improve commuting options to Sears and other tenants in the business park. The TMA coordinates and promotes the following services: Three Pace fixed-route bus lines providing service to CTA and Metra stations and area shopping centers Eight subscription buses More than 50 Pace vanpools Guaranteed ride home program Currently, nearly 40 percent of Sears employees at the Prairie Stone site use some form of ridesharing. As a result, only two-thirds of the available parking is used on a regular basis. The Prairie Stone transit center has been completed. Pagers

OCR for page 103
Paecea~S~ The success of the Sears relocation was due in large part to Pace's pro-active business development tactics. Pace carries this "business mentality" to other areas as well, most notably its oversight of Marketing and Development Managers. These managers are held accountable for reaching these three major goals: Provide new services for existing customers Create new customers for existing services Create new services for new markets To fulfill this mission, Pace has developed nontraditional services and markets them in an innovative way. Some of the elements of this approach include the following: Create a product that customers want Build long-term relationships Develop a business culture Adapt to new markets These are described in the following sections. Create the Product After determining from its market research that the suburb-to-suburb and city-to-suburb commuter markets were growing, Pace focused on developing a series of products targeted to those current and potential customers. Services were developed with two criteria in mind: What value can this service provide? How responsive can Pace be to He needs of this customer? Ultimately, Pace developed a relocation package designed to address the needs of commuters and their employers. Services include development guidelines, site plan review, employee surveys, site visits and transit days, and - as described earlier- a range of innovative services. Moreover, Pace has tailored . . . .. ~ ~l,(~(~ Pace Subscription Bus Seruice provides comfortable, on-time and cost effective service direct to your location. Concerns Cost et Relocation ~lDSS of Employees Construction Oelays /Construction Costs almost Production Time . :..: .. ...; ; . . . ..... ~ ; ..... 1 .-.''.'~'" ~ 'I ''.''.'',. . :.... .: . - ...:- ,.... .,..: ,,,, ago?,:.... ~\ , !, . ,; . ~ ' ' 1.,: .. ,'; . .: ,., '"'' '' '' '2' '" i''' " '' ~ '''"' ~ " ' ''2 '' '..'l' '''',. '.'\ '' . ', ." 2 .'.'; ' '. ",".'' :',',,''''2',' : .'..,,''':,,'."''" :~:';, . 'I . ''', '' . 2~, '"' . ' ': answers lhI'nimize Employee Turnouer Employees arrive fresh and ready to work Reduce Employee Travel lime at FREE technical review for transit and pedestrian access A Fresh Approach To Public Transportation P8gB ED

OCR for page 103
Pam ea~Sb~b these services to meet the needs of its customers. For example, Pace set up a system to bill vanpoo] customers directly because employers did not want to handle the paperwork. Similarly, in order to set up a guaranteed ride home program for Sears employees, Pace agreed to process the vouchers and allow Sears to reimburse the agency. Establish [ong-Term Relationships Pace strives to develop long-term relationships with its customers. Marketing and Development staff stay in touch with area employers and business groups in order to build productive contacts. Even when there is no immediate payoff, Pace tries to take the long-term view and acknowledge that some contracts will yield results over time. Pace also works hard to develop loyalty among its customers, especially in tile vanpoo! program. For example, Pace distributes a newsletter to vanpoo! members, gives them coffee mugs when they complete the driver training program, and sponsors an annual brunch for drivers and back-up drivers. In addition, Pace presents an award to the driver and back-up driver of the year (who are nominated by vanpoo' members) and is creating a program to reward long-term vanpoo' members. Although the vanpoo! program is not quite six years old, Pace has created the V]P Silver Club for five-year drivers and the Gold Club for ten-year drivers. Silver Club members will receive a VIP sweater that Pace designed; to be suitable for office attire, in this way, Pace can use award recipients to spread the word about VIP at the workplace. Develop a Business Deplore In order to serve area businesses effectively, Pace changed its operating style. The Marketing and Development Group was set up like a sales force; each staff member had a geographic territory and was responsible for working with the employers in that area. Other changes were more subtle. Pace managers deal with developers and businesses, who relate better to a "business culture." In other words, Pace staffers try to avoid the public sector cliches ("a government attitude") and approach employers as potential clients. Ultimately, Pace managers believe that transit has all the characteristics of a business, except one -- transit does not make a profit. Nevertheless, says one manager, "You can run a public sector service like a business." This approach has not always gone smoothly at Pace. Uncomfortable with the concept of market-driven transit planning, some employees have resisted institutional change. Pace is working to change this "traditional transit mindset" in a number of ways. First, and most significant, Pace designed its organizational structure to separate strategic planning from operations. (A Pace organizational chart is presented in Figure 5-7.) This has enabled managers to Pagers

OCR for page 103
face Case Sib create a strategic planning group that is charged with looking at the "big picture." Operations planning staff are expected to develop services that implement the strategic vision. Of particular interest, Pace managers decided to locate the vanpoo} program within the strategic planning group, rather than operations planning, because they considered it a "value-added service." Second, Pace managers are working to keep all employees informed about the benefits of market-based planning. The Marketing Plarl, in particular, was developed to educate operations staff about Pace's approach to serving different market segments. Finally, managers have instituted programs to recognize employees who are implementing innovative solutions. These include an employee of the month program, for which managers nominate members of their staffs. One award, for example, went to a planner who developed the Joliet Flex-Route service, which combined two lightly-used Saturday routes. Adapt to New markets After reviewing regional and national demographic and economic forecasts, Pace organized its strategic plan around the need to serve the growing suburb-to- suburb and city-to-suburb commuting markets. At the same time, Pace recognized the need to change its way of doing business in order to serve these new markets effectively. Too often, Pace managers believe, the transit industry has resisted change. And the longer the industry resisted change, the more it needed to be bailed out. According to one manager, "Transit is always playing catch-up." Page ~s

OCR for page 103
Paw case Sb~ Figur0 5- 7: Pae0 Organizational chart C~1. O. P^C~ Orr~^r4~:~^Tlo~r`~ C~r`~r Cilixen f P:~ - Rid~rc Ch~nnan an* I Board Or Directon : - . ~ecutive Director Intergover~nmental General Counsel Affairs (ADA. RF.O, ORE) . . - . _ _ i Inl. 'm;~1 I r Board | Auctit l | Secreta~y l _ Matenals ~Human Chief Financial M.~n;.g~mcnt ~Resources Omcer Regionnl ma' ~ Fc~x ~v;`lle,. _ Rjycr.. Ur4:~. ,' i\~:~ ~o'~l hI, t. ~ t `~'.~. .Y','~i, Sh''r I! :' ~ _ 8us Operatinns ` ~N<`t~t'~ e'~t (Deputy Exe=tive Dlr) ()per' ~ {` S;`fety R~gi<7n^1 Mtr - , ~Operations PInnning Heri t;` gc. ~ _South~ 5;outhw~st Program Ate.. | Adm~nistra~ion | Centra1 Suooort J ?~;`r ~ Divisiv~s J Pal8~20 r 0~pU~r Exec. Dir PJanni~R ~ Adm~nistration . . 1 l Managemcnt I nto'7nation Systeme Cash M~n~gemcnt . Capita1 rlannins: & _ Constt~uction Bud~at Accounting C)perations Ana~ysis ) f ?~lainten~nee & ~ |< Technica' Senri~es ) Stralegic Planninx ~ Yanpool l~t;trk~tine ~ Dcve~lopnl~nt Commu'.ications A`l~l~il~'strat~on & Risk Management Paralral~sil | Previously, Pace managers followed a simple marketing strategy -- Letting people know about the agency's services was enough. After adopting the strategic plan, Pace developed a marketing approach that was similar in some ways to the philosophy of transit agencies at the turn of the century. At that time, transit providers - which were private businesses - built amusement parks or developed real estate along their rights-of-way in order to attract ridership. While Pace did not propose to build a theme park in Arlington Heights, the agency established its Marketing and Development Group to sell transit services to its target market- area businesses and commuters. .

OCR for page 103
Pace C" Sir While Pace's annual budget is certainly considerable, there are nonetheless lessons from how Pace prioritizes marketing in the financial allocation process which can be applied to agencies of any size. Program loses The Marketing and Development Group has a staff of 7.5 persons, including a Manager, a senior marketing and development representative, four other marketing and development representatives, a market analyst, and a half-time secretary. The total budget for this group in 1997 was $358,000, which covered salary, fringe, local travel, business expenses, and marketing development expenses. The staff also received a $50,000 grant to produce promotional activities associated with new videos, and which paid for past video production. Tile Vanpoo} Incentive Program, which is part of the Strategic Planning Division, has nine plus employees, including a Manager, a vanpoo] services administrator, a vanpoo! services representative, a vanpoo! data assistant, four vanpoo! coordinators, a driver to move vans around, and a third time-shared secretary. The estimated VIP budget in 1997 was $~.4 million, and revenue is projected to exceed costs. This budget estimate assumes 256 vans in service and over ~ million annual riders. The ADA program is another $0.3 million. Pace's entire Communications Plan was budgeted at Hi.! million for 1997. Activities targeting the vanpoo] program, which are aimed primarily at employers, include newspaper and magazine advertising ($ ~ 0,000), printed materials ($23,000), and direct mail ($5,000~. Out of the total operating budget of around $! 10 million, the Communications Plan is approximately ~ percent. Program Evaluation Pace measures its progress in a number of ways. Managers set goals for ridership and fare recovery on various services. For example, the fare recovery goal for the ~ranpoo! program is 80 percent, while subscription buses are expected to cover 60 percent of their costs in the first year and 50 percent in subsequent years. In addition, the Marketing and Development Group sets specific goals as part of the annual Marketing Plan. For example, in 1997, the group established the following goals. Increase employer telephone contacts by 10 percent Increase meetings with employers by 10 percent P8gB 5-21

OCR for page 103
Pace Cam SO Increase V]P program by 50 vans; each representative is responsible for forming ten vanpoo} groups Form at least two new subscription fixed routes as a result of employer relocation Implement at least one new employer-filnded service program Finally, Marketing and Development representatives keep track of their market contacts ant! submit monthly reports that summarize the following for each contact (1) attempted calls, (2) completed calls, (3) meetings held, and (4) letters sent. In addition, staff members complete an activity report for each contact that summarizes every phone call, meeting, and related actions (e.g., report submitted, brochures mailed, or contract executed). G=Ie There is much about Pace's marketing strategies that is transferable to other transit agencies. Certainly the market conditions faced by Pace are very typical. However, Pace's location as a suburban transit authority in the metropolitan area of a very large city makes it different from many authorities. Not every agency will be able to provide service to a relocating employer as large as Sears. Nonetheless, key transferable lessons include the following: A change to a market-focused orientation must be supported from the top. Pace had this type of support, which was demonstrated in the creation of both the strategic vision and the Marketing Development Group. Becoming a marketing-oriented agency takes resources. Pace is spending around ~ percent of its operating budget on its marketing and communication program, and over 2 percent if its Vanpoo] Incentive Program is included in the computation. Changing to a customer-focused orientation takes time. Pace started in 1988 with a Strategic Plan and created the Marketing and Development Group in ~ 989, also the year Pace began to work with Sears. The Vanpoo! Incer~tive Program started in 199 I, and the first marketing plan was developed in 1996. Still, there is concern that the organization as a whole has resisted institutional change. Pat