|
Items in cart [0] |
Questions? Call 888-624-8373 |
PAPERBACK Free Resources |
||||||||||||||||
|
||||||||||||||||
|
|
|||||||||||||||
| ||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
| Copyright © 2009. 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 104
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 105
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 106
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 107
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 108
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 109
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 110
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 111
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 112
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 113
-
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 114
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 115
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 116
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 117
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 118
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 119
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 120
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 121
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 122
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' Senrią~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 123
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 124
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
Representative terms from entire chapter:
prairie stone
