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Chapter 1 Introduetion Traditionally, public transportation agencies slave marketed their services directly to riders and potential riders. In response to changing market conditions, however, a number of transit agencies have begun to direct more of their marketing efforts toward businesses. Many transit agencies have worked closely with employers, in particular, to promote a range of services, including ridesharing, prepaid pass and voucher programs, guaranteed rides home, and customized services. Some agencies have encouraged developers to incorporate transit-friendly elements into site design, while others have worked with local retailers and institutions on joint marketing efforts. Nonetheless, the transit industry, in general, has less experience in business-to- business marketing than do for-profit industries whose entire livelihood often depends on successfully targeting consumers. In an effort to learn the most effective strategies and techniques from the for-profit sector, the early research for this TCRP project focused on large, private companies in exceptionally competitive industries. At the same time, the team documented transit agency examples of product and service development, design, and marketing. After these broader efforts were completed, the team moved on to conduct more detailed analyses of particularly innovative transit properties, one multi national bank and one large non-profit HMO. The findings from both pleases of these projects are summarized in this report. G8~ Transit providers and the business community are natural partners. Working with the business community can help transit operators gain ridership and broad- based community support. Businesses, in turn, can stay competitive while improving their public image - and save money at the same time. Page t]
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In~bclm Advantages to Transit The benefits to transit providers of working with the business community are substantial. Although businesses do not consume transit directly, their employees, customers, and clients do. Rather than attempting to reach individual riders, which is difficult without extensive advertising and promotional budgets, marketing to employers - especially large employers - allows a transit property to reach many potential riders through a single targeted approach. This approach is analogous to wholesale marketing, in which the employer takes the place of the wholesaler. Advantages to this approach include the following: eo$~ff08tiV8888S- By marketing directly to businesses, transit agencies can reach a concentrated group of current and potential customers in an efficient and cost-effective manner. Targets message- Because employees, students, and other business customers often have similar travel patterns, transit agencies can target their marketing messages and services. community support-By working closely with the business community, transit operators have an opportunity to gain visibility and to develop allies for current and future programs. This relationship allows transit agencies to increase the efficiency of their marketing programs. Instead of the traditional approach, which aims advertising and marketing programs at individual passengers, marketing directly to business enables transit agencies to target their message and reach numerous potential consumers at once. In effect, the business community provides an efficient distribution network for transit to identify and communicate with current and potential riders. The outcome can be more riders and, possibly, higher revenues. Benefits for Business What about the business community? Working with transit agencies to improve access to sites can save money, improve productivity, and benefit businesses in a number of other ways. Consider the following: Save money For employers in densely developed cities, parking may be prohibitively expensive to provide. Subsidizing transit fares may be a cost- effective alternative. In addition, federal tax benefits are available for subsidizing transit and ridesharing alternatives. PB98 t2
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--~--~ ~ Improve access Businesses can work with transit agencies to improve access to their facilities in a number of ways - by promoting the use of existing transit services and by developing new services (such as reverse commute service, suburban shuttles, or guaranteed ride home programs). Improved access can help businesses recruit and retain employees and serve their clients more effectively. Shorter commutes may also improve productivity. · Regional b~nem$-Encouraging increased use of public transit can help reduce congestion and air pollution. Moreover, federal, state, and local regulations have required many employers to encourage their employees to use mass transit, especially in larger cities. Ultimately, transit programs are one more way for businesses to gain a competitive edge within their field. Tile advantages may be direct and quantifiable; offering subsidized transit passes, for example, may increase tile value of employee benefits packages over those offered by competing employers. Other advantages may be snore subtle. For example, working to support environmentally friendly transportation solutions may improve a co~npany's public image in certain markets. Although the benefits will vary with the setting, working with transit operators has clear-cut advantages for the business community. Businesses have ready access to a service that enhances their position in the marketplace- and can save them money in the process. For decades, public transit has competed in an increasingly difficult market. Transit fares continue to rise' operating subsidies are still at risk, and ridership has declined in most markets. The competition is formidable. Gasoline prices have been stable or have dropped in real terms for years.2 Suburbanization trends continue (although some communities are recognizing the costs of this trend and are working to reduce sprawI). Parking is often as widely available, and air quality regulations affecting commuting (where they applied) have eased. Moreover, the automobile industry easily outspends transit on marketing its product. In 1996, the auto industry spent $11.6 billion on advertising, which was more than 17 percent of all United States advertising dollars. Transit-to-business marketing can help offset these market imbalances. Accordingly, over the past ten years, transit-to-business marketing has changed from a peripheral concern to a major focus in many agencies. The business community offers many resources, including the ability to sponsor new services, support promotions, subsidize fares, provide in-kind staff support (employee transportation coordinators or executives on loan), and - of course - supply passengers. It is no wonder then, that over the past ten years, more and more transit agencies have begun to explore the possibilities for marketing their services directly to businesses. Pal 3
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Inb~8on In an attempt to assist transit agencies in developing effective techniques to market their transit services to businesses, tI,is TCRP research project culled relevant techniques and strategies from for-profit industries, the non-profit sector, and experienced transit agencies. In order to draw insights and to develop a list of techniques and a sense of the best approaches, the project team conducted extensive interviews, completed a thorough literature review, and initiated meetings with a number of transit properties. This research was by no means exhaustive, but is comprehensive enough to lay a firm foundation from which transit can move forward with more aggressive and effective transit-to- business marketing efforts. A= The first portion of taxis report is intended to offer background information about both business-to-business and transit-to-business marketing, as well as to describe popular trends and practices in a variety of different fields. These broader industry perspectives are supplemented in the latter half of the report with detailed information from four case studies; two are from the transit sector, one is from the banking industry, and the remaining one is from the health care sector. The report begins with Chapter 2 and a comprehensive review of business-to- business marketing theory. The chapter opens this report by summarizing the differences between business-to-business and business-to-consumer marketing, and the resulting implications for transit-to-business programs. The chapter also reviews the marketing process behind most successful programs, and highlights the tools and techniques that are particularly effective in business-to-business marketing. in an effort to link marketing theory with existing transit practice, the project team catalogued various transit-to-business marketing efforts taking place around the country. Chapter 3 summarizes this work, and also focuses on the various types of transit service now marketed to business, including ridesharing, employee passes, transit vouchers, and reverse commute programs. Chapter 4 offers a window into other industries that has e been successful in retaining a customer focus even in the face of extreme competitive pressures. The industries reviewed in this chapter include package delivery systems, banking, telecommunications, travel, insurance, and non-profits. These industry examples together are intended to show the diversity and scope of business-to- business marketing, and to provide some insight into techniques that might be applicable to transit-to-business marketing. To satisfy the need for extremely specific information about business-to- business marketing, several case studies were selected for more detailed analysis. Chapter 5 reviews Pace, a transit service provider in suburban Chicago, and Chapter 6 summarizes voucher programs throughout the country. Pew l-4
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b~c8m Two non-transit examples also were selected for review. Tile Bank of America case study is contained in Chapter 7, and the HMO Kaiser Permanente case study is included in Chapter S. Tile report concludes with a summary of the findings from the project, with a focus on "lessons learned" from the research effort. Pagers
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Representative terms from entire chapter: