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OCR for page 57
Chapter 3
Transit to Business Marketing
Em
Marketing is essential for any transit agency with goals for ridership stability and
growth; marketing to business should be an important component of a transit
marketing program. Fortunately, many transit organizations have successfully
blended both business-to-consumer and business-to-business marketing strategies
and techniques to increase ridership.
The sections that follow offer a synopsis of the various types of transit services now
marketed to businesses, including ridesharing, employee passes, transit vouchers,
and reverse commute programs. The objectives in developing this synopsis of
transit-to-business marketing examples are to provide a broad look at the types of
programs and marketing methodologies being offered by traditional transit agencies
and other organizations promoting alternatives to the single occupant vehicle. The
synopsis includes a description of the programs and, when possible, information on
the costs and benefits of each. Table 3-1 shows the various agencies included in the
synopsis. Most all of the programs covered are aimed at employees.
In addition to examples of transit programs aimed at employees, there are a few
programs designed to serve business customers rather than employees. These
include providing services to hospitals, universities, shopping areas, developments,
and apartment complexes. These programs may entail special fixed-route or
paratransit services. In these cases, the businesses may fillly or partially cover the
cost of the operation of the service, or there may be special fares through the sale of
passes, fare discount coupons, etc. However, there are relatively few examples in the
literature of these programs compared to those programs aimed at employees.
Therefore, this report focuses on employee-related services.
This chapter begins with a review Blithe issues in measuring the costs and benefits of
marketing campaigns, and continues on to describe specific business-to-business
marketing techniques used to market employer-based transit services. The chapter
concludes with a summary of the marketing techniques that are particularly effective
in reaching consumers and businesses alike.
Pql. 3-]
OCR for page 58
Trans t to Renege Marks -
Table 3-~: Transit Programs Marketed to Business lover0d
in the Literature Review or in Phone Interviews
RldesbarI.s
RIDES for Bay Area Commuters (San Francisco, CA)
Metropool (Stamford, CT)
San Diego Association of Governments (San Diego, CA)
Miami Beach TMA ~ Miami Beach, FL)
University North Transportation Initiative (Tampa, FL)
.
Seattle METRO (Seattle, WA)
Virginia Department of Rail and Public Transportation (VI)
Toledo Share-a-Ride (Toledo, OH)
Baltimore County Rideshare Office (Baltimore, MD)
. _
Southeast Wisconsin Rideshare (Milwaukee, WI)
PACE Vanpool Incentive Program (Chicago, IL)
Coronado Transportation Management Association, (Coronado, CA)
Irvine Spectrum Transportation Management Association (Irvine, CA)
Long Island Rides (Long Island, NY)
~ ,_
FIx~d-Roet0 Bus S0rvIees
Pinellas Suncoast Transit Authority (Clearwater, FL)
| Eagle Transit (Kalispell, MT)
Phoenix Regional Public Transportation Authority (Phoenix, AZ)
SEPTA (Philadelphia, PA)
Employer Pass Prooram
Minneapolis' MN
MetroDade (Miami, FL)
Multi-Operator Clearing House (San Francisco, CA)
Houston, TX
GCRTA (Cleveland, OH)
Denver RTD (Denver, CO)
Des Moines MTA (Des Moines, IA)
Seattle METRO (Seattle, WA)
Hartford, CT
DART (Dallas, TX)
MBTA (Boston, MA)
Duluth, MN
Page 3-2
OCR for page 59
T~it-~ M^0 -
Table 3-2: Transit Programs Mark Business eoveredin the Literatur0
Review aria Phon0Int0rviews [continu04]
Pass Program for [andIords
CY-Ride (Ames, lA)
TransitChek Program, Port Authority of New York and New Jersey (New York
City, NY)
. .
Denver Regional Council of Governments (Denver, CO)
1 - - 1
TraesIlVoucherProeram
Louisville, KY
Buffalo, NY
Chicago, IL
Sacramento, CA
Milwaukee, WI
Seattle METRO (Seattle, WA)
Pittsburgh, PA
Los Angeles, CA
Minneapolis, MN
Norfolk, VA
MAPC (Boston, MA)
MTC (San Frar~cisco' CA)
,
Delaware Valley Regional Planning Commission (Philadelphia, PA)
tWMATA (Washington, DC) |
| Revers 0 Comme te Program' | MetroWorks, I ndianapo I is Pub 1 ic Tranc formation Corporation (In d ianapo I is, |
PACE Suburban Bus (Chicago, IL)
| Accessible Services, Inc. (Philadelphia, PA) l
=~e=
Measuring Costs
Budgets for marketing campaigns are largely dependent on transit agency funding
levels, the quantity of service being offered, and the degree to which a completely
separate sales staff is employed during the marketing campaign. In established
organizations that provide many services and employ a dedicated sales staff, direct
marketing costs are much higher than for a small agency in which the technical staff
is also in charge of marketing and sales. Also, given that many of the smaller
agencies do not necessarily have very complicated accounting procedures, it can
PllB3
OCR for page 60
Transit to ~ Mark0tog
-
often be difficult to esti~nate tl~e a~nount of staff time that is being spent on marketing
efforts as separate from general technical work.
Accounting is not the only obstacle to assessing marketing costs. It appears that
most agencies allow their marketing efforts to be based on the level of funding they
have available, spending as much or as little as their budget allows. RIDES for Bay
Area Commuters has had to reduce its marketing budget in recent years due to
budget cuts, and this need to adjust to funding levels appears to be a common
characteristic of the ridesharing business.21 Given this environment, it is difficult to
establish a precise measurement of typical marketing costs for most programs.
Rather, it appears that transit organizations tend to spend what they can on marketing
and hope for the best results at that level of effort. Where specific numbers are
available, however, they are included in this section of the report.
Measuring Benefits
Transit
organizations
tempo spend
whet they eat on
marketing and
hope for the best
results et that
Ievelof~ffort.
There is little empirical evidence tracking the impacts of specific marketing
campaigns on ridership levels or on employer participation. In fact, there are only
one of a handful of studies linking transit marketing with subsequent impacts. In the
course of our efforts, we encountered several obstacles to measuring the benefits
from a given campaign, most notably the relative inexperience of many transit
marketers and the general lack of investment in marketing.
It is unclear to what extent the agencies surveyed were familiar with the nuances of
each of the techniques, and to what extent lack of experience and training may
explain the wide variability of the results (i.e., an agency may consider response to a
direct mailing disappointing because they do not realize that almost all direct mad!
campaigns tend to produce low response rates). It appears that none of the agencies
invest any significant effort (or money) in market research, which, of course, makes
it difficult to have any assurance of success. Studies of other transportation
providers have found a consistent lack of general understanding of marketing
techniques among smaller operators and agencies.22
Another barrier to evaluation comes when the promotion of transit alternatives is
viewed as an obvious part of a package of solutions to combat transportation and
environmental problems. In these cases, little effort has been put into measuring the
impacts of specific transit services. This certainly makes it difficult to understand the
benefits that have been realized, or to assess the effects of certain marketing
techniques.23 For the evaluations that have been performed, the quality and depth of
analysis varies widely, largely depending on the particular concerns and
requirements of the various agencies and their funding sources. This makes it
difficult to compare different programs or to draw general conclusions about
benefits. As with cost information, when specific data on benefits or impacts from
marketing are available, they are included in the overview of each program.
Page 3-4
OCR for page 61
Transit-to~ss Markeffnn
Ridesharing Programs
The basic idea behind a ridesharing program is to increase
the average occupancy of vehicles by encouraging
commuters to travel together, usually either in cars
(carpools) or vans (vanpools). Ridesharing provides an
intermediate point between driving alone and using transit,
with some of the personal and societal advantages and
disadvantages of both. More recently, the construction of
more High Occupancy Vehicle (HOV) lanes in urban areas
has provided a true time advantage to commuters who
rideshare in congested areas. Unfortunately, the decreased
flexibility created by the need to coordinate with other riders
continues to be a major drawback, limiting ridesharing's
popularity 24.25,26,27
The key ingredient to making a ridesharing program work is
to snatch riders together based on proximity at both ends of
their daily commute. This rideshare matching has
traditionally been offered as a free service by a non-prof~t
agency, regional government, a transit agency, or a business
association such as a Transportation Management
Association (TMA). Most rideshare operators enter
applicants into a large database, and then match carpool and
vanpool participants with one another based on points of
origin and destination. To mitigate both the discouraging
effects of rideshare application forms and the inflexibility
associated with ridesharing, a great deal of effort has been
put into promoting the advantages of ridesharing. These
efforts have been most successful in places of employment
where rides can be shared with fellow co-workers instead of
with strangers who happen to live in the same area.
With regard to ridesharing organizations that are TMAs,
since participating companies are oftentimes paying for the
existence of the TMA, employers have a built-in incentive to
remain active in program development and promotion.
Because TMA services are often only provided to members,
TMAs must market themselves to non-member businesses.
Even for existing members, though, marketing must be done
to promote new or under used services, or, in the case of
mandatory members, to involve businesses that do not take
advantage of the services for which they are paying. While this reliance on business
participation can be a source of frustration, this experience has translated into years
of accumulated knowledge of marketing services directly to businesses.
~;~
! ~ ~! i ~ ~
Page 3~
OCR for page 62
Trip to less M~ketog
.
-
L rq1't*,~
A service frequently coordinated by many ridesharing organizations is the provision
of a Guaranteed Ride Home (GRH). With a GRH, the organization subsidizes a
service that will provide emergency travel for users of alternative modes.28~29~30
This gives commuters back some of the flexibility that they often lose when they
choose to use a shared mode. Some restrictions do apply (such as a limit to the
number of free rides that are available in a year), but the program does remove much
of the uncertainty associated with alternative modes. Commuters are not the only
~ ..
it_
in_
in_
~_L
P8gS3~
beneficiaries of GRH; companies also gain flexibility
because their employees are not held captive to the
~: schedule of their bus or vanpool.
| Marketing costs for ridesharing programs vary.
Surveyed organizations devoted anywhere from a few
thousand to over a hundred thousand dollars to
,,
marketing. Entire TMA budgets (including non-
ridesharing services) range from $15,000 to $150,000.
Amounts spent on marketing were heavily dependent on
available funding; budgets also dictated whether sales
duties were handled by specialized sales staff or by the
technical staff. The comprehensive marketing program
being undertaken by the Virginia Department of Rail
and Public Transportation to promote ridesharing and
other services has a budget of approximately $3 million
over about 5 years' with most of these funds being used
to cover the costs of research, development, and initial
implementation.34 This represents a top-down effort,
going through all the stages necessary to create an
effective marketing campaign (but not including any of
the resources required to sustain a marketing effort in
the long-term).
Experience among ridesharing agencies also indicates
that marketing ridesharing programs directly to
employers has been more effective than marketing
aimed at consumers, which supports the importance of
this type of marketing. In Seattle, where much of the
transit-to-business marketing effort is aimed at meeting
the Commute Trip Reduction law, a 1996 study found
that 46 percent of affected businesses are meeting their
1995 SOV (single occupancy vehicle) commuting
goals.32 Although not all of this is due to the
accompanying marketing campaign, it is felt that these
marketing efforts did have a positive effect on this
figure.33 In the Denver area, a survey conducted by the
Denver Regional Council of Governments found that 28
percent of SOV commuters are very likely to carpool if
they are provided assistance with rideshare matching.
The same survey found that approximately 20 percent of
these commuters are very likely to use transit if they are
OCR for page 63
offered a free pass, and 31 percent are more likely to carpool or use transit if a
Guaranteed Ride Home is provided from their place of work.34
Metropool in Connecticut conducted a qualitative telephone survey among the
Employee Transportation Coordinators (ETC) with which it does business, to
determine how they perceive Metropool and the service it provides. The results of
the survey demonstrated that MetroPool's marketing efforts not only increased the
attractiveness of alternative modes, but encouraged employees to consider using
alternative modes.35 This survey also showed direct benefits to employees from the
alternative mode programs for their employees. In particular, ETCs indicated
financial benefits to employees in the form of reduced wear and tear on automobiles
as well as other, more general financial savings. The possibility of a benefit related
to reduced stress and to helping the environment was also mentioned, but the feelings
about these positive effects were considerably weaker than the financial benefit.
Employers also felt that they benefited from participating in programs promoted by
Metropool, particularly in the areas of image, morale, and enhanced corporate
citizenship. Employers also gained more tangible benefits such as greater parking
availability for visitors, increased productivity, and reduced tardiness and
absenteeism.
general Transit Services and Employee Pass Programs
General transit services range from traditional rail and fixed-route bus service to
paratransit and shuttle services. Although these services are usually provided by
traditional transit agencies, they also can be provided by TMAs or similar
organizations. Transit services are usually funded by user charges, sales taxes, and
general government revenues. The rise of the private automobile has led directly to a
decline in transit's share of the transportation market. Transit agencies have
attempted to reverse these ridership and revenue declines by restructuring or
reducing services arid raising fares. Some, however, have also increased their use of
innovative marketing methods to retain existing riders, seek new riders, and meet
fare revenue objectives. Marketing to business is an important part of this new
marketing vision.
P8g0 3-7
OCR for page 64
Transit ~ - ~ M - ~ -
Table 3-2: Marketing and Advertising Of
Transit Services and Programs
Ililm
Materlals.
campal~ns,and
program
Baltimore
elev0'and
· Television,
· ~
rat lo, s1gnage,
print, and
direct mail
advertising.
Denver
Pae0
Television,
radio, print,
and direct
mail
advertising.
· Special
events and
Community
and internal
promotions newsletters.
· Portable ~ Special events
facility taken and
into ~promotions
community
l
· Employer
subsidy
program
Television,
radio, print.
Special
events and
promotions
· ECO
program and
employer
programs.
· Guide to
Ride, Class
Room Bus,
Convention
Center
Booth
· Internal
newsletter
_
9+
· Television,
radio, print,
car cards,
brochures,
direct mail.
Other
promotions,
marketing
research
Number of
0m'loy00s In
marks
sail
allvert~s~n'
Mark0t~ns
and
adverItlInD
budget
MarketIng
and
advertising
budost/total
o'0rat~ns
budget
8
4
7.5
1.42 Million
1.45 Million
1.5 Million
1.45 Million
0.75%
0.87%
1.03%
1.00%
Because of their size and stability, most urban transit agencies are generally able to
expend greater amounts on marketing than are the smaller ridesharing agencies and
TMAs. One transit agency, for example, estimated that it spent about $50,000 per
year to produce marketing materials, while its five account executives cost about
$300,000 per year.36 Whatever the exact amount expended, the larger transit
agencies appear to put significantly more effort and resources into marketing than do
Pag03~8
OCR for page 65
Transit-to~hms Mark0ffi 9
the ridesharing agencies and TMAs. These larger and more predictable expenditures
are still the norm even though transit has faced budget cuts on a regular basis.
However, there is a wide range in marketing resources between transit agencies.
Table 3-2 compares marketing budgets for selected transit agencies. These budgets
not only include marketing to business, but also what resources can be expected. For
the agencies shown, budgets range from less than l percent of total expenditures to
1.25 percent. A recent article in Urban and Transport News indicated that at least a
2 percent allocation of the budget for marketing was needed to increase ridership.37
The most popular program marketed by transit agencies to businesses is the
employer pass program. Employer pass plans have been used for over 20 years, but
have gained added attention in recent years as fares have risen and as the business
community's role in traffic reduction and air quality improvement programs has
expanded. Most agencies have a pass program in some form; in fact, at least 50 such
programs exist already, probably involving close to 20,000 employers. Basically, the
employee pass program extends the public retail sales network to private or limited-
use settings. Indeed, many employer pass programs began when transit agencies
sought to make their monthly passes easier for existing and potential users to obtain.
In this way, pass sales have become more convenient to the employees who
comprise a majority ofthe monthly pass market.
There are two major types of employer pass programs, although many local
programs share elements of both. The most common type is employer-haled sales,
in which the participating employer serves as a transit sales outlet for its employees.
Monthly passes can be sold at a company store, credit union, or cafeteria, or can be
handled by an office manager or transportation coordinator. Sales are usually limited
to monthly passes because weekly passes or tickets require an increased level of
administrative effort. The other major type of program is subsidized employer-basedf
sales, in which the employer not only sells the pass, but also provides a subsidy
(either as a flat amount or as a percentage discount) to the employee. Subsidies are
sometimes required by the transit operators, who will sell the pass at a discount to the
employer if the employer will then match that discount when the sale is made to an
employee. Federal legislation first codified transit fare subsidies as a "de minimus
fringe benefit" in 1984, but limited tax-free transit subsidies to $15 per month. An
IRS administrative action raised this level to $21 in 1991, and then the 1990 Clean
Air Act Amendments raised the benefit to $60 in January 1993 and to $65 In January
1 996.
Participation in employer pass programs tends to be limited to medium and large
businesses, largely because of the administrative effort required by the employer
(who must distribute the passes to employees) and by the agency (who must
distribute bulk passes to the employers). Participation can also be limited by the
complexity of the transit system institutions, with multi-operator transit systems
tending to be unsuited to employer pass programs (with some notable exceptions,
such as San Francisco, where a central clearinghouse for the different agencies'
passes was created). Also of note is that marketing an employer pass program
requires more of an or-going outreach program to potential businesses as opposed to
· < · e
a single, mayor campaign.
39
OCR for page 66
Trandt to ~ Marked
There are also benefits realized by the users, such as the increased convenience of
buying their passes at their work site, along with any subsidy provided through the
pass program. In general, pass programs appear to have a positive impact on
ridership, convenience, and cost. SEPTA recently conducted a survey of employees
in its ComPass program to determine the effect of its employee pass program on the
commuting habits of program participants. It distributed around 5,000 postage paid
survey cards to employees with their November passes. A total of 773 cards were
returned, which made a 15 percent response rate. Key findings included:38
· Prior to the ComPass program, around 63 percent of the respondents had
purchased another type of monthly pass. Around 35 percent had previously used
tokens, cash, or other payment form.
Marketing an
employer pats
program requires
more of an on-
goln~outreaeh
I proqramto
| potently'
businesses as
opposed to a
single, major
campaign.
· 19 percent said that their use of SEPTA for work trips increased since joining
ComPass, while 79 percent said their use had not changed.
32 percent said that their use of SEPTA for non-work trips increased since
joining ComPass, while 44 percent said their use had not changed, and 24
percent said they did not use SEPTA for non-work trips.
· 59 percent said that the ComPass program had a positive effect on their opinion
of their employer, while 39 percent said that their opinion had not changed.
· 55 percent said that the ComPass program had a positive effect on their opinion
of SEPTA, 43 percent reported no change, and 2 percent reported a negative
change in their opinion of SEPTA because of the ComPass program.
· 79 percent said that the ComPass program and SEPTA have made getting a
monthly pass easier.
· 64 percent said that the ComPass program had improved the cost of getting to
work.
Transit Voucher Programs
Transit voucher programs emerged in the late 1980's as a new way to gain employer
support for transit.39 Transit vouchers are generally limited-use checks that are
redeemable at transit sales outlets, and are often sold to employers who then give
them to their employees as a tax-free fare subsidy. Voucher programs can be
managed by local transit agencies, by regional planning agencies, or even by private
vendors specializing in this service. The introduction of transit voucher programs
has greatly expanded interest in the provision of transit fare subsidies, arid has
coincided with increases in the maximum tax-free transit benefit level allowed by the
federal tax code.
The transit voucher plan can be contrasted with employer-based pass sales plans. The
two products are very different, pursue different transit operator objectives, and have
different applicability according to city size and other local characteristics. For
Page 3-10
OCR for page 67
Tr~sit-to_8 Marked
example, a voucher program does not accomplish the pass or ticket sales function
because a rider must first redeem the voucher at a sales outlet. Voucher plans have
been less effective in smaller or less complex settings (i.e. where there is one transit
operator), and have been more successful in larger and more complex cities.
Transit vouchers are not only a new transit marketing product; they also have
precipitated the application of new transit marketing techniques. By making transit
subsidies as easy to administer as free parking, transit
vouchers offer an important opportunity to make
employer fare subsidies more widespread. While it
takes considerable resources to develop a new
subsidy mechanism and remain sensitive to employer
concerns, recent evidence shows that significant
impacts on market share are possible with such
payment techniques.
~ ~;';~'T'~:2:~'~'~:~
sit' j~.,: Erg-. I ,. , ., i ,,- , ,, :,.,;, - ~
DeRoF^~R~Rnc~nNGrR~ToPER~mRON~::: I, :~ ~I
'J'DC)LI~RS'£X~llY 815'00~. .'.~ ':.: -' ;.: ':' I: ': ' ~ ' ,
.. . ~ . ~ , ., ~ _, ~ :. . .- it, , -. .
my.,, i- ,.,. ,, ; ,., ,,. act,.;,: , , `.l,. ~\ ~ ~ - . . . ..
Transit voucher programs are by tare more costly to
develop and market than are employer pass programs.
In contrast to simply extending a monthly pass plan
to include employer outlets, vouchers are a separate
subsidy instrument and thus require new and unique
procedures for printing, issuing, tracking, invoicing, and other functions. In some
cases, program administration has been absorbed by existing staff. However, if
significant market penetration is achieved, order processing requirements can grow
exponentially. In at least two cities, the initial program frameworks had to be
redeveloped to accommodate even modest levels of participation.
Program set-up costs for the private services available have ranged from $30,000 to
$50,000, but this includes limited marketing or local staffing support. Most of the
cities that have initiated voucher programs have used federal or state grants, typically
greater than $100,000, and some have used additional grants for program expansion.
Another key cost parameter is employer fees. Given the appeal of the program and
the tax benefits provided, many of the local programs use employer fees to defray
program costs. Some of the programs (those in smaller cities, and those operated in-
house) do not use these, however. Given the printing, processing, banking, shipping,
and other costs associated with the vouchers, employer fees are likely inevitable as
soon as the program gains significant market penetration. Typically, fees are
approximately 3 percent of face value (New York's are 4 percent), and a nominal per
order shipping fee is also often applied. Once the program has expanded from start-
up levels, it can become self-supporting, which is attractive to cash-strapped
agencies attempting to provide fare subsidies.
A number of studies in cities such as New York, San Francisco, Washington, and
Milwaukee have specifically catalogued the benefits of transit voucher programs on
overall transit use. These benefits vary by location, level of subsidy, fare structure,
existing ridership, service level, parking availability, the required co-payment, and
several other less significant factors. In New York City, three studies have been
performed to measure the impact of the TransitChek program.40 The first study,
completed in 1989 when the maximum subsidy level was $15 per month, surveyed
~.~ N~
:.-. .. :! ·_ ~_~:~_~.-:'-~. ~8,.~_.,J`~__-~,.._~`,-.' ::-.
Page3-n
OCR for page 70
Transit I'm Bus H - sang
Funding for a number of these programs comes from grants to
encourage innovative services or to reduce air pollution. 2 Some of
| these grants have paid for marketing while others have not, making it
difficult to identify the actual costs, particularly when marketing
becomes a secondary activity.
1
~lri~',''lle~',~,n,~
I:
~:'
r
[ate Night
Transportation
Mel
1\ I'`'o ,\1:~>r' r, `~, rams 9~) l)~'r'.~ tt,'ct;~]J''il~t~liti
P" ~
| Key factors that have determined marketing strategy and techniques
| used in various cities include available staff and budget resources, the
| level and type of support from participating transit operators, and the
| overall priority assigned to making the program grow. In general,
| though, most organizations have used direct mail and telemarketing to
| make initial contact and to provide clients with more follow-up
| information, while the use of business databases to segment the
| market and to target potential customers has been particularly
effective. 28929946 Organizations also use newsletters, informational
pamphlets, and special promotional activities first to entice
~ companies, then to keep participating companies informed. 4~40 Also,
| a number of organizations stated that networking and word-of-mouth
| were the two most successful marketing techniques they had
employed.47'48
Most organizations seemed to agree that the personal contact that is
possible through personal selling and networking is more effective at
generating a response than direct mail or telemarketing, although the
costs of face to face sales are considerably higher. Some sales staff
also make personal sales visits and provide on-site services to plan
and implement promotional programs for transportation services.
Seattle Metro uses two levels of marketing personnel to promote their
transportation services. The first level, called Employee
Transportation Representatives, are the front-line sales force, which is the initial
contact to employers. This first level also works with employers to help them decide
which services to use. Once an employer is involved with Metro, individual
technical specialists are available to assist in implementing particular services on the
nuts and bolts level 13.16,26,27,49
A number of transit providers also market their programs and services by networking
with politicians and business leaders, using existing and new relationships to make
businesses aware of available products. Some agencies have found success by
holding breakfasts and luncheons for participating businesses, primarily to recognize
achievements, but also to give business leaders an opportunity to interact with
representatives from the local transit agencies. Business associations and chambers
of commerce also have been effective conduits for making businesses aware of
transit services. Many providers also develop networks of what are often referred to
as Employee Transportation Coordinators (ETCs), who function as representatives at
an employment site, and encourage their fellow employees to use the various
OCR for page 71
Tra~t-to_' Ma~ke~ng
.
services offered by the transit agency. Some agencies even offer programs for
employers and employees to familiarize them with transit services and to provide an
overview of possible benefits created by the use of public transportation.
Transit agencies also use television, radio, and print advertising to publicize their
products and services. ]]'43 Some providers also utilize a wide range of promotional
materials to advertise their messages, including newsletters, handouts, seat drops,
videos, and pamphlets. Media advertising, including radio, television, outdoor, and
print are also popular with agencies. Many transit providers have an inherent
advantage when advertising since the vehicles and facilities often provide an ideal
location for advertisements. A number of transit providers also have branched out
onto the Internet, but it is still unclear whether or not this is in an effective strategy,
particularly for reaching the business market.
One example of a comprehensive marketing approach is at the Virginia Department
of Rail and Public Transportation (VDRPT). The department embarked on a multi
year program to develop a campaign to market public transportation services
throughout northern Virginia. The VDRPT campaign will develop a comprehensive
marketing strategy based on market research of area businesses. The program started
from scratch, which allowed this basic market research and focus groups to drive the
marketing campaign design. This process allowed VDRPT first to identify the
transit programs most important to businesses, and then to develop a campaign to
make companies aware of these services. The marketing campaign strategy has
focused on the use of personal selling by representatives from the TMAs and
rideshare agencies in the area, with some use of direct mail to make initial contacts
and to publicize programs to the general public. A Guaranteed Ride Home program
also will be developed, mostly because the businesses surveyed stated that this was
an element that could make transit more attractive to them and to their employees.
The campaign also includes full-page ads in the business press as weir as ads on local
CON broadcasts. There also will be breakfasts held at the Washington Press Club
for CEOs and political leaders, along with the development of a speaker's bureau
that will organize presentations to publicize the program. ''
Table 3-3 summarizes the different marketing approaches used by transit
organizations for various programs marketed to businesses.
.
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Page 3-16
.
.
.
.,
Tran~tto _~ Marking
Table 3-3: Summary of Transit-to-Business Programs
... -
~i [vaoofProDr~m
;._ ... . .
[~iC91 ~rkotin, Robots
MsrkotiD~ [o~hRi~os mod
~-
,% RIdesharInD
..
i
:)
-
:1
-
,
'!
-
q
J._
~ TransIt
,`
~ Vouchers
&
;!
I'
i, _
Reverse
~ commute
I, S0r'1ess
Can vary from $2,000 to $300,000
Employer fees also may be used to
help dehay program cost.
Mark0~leo Directed Towarl! Employer
· Direct mail and telemarketing
Meetings, seminars, and other promotions
Use of affinity groups and peer-to-peer selling
Ad campaigns
Mark0~leg DIr0GI01 Toward Employees
· Transportation fairs
· Newsletters, videos, and other promotions
· Employee Transportation Coordinators (ETCs)
- Guaranteed Ride Home (GRH)
. .
-
general TransIt
ServIces and
Employee Pass
Programs
Survey has obtained figures ranging
from $50,000 to $300,000 per annum
_
_
.
· Marketing through business associations and Departments
of Commerce
Marketing D!reet01 Toward Employers
· Direct mail and telemarketing
· Person-to-person contact
· Networking
Marketing DIrect01 Toward Employees
· Empoyee passes sold at a company store, credit union, or
cafeteria, or coordinated by an office manager
· ETCs
Marketing Dlreeted Toward Employers
· Direct mail and telemarketing
· Person-to-person contact
$30,000 to $50,000
Employer fees also may be used to
help deRay program cost.
.
Group seminars
Marketing Directed Toward Employees
· Press conferences
Ads in bus schedules
Handouts in transit stations
Station posters, electronic signs
Seat drops
Media advertising (in urban centers)
Co-marketing with related activities
Program sponsorship by television stations
$10,000 to $15,000 set up costs
Marketing Directed Toward Employers
· Direct mail and telemarketing
· Public advertisements
· Promotional programs
Targeting of companies moving to suburbs
.
.
1
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Trandt-~_s Masking
Game
Mass Marketing
Even when the target of a marketing campaign is business, mass marketing may play
a role. For example, the New York/New Jersey Port Authority believed that transit
vouchers were a classic business-to-business product, and that the primary market
was medium and large employers. This led them to use direct mail to employers
with appropriate Standard Industrial Classification (SIC) Codes. The results were
quite good, but, unfortunately, the success came at a very high cost. Paid advertising
in business publications yielded a very poor response, even when ads were included
in special issues focused on employee benefits.
As the program expanded, and as the high level of interest among small employers
became evident, more cost effective mass-market communications techniques were
used. It became clear that the best way to reach the huge market of small employers
was by communicating with the even larger market of transit users. Increasingly,
rider-driven methods such as bus and train posters, hand-outs and take-ones were
emphasized. It was seen that a critical factor driving employer enrollment in any
new benefit plan was the demonstration of employee interest in the program. This
was in fact revealed in a series of focus groups with personnel and benefits
administrators that helped frame the development of the New York program.
Using transit riders as an effective sales force has succeeded repeatedly in other large
cities. These cities have extended rider-based methods used in New York to include
actions such as ads in bus schedules, handouts in transit stations, electronic signs,
station posters, and seat drops. Incentives also have been used to reward driver
hand-out efforts, such as those used by Denver RTD and AC Transit to market their
Commuter Check programs.
1
Perhaps because of these socio-economic factors, it is notable that rider-driven
methods have been effective only in larger cities, and of limited impact where transit
has a small market share (Louisville, Buffalo, Norfolk). In smaller cities where bus
riders could not be effective advocates for the program, the rider-driven method has
not proven successful.
Target Marketing
As outlined in the previous chapter, target marketing, also known as segmentation,
groups employers with similar characteristics. ~ Databases are an easy and often
inexpensive way for organizations to generate lists of target businesses.
Pageant
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Tr~Marketeg
~ · ~ - ~ ~ ~ ; \ I; · >~ , i, -
.>' ~ ~ ~ ~ ~ ~ '. ~ ;'~ ~ ~ . . " ~; ' . ~
Fit
Many transit organizations use internal databases
created from years of experience working with
employers, while others use commercially
available databases such as those published by
Dun & Bradstreet to reach smaller employers.
36949950 The most popular employer listings,
however, are available from databases created in
response to the now defunct Employee Commute
Option (ECO) provisions of the 1990 Clean Air
Act Amendments.51 These databases provide
information about the initial targets of the ECO
program: employers with more than 100
employers at a site. The ECO databases are
sometimes out of date, but nonetheless provide a
good starting point, especially since many
agencies are already aiming at employers ofthat
size. Some agencies (particularly those that have
been in operation longer) will maintain their own
database.1'52 Seattle Metro targets employers
that are not meeting the goals set out by the area's Commute Trip Reduction (CTR)
law for special marketing efforts, with the intent to aid them in meeting their goals in
the future.
Other unusual targeted marketing has been implemented in California and Florida.
The San Diego Association of Governments designs potential vanpool routes, and
then identifies major employers along the proposed route. These employers are then
contacted directly and asked if they would be interested in encouraging their
employees to participate in the proposed vanpool. 26 The Miami Beach TMA is
marketing a new shuttle service directly to the hotels and attractions in the area,
which will then market the service individually to their guests as an alternative
means of traveling to tourist sites. 28
Given the somewhat limited market for reverse commute services, good market
research and clear targeting are essential. 2 In the case of Pace in Chicago,
aggressive marketing to companies relocating to the suburbs has encouraged
participation by employers and riders who might not otherwise use transit. By
working in partnership with these companies, Pace has been able to develop
innovative new services that meet the needs o! employers anti employees. 46 First,
Pace watches the business press to identify companies relocating to the suburbs.
Pace then attempts to work with the relocators to provide reverse commute services
(including f~xed-route bus, subscription bus, and vanpools) for employees who live
in the city. Pace also uses its sales representatives to make presentations and to
distribute promotional packages to suburban employers who are potential candidates
for service. The Indianapolis Public Transportation Corporation operates a set of
reverse commute services known as MetroWorks, which were created and funded in
partnership with suburban businesses that require more late night service to their
locations. MetroWorks has been marketed using direct mail targeted at ZIP codes in
the areas where service is provided. A representative also stressed the importance of
, ~ ~. ~. . . ~. .
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Tr~t-h^ - as Mark08ng
positive coverage, both in the regular and business presses, as a means of attracting
businesses to the service.25'53
The most important rider segments for the reverse commute are service industry
workers who live in inner-cities. Much of the growth in service industry jobs has
taken place in the suburbs. However, many of the potential service workers still live
in the inner-city. In many cases, suburban employers such as restaurants, hotels,
stores, and hospitals are desperate for employees but cannot find people who are
properly trained. Many reverse commute service providers have capitalized on this
underserved market by identifying and contacting training programs, and by
coordinating transportation for trainees traveling to training sites.
Pace is involved with a Chicago-based organization known as Suburban Job Link,
which trains inner-city residents for jobs in the suburbs. Pace provides transportation
to the Suburban Job Link offices, as well as to job interview sites. Once a participant
has a job, Pace will then transition the worker into a different, more permanent
reverse commute service. 46 Accessible Services, Inc. (ASI), a private reverse
commute service provider in Philadelphia' works in conjunction with a recruiting,
referral, and training organization to train employees and then to transport them to
their jobs. ASI was able to convince employers that this program would save money
on labor access, recruitment, advertising, training costs, and even on general taxes.
This partnering between ASI and a training organization appears to have been quite
successful, as many employers have proven willing to subsidize the service and to
hire people from the training site.22
Finally, transit voucher programs have had success segmenting the market to target
small businesses and infrequent riders. Smaller companies have been very receptive
to voucher programs, requiring marketers to give them special consideration when
developing marketing plans. Infrequent riders also make up an important enough
segment of the transit voucher market to demand attention. These riders can take
advantage of the subsidy without needing to purchase a pass, resulting in an increase
in transit use by occasional riders. Voucher programs in San Francisco and Boston
also have observed that marketing efforts focused on higher-income and more
suburban riders are the most effective. These users seem to both better understand
the fare subsidy program and are more willing or able to advocate for the program to
their employers.
;
Personal Selling
Any event at the employer site is the result of an employer outreach program, where
an agency will make efforts to contact the employer and set up a meeting or even a
transportation fair, rideshare campaign or lunchtime transit information booth.
]330332~34 In Chicago, Pace works with real estate agents to encourage transit use at
existing multi tenant facilities and to encourage future, transit-hiendly developments.
Pagers
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11
A skIlIfu! sales
force Is
extr0m0'y
Important to
expIsIn the tax
ISSUES CODD0Ct86
with Subsidy
programs for
employee
transportation.
. .- lo
Tram to _'Malk8ff~
29 Seattle Metro organizes network groups through which employers with similar
characteristics in the same geographic area are presented with product information
simultaneously. By speaking to a number of businesses at the same time, the agency
can justify more frequent interaction with employers, leading to an improved
working relationship. ]3
· Sabs Fores - A dedicated non-commissioned sales force is very helpful for
fostering interest in a service and for explaining the finer and more complex
points of the program. For example, a sales force can discuss the relatively
complicated tax issues at whatever level of detail is required. Employers are
always most interested in the ways that they might provide the transit benefit at
no added cost, and a sales force helps explain how this is possible. Experience
suggests that the stature of the salesperson is another critical factor in a
successful campaign. In Des Moines, for example, a retired senior executive
who worked temporarily for the MTA and who was well known in the business
community, was an integral part of gathering employer support for transit. This
individual had ready access to the senior decision-makers and was effective at
persuading them to participate. In another city it was mistakenly assumed that a
junior staff person could pursue the employer-based sales as a short-term project;
very little was achieved until more senior staff began to focus on the program.
Simply stated, the skills of the messenger are extremely important in selling any
program.
· Reworks' - Networking with business leaders is another marketing technique
used by many transit organizations. In some cases, this takes the form of
directly contacting business leaders (sometimes using political or community
leaders as an initial contact to reach the business leader).52 In other cases,
agencies will coordinate meetings, seminars, and workshops at which potential
participants can hear about the positive experiences of current participants, as
well as general information about particular services. ~ This type of personal
contact at higher levels of management provides information to individuals with
the power to make the decisions necessary to involve their respective businesses
in a given program. Almost every ridesharing agency that was contacted noted
that these political and business networks are an extremely important element in
marketing transportation services to business, and are an effective technique for
encouraging business to participate.
· Personal M0lit Age with DeelstnMakers - Personal meetings with decision-
makers at the employment site is an extremely important aspect of the marketing
campaign because this is oRen where employers will make final decisions about
whether or not to participate. Different agencies use different techniques for
making direct contact with employers, depending mainly on agency size and
funding. Poorly funded, smaller agencies will tend to have their technical staff
become ridesharing sales people by having them make the initial
presentations.31'32'54 Agencies with greater resources tend to have a dedicated
sales staff, usually known as account representatives or account executives. ]'30
This staff is in charge of all sales contact with potential customers ranging from
the initial mailing or phone call all the way to the decision to participate. Once
an employer has agreed to participate in the program, the sales force will act as a
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Tra~t-to~insss Marlt08rq
ridesharing resource, usually by answering questions, organizing events (such as
a transportation fair), and keeping employers aware of new developments
through regular mailings and phone calls.
· A Transportalbn Fab. - One of the most effective marketing techniques used by
transit organizations is the transportation fair, similar to the "health fairs" used
by health insurance industry. For a transportation fair, a transit organization will
arrange to set up a series of displays and information booths for employees at a
particular location, usually in a building lobby or cafeteria. The displays will
provide information about the various transportation services and their potential
benefits to the user and to local communities, and can include items such as bus
schedules, rideshare matching sign-up, information on biking or walking, or
pollution reduction brochures. With recent advances in portable computing, it
has even become possible to perform rideshare matching functions during the
fair by showing employees various ridesharing possibilities. Fairs are always
coordinated with the employer, and are thus an effective method for getting
employers involved in encouraging their employees to use transit services. in
order to set up a fair at an employment site, though, a transit organization must
deal directly with a decision-maker within the target organization. 32
· hophye0 Trough R0prssentauves - Many TMAs market their services by
training and supporting a team of Employee Transportation Coordinators
(ETCs). ETCs are full-time, part-time, or volunteer workers (with a salary paid
by the employer, not the TMA), who are located at an employment site and act
as a central clearing house for all information about transportation plans and
services. The ETCs are an on-site resource to management and employees, and
help market the services provided by the TMA and other alternative
transportation providers.4'8'9'26'55
Transit Courses - In Phoenix, the Regional Public Transportation Authority has
found success in running introductory, so-called "Transit 101" classes to
introduce employee contacts to riding public transit. This gives employees an
opportunity first to gain experience with riding public transit, and then to pass
that experience along to co-workers. 29 By providing this advice and guidance,
the Authority is able to encourage increased public transit usage while at the
same time training more knowledgeable transit riders. A Washington, DC,
program operated by WMATA also has relied on group seminars to explain
employee pass programs to interested employers. This seminar technique has
helped the program capture an important segment of the larger employers while
station and vehicle ads have reached smaller employers.56
P0er-h~0er Sabs - Such groupings encourage businesses to share experiences
and to offer advice. These groupings are also effective because they place
experienced users in the position of selling ridesharing to other businesses. This
type of peer-to-peer sales is a proven strategy that encourages participation. 30
Use of Dals - Some transit providers have used computer models and data to
demonstrate transportation problems to business leaders. Near Tampa, Florida,
-
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Tat tO - 1~88 MBrk0ffll9
the University North Transportation Initiative has used sophisticated statistical
and geographic information system (GIS) data to show business leaders the
depth of the transit and traffic problems they are facing, and to encourage them
to buy into the solution process. 4° These kinds of visual aids encourage
employers to take a proactive role in giving their employees incentives to help
solve these problems. Computers also can be used to demonstrate new services
(and their attendant benefits) which, again, encourage businesses to take a role in
supporting alternative modes of transportation. '°
· IB~Drl8O' B0IW008 P~BmibDS - Cities with fewer resources have sought to
integrate voucher program marketing with related activities. TMAs, for
example, can actively market fare subsidies along with rideshare services and
other TDM activities. The San Francisco Commuter Check program had
marketing support from RIDES for Bay Area Commuters (the regional
ridesharing service), which promoted the program through its general employer
outreach and local TMA support efforts. Connecticut's Metropool and Long
Island's Ride sharing also have promoted the voucher program TransitChek in
the New York suburbs.
Advertising Techniques
The most common advertising techniques are still print ads and broadcast media
spots. However, a number of other techniques are used to market services,
including monthly or quarterly newsletters, 34 videos promoting products and
services, 30 and special promotional efforts such as prize giveaways and letters
aimed at employees. ''32 Most general advertising is aimed at employees, often
so that an employee will convince his/her respective company to enroll in a
transit program.
Some organizations have been quite creative in advertising their services, and have
even designed their own innovative campaigns. The TMO Metropool, in Stamford,
Connecticut, is planning a campaign modeled after the "Dewar's Profile" liquor ads;
the first series is scheduled to appear in area business magazines. The ads will
encourage employers to participate in transportation-related activities by providing a
flattering profile of an area employer who has encouraged the use of alternative
modes at hisser place of business. After businesses express interest, Mefropoo! will
send its account executives to work on-site at employer locations to provide
information about different transportation services and to help them develop
transportation management plans. 9
Media advertising also has been used in many urban centers. The Chicago
transit agency responsible for voucher programs blanketed the city with radio
ads targeted at the non-rider market segment. However, research into the San
Francisco Commuter Check program found that high frequency transit riders
were far more likely to seek information on the program and to solicit their
employer's participation than were infrequent transit users. 22 While auto drivers
are the ultimate target of a subsidy program, the key action that must occur is
obtaining employer enrollment, because this is what leads to modal shifts. As
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Tr~t-to_; Marketing
auto drivers are less likely to advocate for the program, directly marketing to
them has not proven effective in motivating employer enrollment.
A different and notable application of media advertising is program sponsorship.
San Francisco, Boston, Philadelphia, Louisville, Buffalo, and other cities have
gained free or discounted television advertising for their voucher programs in
exchange for crediting the television station as a sponsor. The mass marketing
and product validation has considerable value to the local television stations
(who have their call letters on program brochures, flyers, and posters). A San
Francisco-based transit voucher program used sponsorship each time it reprinted
materials, and has even involved the local CBS, ABC, and Fox affiliates.
Publicity and Publie Relations
· PrBlS lODf0r0BC0S- Press conferences can be an effective technique for
generating broad-based interest In a new program. For example, greater impacts
(measured by inquiry responses and resulting enrollments) for a transit voucher
program came from a well-orchestrated introductory press conference staged in a
New York City subway station. The press conference generated excellent
coverage by the local press and sparked many inquiries from employees seeking
to involve their respective companies.
· Pubs R0cognfflon - A Seattle-based transit agency makes a point of publicly
recognizing outstanding employers who use their services, thereby publicizing
both the services and the businesses that use them. These public recognition
ceremonies and awards also give other businesses an incentive to become more
involved. 43
1
HE
In an effort to compete with the private automobile, transit increasingly has
focused on marketing to communicate the value of transit to both the consumer
and the employer, and to advertise the variety of new transit services now
available. The following table summarizes general (non-statistical) conclusions
about the applicability of transit-to-business marketing programs by city size.
San Francs.
Boston,
PhIIall0lphIa,
tou~sv'''0.
Buffalo, and other
cities have gained
free or
dlscount0d
television
adverIlsIng for
their voucher
programs In
0xehang0 for
cr0dItInq Ib0
T0~0vIsI0n station
as a sponsor.
P8g0 3-23
.
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Tout ~ ~ M - ~ -
Table 3-4: Transit-to-Busin0ss Program Effeetiveness by Area Size
at_
-
_=
-
-
A review oftransit's ridesharing, transit voucher, employee pass, and reverse
commute programs are a testament to transit's marketing successes. Yet transit, as
an industry, is still relatively new to marketing to business, and could certainly learn
from other sectors that have adopted effective (and transferable) marketing strategies
to better compete in the marketplace. The following chapter details the experience of
six of these industries, as well as the possible lessons to be learned and applied by
transit agencies to transit-to-business marketing.
Page ~
Representative terms from entire chapter:
transit agencies
