National Academies Press: OpenBook

Marketing Transit Services to Business (1998)

Chapter: Chapter 3

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Suggested Citation:"Chapter 3." Transportation Research Board. 1998. Marketing Transit Services to Business. Washington, DC: The National Academies Press. doi: 10.17226/9437.
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Suggested Citation:"Chapter 3." Transportation Research Board. 1998. Marketing Transit Services to Business. Washington, DC: The National Academies Press. doi: 10.17226/9437.
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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-]

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

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

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

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~

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

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

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

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

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

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

Tra Sit to ~8$ Mark0ffql employees from the first 500 companies to enroll. This study found that transit use rose by 17 percent and auto use decreased by 16 percent. A second study was completed in l 990 and assessed the impacts at one major employer, The Port Authority of New York and New Jersey, using the same methodology as the first study. This second study corroborated findings from the first survey; transit ridership rose by 22 percent for commute trips and 21 percent for non-commute trips, while auto and taxi use fell by 23 percent for commute trips and 21 percent for non- commute trips. About two new transit trips were created each month for each $15 voucher redeemed. The third study, completed in 1994, used a more complex survey and refined methodology to poll a broader sample. This expanded study took place after the maximum per-month tax-free subsidy was increased, and found the following results: · ~ 1.6 extra one-way transit commuting trips were being taken by the average TransitChek recipient each month. 8.7 extra one-way transit non-commuting trips were being taken by the average TransitChek recipient each month. ,~ ~ Row York~s 1' T~ IranstIChek JO program it ~ller0ll0d ,`t 'i~ Eldership by ,' arollell 20 21 percent at partlelpating l l .' 0mp'0yer~. · Friends and family of TransitChek recipients were found to be taking 7.2 extra trips each month. In Milwaukee, where vouchers are sold in denominations ranging from $7 to $28 per month, the Milwaukee County Transit System (MCTS) has tracked transit voucher impacts at four employers, each with different subsidy levels. At a downtown bank that subsidizes just $7 a month, MCTS found ridership grew by 16 percent, while at a medium-sized law firm subsidizing $14 a month, ridership grew by 26 percent. At a major utility where a $21 monthly fare subsidy was introduced along with a rise in parking costs from $20 to $40 per month, transit use rose by 81 percent. Finally, at an insurance company that began a $21 monthly fare subsidy during a time of increasing employment, transit use rose by over 80 percent. A 1995 Metropolitan Transportation Commission study of Bay Area employees receiving transit vouchers produced the following results:42 · About 1/3 (31 percent) of the employees receiving Commuter Checks noted increased transit use (averaging 3.24 new transit trips per week), for both work and non-work purposes. · It was estimated that in 1994 the voucher program eliminated 17 million vehicle miles and 61 million tons of pollutants, and generated $1.6 million in new transit revenue. 79 percent of the respondents noted improved opinions of their employer as a result of receiving vouchers, 35 percent noted reduced stress from not driving to work or driving less oven, and 33 percent said job satisfaction had improved. Smaller improvements in on-time arrival and productivity were also noted. P8Il0 3-12

Tram s Marks In the Washington area, WMATA research showed that over 24 percent of the participating private sector employees had switched to mass transit as a result of transit vouchers,43 while a General Accounting Office study of federal employees showed a 21 percent modal shift from private autos to mass transit as a result of transit vouchers.44 Reverse Commute Services As suburban jobs have grown in recent years, there has been an increased need to provide service from cities out to the surrounding suburbs. Many suburban workers cannot afford to live in areas close to their job sites, so they need transit service from their city homes to their suburban jobs. This has created a need for reverse commute services, so-called because they move people in the direction opposite to traditional public transit flow. This need has beenaccentuated in recent years because of the welfare reform movement, which is requiring many adults currently on welfare to find work. Organizations providing reverse commute services include transit agencies and private non-profit human service agencies. Service can be provided using regular transit buses, paratransit vehicles, vanpools, or other alternative modes. These services can often be difficult to operate because of the dispersal of businesses and the poor accessibility in suburban business locations. The high turnover common in these jobs is an added challenge to providers. Coordination is also an obstacle to service provision since many routes are operated by organizations unconnected to the main public transportation entity in a region. The real benefit of this service is that individual service provision allows for more flexible operations that meet the needs of this somewhat unique market. As with ridesharing and employee pass programs, it is difficult to ascertain the exact dollar amounts spent on marketing reverse commute services. In the case of transit agencies that are running services, reverse commute marketing costs have not been separated from general marketing costs. In the case of smaller public or private sector services, the marketing costs have not been separated from the general costs associated with planning and operating the service. In Indianapolis, it was estimated that between $10,000 and $15,000 was spent on promoting the initial startup of the MetroWorks program. Of this, about $2,500 was spent on telemarketing used to identify businesses that were interested in participating, while the remaining budget was spent on brochures, posters, and other promotional materials.45 P8gB 3-~

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

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. . Page 3-15

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

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

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 , ~ ~. ~. . . ~. . Page3-18

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

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 Page 3-20

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, - Page 3-21

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 Page ~

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 .

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 ~

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