Management & Operations

How to Build Ridership Through Individualized Marketing

Posted on February 1, 2004 by Kristen Force

Individualized, targeted marketing has been an effective, albeit expensive, method of putting more choice riders on buses in Portland, Ore. The concept will be tested at four other U.S. transit agencies with the support of the Federal Transit Administration (FTA). The idea originated in Europe and has been successful for transit agencies as far away as Australia. Founded in Munich, Germany, the marketing program, called TravelSmart, focuses on the specific needs of each community member. The program uses survey techniques to identify individuals who are interested in learning about ways to change their travel behaviors. Members of the targeted community are mailed flyers asking if they would like information about alternatives to car travel and if so, which options they want to learn more about. This allows the transportation authority to tailor the information to the individual’s needs and wants. The program is based on the theory that people are more likely to try something new if it fits practically into their daily lives and improves how they do something, such as traveling. Car usage curtailed The International Public Transportation Association conducted a program in Europe involving 45 transit agencies in 13 countries. The results were excellent. With car usage dropping an average of 10%, the association concluded that individualized marketing helps people view public transit more favorably. Individualized marketing was also attempted in South Perth, Australia. With a sample population of 35,000, car travel saw a 14% reduction, with increases in biking, walking and transit usage. These promising international results prompted the city of Portland’s Transportation Options Division to implement the TravelSmart project in one of its service communities. In September 2002, Portland’s southwest neighborhood of Multnomah Hillsdale was targeted to test the effectiveness of individualized marketing in the United States. The criteria used to select a viable area for the test project included alternatives to car travel already in place, a population willing to consider making changes and a relatively close proximity to economic areas, according to Lavinia Gordon, project manager for the city of Portland. “Multnomah Hillsdale was not my first choice because it is hilly and hard to bike,” says Gordon. “But it was a good challenge for us.” The targeted neighborhood has a population of 14,000 with a median household income of about $50,000. It is a suburban area with a majority of single-family homes rather than a dense urban environment. Gordon says it was attractive because it had a good transit system that was being under-utilized and town centers nearby with wide-ranging appeal. Effort supported by grants A regional Congestion Mitigation Air Quality grant awarded to the city made it possible to try TravelSmart, in addition to financial contributions from Tri-County Metropolitan Transportation District of Oregon (TriMet), the regional transportation agency. Each contributed $75,000 to the project for expenses involving the survey mailers, manpower and compilation of statistics concerning long-term sustainability. Socialdata America was contracted to oversee the project — with city staff members contributing time and materials. Portland’s history of support for alternatives to car travel made it a desirable location to conduct this pilot project, according to Kim Duncan, executive director of marketing and customer service for TriMet. The city is located in the 27th-largest transit region and has the 13th-largest ridership. Portland covers a three-county area with a population of 1.5 million. Conducting an initial survey of the target population is the first step in the individualized marketing process, explains Gordon. The intent is to identify individuals interested in receiving more information about public transportation and to get a feel for where and how they currently commute. Those who do not respond or do not express interest are not contacted again. 65% respond to survey Portland received a 65% response rate to the mailed surveys sent to 1,200 randomly selected households. “We were concerned that the mailers might be ignored, but we were happy with the amount of response,” says Gordon. To maximize the response rate, the surveys were designed to be simple to complete. Additionally, staff members followed up with phone calls to encourage people to respond, she adds. The results of the initial survey paved the way for the individualized approach intended for the project. Packets with maps, rates and schedules were created based on what each person wanted to know more about. “If someone wants to know about public transit, we include the closest stop, the time of arrival and the cost,” says Gordon. Personal touch recommended Hand-delivering the information can be beneficial to learning more about the participants on a personal level. “In an in-home visit you can do an analysis: ‘Oh, you go to work every day at 9 a.m. Did you know you have a bus two blocks away that arrives at 8:45 a.m.?” You can work people through to let them know what is available,” says Duncan. Those already using environmentally friendly modes of transportation were given an umbrella as a gift, and all participants received a key chain and a refrigerator magnet. The first follow-up to the project was conducted in May 2003. It was found that car travel had decreased 8% and walking, biking and transit use had increased 27%. This was attributed to making interested community members more aware of options available to them and making them feel comfortable taking advantage of these methods of travel, according to Gordon. The final results of the project were collected and analyzed in January 2004, showing a 9 percent reduction in car travel. Gordon says the city plans to launch a larger TravelSmart project in the spring in conjunction with the opening of a new light rail extension. “We learned that direct marketing to affect travel behaviors is as effective as direct marketing to create consumer demand in anything,” says TriMet’s Duncan. “If you can get in front of people, if you can create information designed exactly to meet their needs — you can be effective,” she explains. Duncan adds that the real challenge of individualized marketing is controlling the costs. “We know that it produces results, it’s just finding ways for public agencies to come up with the money. I know that the city of Portland and TriMet don’t have enough money to continue direct marketing without grants.” FTA will provide support The FTA is furthering the idea of targeted marketing by undertaking a research demonstration program to test its feasibility in four U.S. cities. By teaming with transit agencies and local governments in diverse areas, it is the administration’s hope that models can be provided for transit operators nationwide, says Tina Burke, FTA spokeswoman. Applications for selection as one of the four trial cities were submitted in January, and those chosen will be announced in the coming months. Cities will be chosen based on a range of criteria with a strong focus on the value of the project as a national model, Burke says. In addition, the transit agency or city must dedicate some staff to work on the project and show that partnerships have been established within the community. Coordination is required “The ability to coordinate with others is a must to maximize the benefits,” Burke says. “This project must also fit into the overall strategic approach and goals of the agency. We certainly hope that agencies all across the country have the goal of increasing ridership.” The appeal of the program is its ability to attract more riders without having to add new services or routes. The focus population is the citizens who rely on cars but have public transportation available — in other words, choice riders. Funding will come entirely from the FTA, including the contracted services of MELE Associates and Socialdata, collectively referred to as the FTA Team. This team will form a partnership with the local transit authority and other local participating organizations and will be responsible for overseeing the marketing campaign. Furthermore, the FTA Team will provide data from before-and-after surveys in a control group intended for comparison with the results obtained in the target group. All collected data will be analyzed and presented in the form of “best practice” suggestions for each location. Although officials in Portland found cost to be a major factor in carrying out the project, Burke says the intent is to make this marketing technique affordable for all agencies. “The basis of this is that you don’t have to make capital investments to increase your ridership,” says Burke. “In many ways this is a low-tech, low-cost way to increase transit ridership and heighten the awareness of the benefits of transit.” Better than a billboard Burke adds that addressing people’s real needs, such as having the correct transit schedule and being informed about commuting options, can produce better results than a radio commercial or billboard. Mass marketing may reach more people but is not necessarily more effective, she says. Duncan agrees and says you must weigh the cost and impact of each marketing strategy to determine what is most effective in your service area. “With targeted marketing you may be able to control your outcomes more, but you are spending considerably more per gross impression,” says Duncan. “You just have to decide if the amount of change you can effect is the same. It’s classic marketing; it doesn’t matter that it’s a public agency.” Side benefits touted Reducing car congestion not only helps the environment, but can benefit an individual’s physical health as well. The nation’s obsession with weight loss as obesity rates continue to rise can be used to a transit agency’s advantage. “We really think public transportation has a role to play in increasing the health of our citizens,” says Burke. “Valuable exercise can be gained by walking to the bus stop or learning where walking paths and bicycle lanes are.” Convincing people to give up their cars, even for a few trips a week, requires a persuasive argument. All the benefits and advantages for the commuter must be prominent and continually emphasized. Potential riders need to know that public transportation can be convenient, less costly, more environmentally friendly and better for personal health. This project suggests that an effective way to market these assets is to approach community members individually and tailor service information to their specific needs. “It is our intention to make the findings [of this project] available so cities and transit agencies around the country can create their own programs using an individualized marketing approach if it proves successful,” says Burke. The anticipated completion date for the demonstration project is September 2005. According to Burke, detailed results will be made available to all transit operators.

A model marketing campaign

A step-by-step guide to conducting an individualized marketing campaign based on the Federal Transit Administration’s model. Month 1 — Create an individualized marketing project team and designate staff members’ duties. Identify the target area, the control group and the number of households that will be contacted. Draft letters and surveys that will be sent to the targeted community members. Months 2, 3 — Send an initial survey to the target and control groups. Month 4 — Conduct individualized marketing techniques in the target group. This includes in-person visits with custom-made information packets. Months 5, 6 — Contact individuals in the target and control groups who expressed interest in alternatives to car travel to evaluate how many changed their travel behaviors. Months 13, 14 — Contact individuals of the target and control groups again to determine how many made long-term, sustainable changes to their travel behaviors.
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