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Transit Discussion in real-time.

Part 1: Marketing transit on the cheap.

Is it a fair assumption to say that public transit has a perception problem?

When we poll riders and non-riders alike, adjectives like dirty, slow, uncomfortable, inefficient, and unsafe appear with regularity. A look into pop-culture reflects the industry much the same way; dirty taxis, buses that belch smoke, trains that are loud and crusted in soot—and of course, they’re always running late or leaving stops too early.

The inspiration for this blog comes from a Florida Trend editorial from Mark R. Howard entitled “Yesterday’s Solutions for Florida’s Transportation Problems in which he calls out the all-too-familiar shortcomings of public transit “the ride … took about twice as long as it takes me to drive,” and “it didn’t save me any money” or my personal favorite, “the bus was clean, but so spartan, so colorless, that the rides while utilitarian, could never really be pleasant.” There was “nothing …” Howard states, “to entice casual riders like me to make the bus a real transportation option ... or to make regular users of the bus feel like customers rather than cargo.”

Ouch.

There’s a reason why clichés are clichés—they’re based in observations gathered over an extended period. But are they always true? And more specifically to this situation, how accurate are these perceptions when weighed against modern transit environments? Is it even appropriate to paint with such a wide brush?

After all, as a provider of intelligent transit solutions—technology-based systems designed to increase operational performance, reduce travel times, and improve the ridership experience—we know that transit agencies across the country are investing heavily in hardware and software with the purpose of changing how we use mass transit.

Changing the perception of public transit has its advocates on both regional and national levels. Entities such as the American Public Transportation Association, spend significant resources lobbying for legislation and promoting public transit interests.

But what about the local levels?

Importance of marketing in changing the conversation

While transit agencies have been increasingly investing financial resources to procure technology to make routes more efficient and to make rides more comfortable, what is also obvious is that transit agencies are woefully understaffed and underfunded when it comes to engaging the public on what these investments mean to their riders and overall experience.

This becomes an important consideration as it closes the communication loop. If the public is unaware of the changes made to improve on-time performance or enhance the rider experience, how can anyone expect a shift in long-held opinions regarding the quality of any agency’s transit service?

Marketing provides anyone—including transit agencies—the chance to clue people in on what’s really going on with their transportation provider. A strategic marketing initiative:

  • Builds awareness
  • Guides the conversation
  • Encourages engagement
  • Influences decisions
  • Drives action

In the absence of marketing efforts leaves people to draw their own conclusions and opinions based on incomplete or one-sided information. What good is it to invest in technology that improves the experience of public transit when the only people who know about it are the ones already on the bus (or shuttle, train, etc.)? That’s a case of marketing to the converted; preaching to the choir. It does little to encourage potential new customers to rethink their position on the use of public transit and incorporating its benefit into their lives.

This is common sense and not likely to serve as a revelation to anyone who serves in the public transit industry.

A few tidbits of information from AdWeek which tend to catch people by surprise is just how much the act of marketing impacts the bottom line. For example:

  • Cuts to the marketing budget typically result a 20-30 percent reduction to income
  • Cuts to marketing affect long-term sales for up to five years after budgets have been restored
  • Cutting to marketing jeopardizes your brand and reduce market share by shifting future reductions to areas where it really hurts like staffing, pricing, and service
  • Companies who consistently engage customers can leverage the conversation around their value proposition better than those that don’t

Historically-speaking, companies that continue to dedicate resources to marketing outperform those who do not.

The financial reality of transit marketing

While it makes sense that marketing can play a critical role in changing this perception, it’s also important when exploring this idea is to understand just how underfunded public transit systems are in the United States. The Federal Transit Administration has requested $11.2 billion in funding for public transit funds in 2018—a figure that represents a $521 million reduction from the 2017 budget. That reduction becomes even more painful when one considers that only 2 percent of transit agencies can cover their operating costs through fare collection alone, with an average revenue equaling just 39 percent.

These reductions lead to an obvious conundrum where the need to market the agency and the improvements made to the overall experience falls down the priority list. Consider that while a recommended marketing budget for transportation-related markets in 2018 should fall between 10-12% of revenue, the public transit as an industry as a whole only allocates 8.5 percent (down from 11.2 percent in 2017). According to the Journal of Public Transportation, this percentage is largely buoyed by the 20 percent of large transit agencies in large metro markets with marketing budgets more than $500,000. Fully one-third of all transit agencies have annual marketing budgets less than $30,000; leading to a marketing budgets that hover closer to 2 percent of revenue.

As if marketing budgets weren’t the only roadblock toward successful ridership engagement, staffing for the purpose adds another wrinkle into the equation. The responsibility of marketing often falls to multiple people, with 44 percent of agencies tasking multiple people within the agency with the responsibility. Only 20 percent of transit agencies have someone who serves in the role of marketing director, with only 35 percent of these individuals have a college degree in marketing. Furthering the complexity of the situation, 47 percent of transit agencies report that the person in this role only does so as a secondary responsibility.

With these numbers in mind, it makes sense that a considerable number—36 percent—of transit agencies do not have a documented marketing plan. The lack of a written strategy combined with most individuals lacking education in marketing tactics, and multiple individuals charged with performing the function, it’s not hard to understand why agencies fail at adequately reaching its market with valuable, perception-changing information about the public transit experience.

So, the answer is simple: increase the marketing budget, right?

Sure, if the agency has the budgetary resources available. At that point, it’s only a matter of re-allocating funding to support a better mix of marketing efforts through strategic planning, staffing, and outreach tactics. Of course, that approach assumes the idea that funding marketing efforts was a budgetary oversight, and not the result of a lack of available funds.

But the reality—as just about any one in a transit leadership role will tell you—is that the funds simply don’t exist; that any person who tells you to simply ‘spend more on marketing’ doesn’t understand the operational realities of running a public transit agency. They’ll tell you that they run with skeleton crews. They’ll tell you how hard it is to find qualified employees—much less retain them. They’ll share with you just how many hats each staff member must wear just to keep the vehicles running on time. They’ll tell you that the investments they’ve made had more to do with improving operational performance and simplifying daily responsibilities than improving customer relations.

So, it’s not simply a budget issue. It’s a time issue, and there are too many responsibilities and too many fires to put out, to even think about marketing—and when they do, it’s a spot effort; an act of necessity to announce a new route or update schedules.

Define a deliverable marketing strategy

At this point, we understand why marketing is important, and why it is so difficult for public transit agencies to do so. Engaging with customers will always be critical to future growth and success, so simply NOT advertising isn’t an option, and at this point we all understand why that’s the case.

What can be done, and what options exist?

Before we dive into the tactics of marketing on a small budget, it’s important to define the strategy that drives your effort and provides a clear blueprint for how the organization approaches the communication of its value proposition to all stakeholders—both internal, such as administrator and staff; and external, such as the public and local leadership. In short, it will help make sure that everyone is on the same page.

Your strategy should define:

  • The goals you wish to achieve
  • The message you wish to convey
  • The timing and duration you will deploy
  • The responsibilities of staff and stakeholders to achieve the stated goals
  • The measurement criteria for how your efforts will be evaluated

Your strategy isn’t going to define how much you spend on television or on printed schedules. It will set the tone and establish the desired message that is to be conveyed and guides the intent of all efforts that follow. Consistent messaging is critical at every touchpoint, which means that your entire staff needs to be well-versed in the role they play in promoting your agency to the public. A disconnect in any area can diminish gains made in another. For example.

  • If your agency is promoting clean vehicles and stations, it becomes important that the operator is well-dressed and takes care in between stops to police the bus and stops for trash, and the garage staff makes sure the vehicles aren’t belching smoke due to poor maintenance.
  • If your agency wishes to position itself as a family-friendly transit resource, then the staff should conduct itself appropriately, possess on-board safety features like as security cameras and vehicle tracking, and have special fare categories for school-aged children.
  • If your agency is promoting quick rides and improved efficiency, then on-time performance is critical as are service notification to detours and delays.

The point made here is that a marketing strategy isn’t limited to a media buy or clever logo or tagline; it’s not defined by a print at or television spot. The strategy is the packaging; the wrapper that guides how the performance of every contributing factor will be evaluated. As such, the entirety of your staff must be familiar with the messaging you’re trying to convey, and their individual role to support it.

Having a defined strategy for the outcome and messaging is a critical factor in identifying realistic tactics and the resources needed to deliver. Only then can you have a chance to work within the available budget to identify what’s feasible and what’s not; don’t just shoot from the hip.

Understand your audience

First consider the low-cost, high impact tactics; those channels that are more likely to directly reach your audience.

For example, ETA’s 2016 Transit Survey, revealed that 78.9 percent of transit users utilized the transit agency’s website or mobile app to view transit schedules versus just 10.5 percent who referenced printed schedules.  If you were weighing where to allocate limited funds, it sure seems like a better idea to emphasize promoting your website and mobile apps, than printing a costlier (and disposable) schedule.

ETA’s 2017 Transit Survey revealed that Facebook (92.6%), Instagram and Twitter (48.2%) were the most popular social platforms, while others like Google+ (7.4%), Snapchat (14.8%), and Pinterest (18.5%) were on the lower end of the social media popularity spectrum. It would make sense to focus on the popular channels and not worry about less-used options.

Understanding your audience and how they consume information are critical steps toward maximizing your limited funds and still delivering a compelling value proposition.

NEXT WEEK: Part 2—Skinny budget tactics

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Works Cited

Bierman, M. (2015, 9 5). Intelligent technology will change how we use mass transit. Retrieved from www.miamiherald.com: http://www.miamiherald.com/news/business/biz-monday/article34127022.html

Binet, L. (2009, February 2). Marketing in a Recession: 10 Things to Remember. Retrieved from www.adweek.com: http://www.adweek.com/brand-marketing/marketing-recession-10-things-remember-98256/

Brady, S. (2017). What Percent of Revenue Do Publicly Traded Companies Spend on Marketing and Sales? Retrieved from www.vtldesign.com: https://vtldesign.com/digital-marketing/content-marketing-strategy/percent-of-revenue-spent-on-marketing-sales/

Federal Transit Administration. (2018). Budget - US Department of Transportation. Retrieved from cms.dot.gov: https://cms.dot.gov/sites/dot.gov/files/.../budget/.../fy-2018-cj-budget-final52417.pdf

Howard, M. R. (2018, 2 27). Yesterday's Solutions for Florida's Transportation Problems. Retrieved from www.floridatrend.com: http://www.floridatrend.com/article/24004/yesterdays-solutions-for-floridas-transportation-problems

Joseph Cronin, J., & Roscoe Hightower, J. (2004). An Evaluation of the Role of Marketing in Public Transit Organizations. Journal of Public Transportation, 23-26, 32-34.

Johnson, S. (2017, May 30). Transit Fares Only Partially Cover Public Transportation Costs. Retrieved from www.govtech.com: http://www.govtech.com/fs/Transit-Fares-Only-Partially-Cover-Public-Transportation-Costs.html

Marketing Charts. (2013, 4 15). Bad Customer Service Interactions More Likely to be Shared Than Good Ones. Retrieved from www.marketingcharts.com: https://www.marketingcharts.com/digital-28628

Results. (2018, February). Retrieved from www.cmosurvey.org: https://cmosurvey.org/results/february-2018/

The Nielsen Company. (2012, 4 10). Global trust in advertising and brand messages. Retrieved from www.nielsen.com: http://www.nielsen.com/us/en/insights/reports/2012/global-trust-in-advertising-and-brand-messages.html

Wikipedia. (2018, February 10). Farebox Recovery Ratio. Retrieved from www.wikipedia.com: https://en.wikipedia.org/wiki/Farebox_recovery_ratio#cite_note-:11-28