Marketing can boost bus revenue
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by John Darker, AMBIM
MARKETING techniques deserve Ito be more systematically applied than they have been in the past. They are, however, expensive: one recent household survey of . travel demand cost E12,000.
These matters were gone into during a short course—Marketing for public transport— arranged by the Cranfield Centre for Transport Studies. Last week I touched on some of the topics discussed there.
Every public transport company should make the maximum possible use of its own employees' market knowledge. The informed comments of inspectors should be quickly transformed into service changes. By the same token, bus crews should not need coaxing to re • port service deficiencies that obviously annoy the/public. No doubt in an ideal world for bus traffic managers, members of the public would politely inquire why, in London, three or four buses in succession are turned round at Liverpool Street and returned to Edmonton instead of continuing into central London and Victoria!
Traffic managers must not expect the public to complain about matters which are clearly within the knowledge of a responsible traffic manager. The absence of a formalised complaint must not be interpreted as customer satisfaction with a shocking service.
Route revenues
The Cranfield students learned a lot of useful details to further their interest in marketing. They were urged to compare rural route revenues by study of waybills and the patronage level obtained from groups of villages in similar circumstances. Much useful information may be drawn from National Census or local land use and transportation surveys on car ownership, etc, which would give better predictions of likely patronage levels.
The maximum amount of published information, and deduced information, should be focused on particular segments of the business, if possible, annually. Eastern National's 18-monthly review of operations within local sectors shows what is possible. How general is this example?
Because marketing, and the data collection on which it is based can prove very expensive its use must be carefully selective. Though, as the Cranfield short course underlined, marketing is a pervasive philosophy, its judicious use in sectors of the business may produce dividends at relatively low cost. Customer-oriented services generate public and local political support. On this basis marketing ceases to be a luxury.
Tough case
As an example of a very tough case study placed before Crarield marketing students it may be useful to summarise the study based on the Chicago Transit Authority, discussed during my visit.
The Chicago Transit Authority would seem to be analogous to a British conurbation transport authority for though described as a "self-regulating mun;cipal corporation" its board of directors is appointed by the Mayor of Chicago and the Governor of Illinois. It operates 135 bus mutes with 2,050 miles and six mass transit routes with 89 miles of rail rights of way. The CTA moves about 1.2m people daily, with a 24-hour service.
The decline in traffic is typical of experience in Britain. In 1947, the CTA had 1,150m passengers; by 1961 ridership had fallen to 500m where 't stabilised until 1967; thereafter it fell to 400m by 1973. All this when operating and capital costs were soaring. As the CTA responded to rising costs with rising fares, further declines in patronage followed.
The decline in public sup port coincided with the movement of people and industry to the suburbs and to the growth in the use of cars. The CTA tried to reverse the decline by sporadic advertising campaigns, service improvements and the like. These steps were not based on careful market analysis or marketing planning. In 1970, however, the CTA Research and Planning Department identified the following factors which, it was hoped, would attract more custom : ID More frequent, faster, dependable service; O More comfort; O More parking near the stations; O Employee courtesy; O Greater promotion — public relations.
These factors were not ranked in order of importance and this may have been an expensive error. Modern market research practice is to ask participants in a survey to specify the relative importance attached to particular criticisms.
The CTA uses standard fares on all forms of transit and exact fares on buses. Both measures reduce collection time and costs. Standard fares are believed to reduce customer confusion. Zone fares would generate more revenue, but they have been rejected because of •the greater expense they would entail. Exact fares are seen as a nuisance to customers, but drivers are not delayed giving change and there is less risk of an armed hold-up.
From 1951 to 1964 the base fare stayed at 250—evidence of the reluctance of the CTA to face political and public hostility and the inevitable falling away of customers.
In 1970 the fare was raised to 450 and zone fares in certain suburbs were lifted as high as 850. The fare increases predictably generated more revenue at the price of fewer riders.
CTA director Mr Milton Pikarsky. believed that fare reductions would be the greatest stimulus to increased ridership and 'in recent years the Authority has tried selective fare reductions for senior citizens and students in off-peak hours. An off-peak "shoppers special" was launched on the south of the city to tempt downtown shoppers to leave a little later and return a little earlier.
Up to 20 per cent of rush-hour riders are on shopping trips or errands that could be done outside the peak. A 50 per cent fare reduction for four Sundays in March 1974 boosted Sunday ridership.
But CTA policy-makers are quite divided over the best strategy for promoting mass transit in the long term. They all agree on the desirability of attracting more people to use mass transit as a partial solution to the energy shortage and to environmental pollution. But at least four different groups can be distinguished.
Fare experiments
The first group plump for more aggressive fare experiments. The city of Atlanta lowered fares from 240 to 150 in 1972 and boosted traffic by 20 per cent; 40 per cent of the new bus passengers were former car drivers. There was a one year's free bus travel scheme in downtown Seattle which doubled passengers, aided business, reduced pollution and reduced traffic hold-ups.
A second group within the CTA believes that selective fare reductions generate increased ridership only when these fare reductions are substantial. This group believes that service improvements are more important. than fare reductions. They favour increasing the number of• routes and frequency of service to reduce door-to-door travel time. They urge better equipment to attract more middleclass riders.
A third group want to increase continued overleat investment in underground rail systems as opposed to buses, partly because their costly construction is paid for mainly with federal funds. Though civic pride may be boosted by big underground networks their utility is questioned by bus advocates who point with scorn to the " frozen" network.
Staggered hours
A fourth group urge a major effort to influence • employers to spread work hours in Chicago to promote better use of equipment. A marked reduction in the vehicles needed to service peak traffic demands would be helpful to the CTA's finances. Starting times between 7am and 10am instead of the usual 9am would flatten the peak flows and enhance passenger comfort.
The Cranfield students were asked to formulate a market research proposal costing not more than £12,000 for Learning .about "consumer needs, perceptions, preferences, and satisfaction" relative to boosting patronage of mass transit. services. Other questions touched on the promotion and finance of mass transit, an appraisal of CTA's fare system and the devising of a set of priding objectives.
In the time available the course students—from NBC companies :and county councils —did not get very far in putting to rights a huge Transit Authority like Chicago, but the case study—all too reminiscent of British proberns — stimulated thought.