Rural Transit
Marketing
Strategies
A Case Study
Jeff Horton, Director, Florida State University, Institute for Applied Business Research
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
gadsden county transit services
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
the market place – Gadsden County
Gadsden County
Florida
46,389
18,801,332
87.4
296.4
Unemployment 2010
11.8%
11.1%
Unemployment 2014
8.0%
6.3%
Per Capita Income (2010)
$27,233
$38,478
Per Capita Income (2013)
$28,290
$41,497
Household Income
$35,380
$46,956
Population
Persons per mile2
High School or higher = 77.2%
High School or higher = 86.1%
Bachelors or Higher = 14.9%
Bachelors or Higher = 26.4%
Educational Attainment
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
what it does
what is the Gadsden Express?
• Express service between Quincy and Tallahassee
• Created using JARC/New Freedom and FDOT Service
Development Funds.
• Connects with Tallahassee’s StarMetro system and
provides direct service to Tallahassee Community College.
• Fare is currently $1/trip with discounted, multi-trip punch
cards available.
• Service launched on April 2010
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
is a partnership
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
service infrastructure
In addition to the vehicle, two
park and ride lots were
established as part of the
service. One located at Winn
Dixie in Quincy and another at
the Midway City Hall.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
initial promotional efforts
Promotional efforts
during the launch of the
service focused primarily
on standard collateral
development and
distribution. This was
supplemented with
minimal advertising
purchases.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
initial promotional efforts
Limited supplies of SWAG were developed and distributed to supplement
print materials.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
ridership – 04/10 through 04/12
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
Marketing is more than just promotion.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
we have a problem
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
was facing a problem.
• JARC and service development funds were set to expire in
December 2012.
• $92,880 was needed annually to maintain the service.
• Gadsden County expressed a desire to continue the service
but was having difficulty visualizing the benefit.
• What would be the impact on existing riders?
• What would be the return on investment for picking up the
funding?
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
data collection
As part of its service development
agreement, Big Bend Transit
agreed to periodic assessments of
the service and enlisted the
Institute for Applied Business
Research to conduct two ridership
surveys.
One was conducted in late 2010
while the second was conducted
in 2012 in reaction to the need to
justify continued funding.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
data collection
The purpose of both surveys was to:
•
•
Identify populations served
Determine characteristics of current users:
– County of residence
– Demographics (i.e. income levels, education, etc.)
– Usage habits
– Access to other forms of transportation
However, the second survey, conducted in May 2012,
looked more specifically at economic impacts
resulting from the potential loss of service.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
may 2012 survey results
rider profiles
1%
6%
16%
29%
1%
5%
7%
10%
Rural Transit Marketing – Gadsden Express: A Case Study
25%
Full Time Student
Full Time Employee
Part Time Student
Part Time Employee
Student and Employed
Work From Home
Unemployed
Retired
Other
Simply put, 76% of riders were using the
service for work and/or school
purposes.
Florida State University College of Business – Institute for Applied Business Research
may 2012 survey results
• 80% of riders did not own cars;
• 95% used the service as their primary means of travel
between Quincy and Tallahassee;
• 65% said it was their only method of transportation
between Quincy and Tallahassee;
• 75% were estimated to be below the poverty line
based on income information provided, and
• 28% of riders would consider relocating if service was
discontinued.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
analysis: financial impacts
Based on the data collected through the survey and available
secondary data sources, we examined two key economic issues
with eliminating the Gadsden Express.
• Retail & Sales Tax Revenue: Employment income and consumer
purchases facilitated by the Gadsden Express needed to be
examined.
• Return on Investment: If Gadsden County funded the service,
what would be the return on investment (ROI) to the County in terms
of continued employment, economic growth, etc.?
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
analysis: return on investment (ROI)
According to a study conducted in 2008 by Florida State University College of
Business for the Florida TD Commission:
•
transportation disadvantaged working riders can generate a conservatively
estimated return on investment of 5.71:1, and
•
the transportation disadvantaged student rider provided a 5.85:1 ROI.
However, for the “sales” pitch on this particular study, we wanted more verifiable
and geographically-specific analysis. Therefore, we looked only at affected riders
and calculated the economic impact using more current data.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
economic impact: all riders
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
economic impact: all riders
sales & tax revenue impacts
Estimated Unique Riders Per Year
112
X
% of respondents who would relocate if service wasn’t available
28%
=
Residential Loss due to relocation if service were eliminated
X
Average Household Size in Quincy
X
Annual Quincy Retail Sales Per Capita
=
Potential Lost Retail Sales
X
Sales Tax
=
Potential Lost Sales Tax
32
2.38
$9,422
$ 717,579
7.5%
$ 53,818
We didn’t feel from a marketing perspective that these numbers alone met the
burden of justifying continued funding.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
economic impact: working riders
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
profile of working riders
• Median age = 41.5
• 51% or more rode the bus daily
• 90% used the service as their primary form of
transportation
• 65% did not own a car (of those, 53% could not afford a
car)
• 51% would not have another way to make their work
trip
• 44% would consider relocating if the Express was
discontinued or unavailable
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
economic impact: working riders
Gross Flow of Earnings: Gadsden County
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
(in thousands)
Inflows of earnings
Rural Transit Marketing – Gadsden Express: A Case Study
Outflows of earnings
Residence adjustment
Florida State University College of Business – Institute for Applied Business Research
economic impact: working riders
annual income inflows to Gadsden County
Round trips provided by GX (April 2011-March 2012)
x
% of trips that were specifically work related
=
Number of work trips facilitated annually
x
Estimated # of work hours facilitated per trip
x
Minimum Wage
=
Annual personal income facilitated by GX
Rural Transit Marketing – Gadsden Express: A Case Study
12,156
34%
4,133
6
$7.25
$179,785
Florida State University College of Business – Institute for Applied Business Research
economic impact: working riders
Other cost considerations
• Of those workers who said they would NOT consider relocating,
43% said they would not be able to make their work trip without
access to the Express.
• This represents a population of people that would be unable to get
to work and become unemployed as a result.
• Unemployment would result in additional social service costs
to Gadsden County and Florida.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
economic impact: student riders
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
economic impact: student riders
• In sample, 44 riders said they used the service for school trips.
• 77% of these are enrolled at Tallahassee Community College
• 57% ride the Gadsden Express weekly; 43% daily
• 95% primary form of transportation
• 65% did not own a car & 50% of those could not afford a car
• 51% would not have another way to get to school
• 42% would consider relocating from their residence if the
Express line was discontinued or unavailable.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
economic impact: student riders
future earning potential (annual)
Average annual starting salary for TCC graduates*
$31,837
-
Average annual per capita income of Gadsden Co. resident (2010)
$27,233
=
Annual increase in earning potential
x
Affected individuals
=
Total increase in annual personal income facilitated by the Gadsden Express
$ 4,604
44
$202,576
*Average annual starting salaries for TCC graduates were used in this analysis
because it was the most conservative estimate, hopefully mitigating speculation on
the part of the Gadsden County Commission.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
economic impact: conclusions
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
economic impact: conclusions
A $92,000 annual investment by Gadsden County facilitates:
$
ROI
Sustained sales for Gadsden County merchants
=
$ 717,579
7.8 : 1
Annual sales tax revenue
=
$ 53,818
.58 : 1
Annual Income Facilitated by Gadsden Express
=
$179,785
1.95 : 1
Increased annual earning potential of student riders
=
$202,576
2.2 : 1
The Gadsden Express represents a vital investment
in the current and future economic health of
Gadsden County.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
economic impact: conclusions
There were three additional cost/benefit components that we have
not explored to date.
• We did not examine the medical cost savings related to health care
maintenance facilitated by the GX.
• We did not estimate the cost savings to the State that result from shifting
TD customers from demand-response to the fixed-route system.
• We also did not project potential social service cost increases resulting from
unemployment.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
economic impact: conclusions
A few notes about ROI Studies
• They are an extremely powerful marketing tool.
• Collect accurate and timely data from your riders at least annually.
• Always estimate conservatively.
• ROI studies are highly scrutinized; only draw conclusions that you can
support.
• Determine who your audience is and develop your research and
conclusions accordingly.
• In this instance, marketing didn’t create a need; marketing satisfied a
need.
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
ridership – 04/12 through 08/15
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research
questions?
Jeff Horton, Director
Institute for Applied Business Research
Florida State University College of Business
jnhorton@business.fsu.edu
(850) 644-2509
Rural Transit Marketing – Gadsden Express: A Case Study
Florida State University College of Business – Institute for Applied Business Research