Knowledge Resources

Ensure customer acceptance of new technology. The following techniques can help:

• Implementation of new technology requires a comprehensive and effective marketing strategy using broadcast and print media.

VCTC and the other transit agencies recognized the importance of developing an effective marketing strategy to promote Smart Passport. At the start of the project, advertisements were aired on three local radio stations in both English and Spanish. The participating agencies printed flyers and advertisements in local newspapers, and offered information and applications on the VCTC website. The participants reported that the radio advertisements were the most cost-effective mechanism used. Unfortunately, project delays negated much of the positive reaction to the marketing effort. As system reliability issues became widespread, VCTC discontinued the marketing campaign.

As with any new product introduction, market penetration for new fare media depends on the operators' ability to promote the product's attributes. Operators need to differentiate the benefits of the new fare media from other available fare media and to publicize the advantages, as customers may already have had experience using a product (such as a monthly pass) that in their mind is satisfactory. Smart cards combined with APC and AVL offer an opportunity for the transit industry to improve the level and quality of service while also offering customers a fare medium that is easier and safer to use.

• A program is needed that offers customers usage-based incentives and loyalties such as free transfers, fare discounts, and automatic replenishment.

The Smart Passport project offered pricing incentives to stored-value card customers by providing a 10% discount in fare. For every $10 of fare purchased, the customer received $11 of fare. The monthly Smart Passport pass also offered customers free transfer from one agency's bus to another agency's bus for the first time. However, no transfer discounts were associated with the stored-value pass program. Thus, if a stored-value pass customer transferred from a Camarillo bus to a VISTA bus, the rider paid the full Camarillo fare and the transfer fare. Another disincentive was the co-existence of other pass programs that had lower prices, such as SCAT's pre-paid monthly pass program (see Table 3). It is interesting to note that most non-SCAT customers preferred the Smart Passport stored-value pass to the monthly pass because they did not travel frequently enough to achieve any cost savings from the monthly pass.

Pricing of new fare media needs to be based on the agency's cost recovery requirements, but an electronic fare payment program also needs to be competitively priced with other available fare media. The new fare media should also introduce added convenience such as loyalty and discounts based on use. If an electronic fare payment program enhances customer convenience and offers some type of pricing incentives, such as free transfers, fare discounts, and loyalty incentives, customers are more likely to accept the technology. For example, the popularity and use of the New York Metropolitan Transit Authority (MTA) Metro Card soared when the MTA linked discounts and free transfers to the magnetic stripe card. There are other means, however, of enhancing customer convenience if financial incentives are not a viable option. The Washington Metro Area Transit Authority's (WMATA) SmarTrip Program has had a 20% market penetration without any additional pricing discounts from its existing magnetic stripe ticket. Each fare medium offers the same discount: Riders receive $22 of fare for a $20 expenditure. SmarTrip users also like the added benefit of card registration. If a card registered with the agency is lost or stolen, the remaining value of the card will be restored based on the last transaction. WMATA also plans to introduce an auto-replenishment feature to the card later this year. Finally, WMATA guarantees SmarTrip users that their privacy will be protected and that the data generated from using the card will not be sold.

• Formal and systematic surveys of and interviews with customers are needed to reliably assess customer satisfaction and to design strategies to improve satisfaction.

None of the participants conducted rigorous surveys or research on changes in ridership levels during the demonstration project. Thus, any conclusions regarding customer acceptance is only an estimate. However, VCTC conducted informal surveys of customers on each VISTA bus route and received positive anecdotal responses, and positive comments were received from FATCO customers during informal interviews. The information gleaned from surveys and interviews helps the transit industry understand the positive attributes of smart cards, such as replacement policies, a budgeting tool, and the security of carrying less cash.

Reaching conclusions that can be used to improve customer satisfaction, however, requires surveying and interviewing of focus groups of participating customers and of those who chose not to purchase a smart card. There are a number of questions that can be asked to measure customer acceptance of a smart card:

• Does the smart card offer attributes for existing transit users?
• Will the card attract riders?
• Does the card stimulate increased confidence in transit services?