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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study A Case Study Jeff Horton, Director, Florida State University, Institute for Applied Business Research Rural Transit Marketing Strategies
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study gadsden county transit services
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study the market place – Gadsden County Gadsden CountyFlorida Population46,38918,801,332 Persons per mile 2 87.4296.4 Unemployment 201011.8%11.1% Unemployment 20148.0%6.3% Per Capita Income (2010)$27,233$38,478 Per Capita Income (2013)$28,290$41,497 Household Income$35,380$46,956 Educational Attainment High School or higher = 77.2% Bachelors or Higher = 14.9% High School or higher = 86.1% Bachelors or Higher = 26.4%
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study 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 what it does what is the Gadsden Express?
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study is a partnership
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study 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.
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study 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.
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study initial promotional efforts Limited supplies of SWAG were developed and distributed to supplement print materials.
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study ridership – 04/10 through 04/12
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study Marketing is more than just promotion.
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study we have a problem
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study 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? was facing a problem.
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study 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.
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study 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. data collection
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study may 2012 survey results Simply put, 76% of riders were using the service for work and/or school purposes. rider profiles
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study 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. may 2012 survey results
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study 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.? analysis: financial impacts
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study 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. analysis: return on investment (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.
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study economic impact: all riders
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study sales & tax revenue impacts Estimated Unique Riders Per Year X% of respondents who would relocate if service wasn’t available =Residential Loss due to relocation if service were eliminated XAverage Household Size in Quincy XAnnual Quincy Retail Sales Per Capita =Potential Lost Retail Sales XSales Tax =Potential Lost Sales Tax 112 28% 32 2.38 $9,422 $ 717,579 7.5% $ 53,818 economic impact: all riders We didn’t feel from a marketing perspective that these numbers alone met the burden of justifying continued funding.
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study economic impact: working riders
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study 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
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study economic impact: working riders
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study economic impact: working riders Round trips provided by GX (April 2011-March 2012) x% of trips that were specifically work related =Number of work trips facilitated annually xEstimated # of work hours facilitated per trip xMinimum Wage =Annual personal income facilitated by GX annual income inflows to Gadsden County 12,156 34% 4,133 6 $7.25 $179,785
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study 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. Other cost considerations economic impact: working riders
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study economic impact: student riders
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study 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. economic impact: student riders
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study economic impact: student riders Average annual starting salary for TCC graduates* - Average annual per capita income of Gadsden Co. resident (2010) = Annual increase in earning potential x Affected individuals = Total increase in annual personal income facilitated by the Gadsden Express *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. $31,837 $27,233 $ 4,604 44 $202,576 future earning potential (annual)
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study economic impact: conclusions
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study economic impact: conclusions $ROI Sustained sales for Gadsden County merchants= Annual sales tax revenue= Annual Income Facilitated by Gadsden Express= Increased annual earning potential of student riders= A $92,000 annual investment by Gadsden County facilitates: $ 717,579 $ 53,818 7.8 : 1.58 : 1 $179,785 $202,576 1.95 : 1 2.2 : 1 The Gadsden Express represents a vital investment in the current and future economic health of Gadsden County.
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study 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.
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study economic impact: conclusions A few notes about ROI Studies Determine who your audience is and develop your research and conclusions accordingly. ROI studies are highly scrutinized; only draw conclusions that you can support. Collect accurate and timely data from your riders at least annually. They are an extremely powerful marketing tool. Always estimate conservatively. In this instance, marketing didn’t create a need; marketing satisfied a need.
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study ridership – 04/12 through 08/15
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Florida State University College of Business – Institute for Applied Business ResearchRural Transit Marketing – Gadsden Express: A Case Study questions? Jeff Horton, Director Institute for Applied Business Research Florida State University College of Business jnhorton@business.fsu.edu (850) 644-2509
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