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https://nap.nationalacademies.org/catalog/27432/critical-issues-in-transportation-for-2024-and-beyond

Using Market Segmentation to Increase Transit Ridership: An Updated Handbook

To foster long-lasting customer satisfaction and loyalty, transit agencies must understand and make decisions in accordance with customer needs and preferences. Since it can be infeasible for agencies to tailor actions at the scale of the individual, an alternative strategy is to conduct a market segmentation analysis on one or more data sources to identify sufficiently similar groups of transit riders to consider during a decision-making process. Challenges arise in selecting the variables to consider in a segmentation analysis and the method to use. One potential approach is to use predetermined (a priori) segments, identify characteristics at the outset that might represent important differences among transit customers, and create segments based on these (for example, commuters versus noncommuters or suburban versus central-city riders). An alternative is to use market-defined (post hoc) methods, such as statistical clustering and classification methods, to identify groupings that may not be apparent from surface-level examination. These data-driven strategies are useful in that they can help decision-makers discover key differences within groups defined by one or more sociodemographic characteristics. TCRP Report 36: A Handbook: Using Market Segmentation to Increase Transit Ridership, published in 1998, is the quintessential TCRP report on this topic. The purpose of this report was to introduce market segmentation, including several case studies on how to appropriately plan for and research the development of a suitable segmentation scheme and then implement findings into actionable strategies that fulfill the transit agency’s goals of increasing ridership, bringing in new customers, and boosting the satisfaction levels of different groups of users. In the 25 years since the publication of the 1998 handbook, scholars in the business, social, and mathematical sciences have published new research relevant to this topic. Moreover, passive data collection and big data sources have become more widely implemented and available for profiling transit customers, and the rise in remote work, which has accelerated in the wake of the COVID-19 pandemic, has challenged conventional thinking about typical rider segments. A targeted compendium of approaches to collecting data, extracting and describing segments, and tailoring product and service decisions to the needs and preferences of transit market segments would allow for the dissemination of information about success stories, potential pitfalls surrounding forward-thinking market segmentation practices, and how agencies might benefit from adopting certain practices under various scenarios. The objective of this research is to help public transportation agencies effectively use market segmentation strategies to attract and keep transit riders. The results of this research project should be easily used by public transportation professionals, including marketing professionals, transit managers, planners, and others interested in implementing market segmentation strategies to attract and keep transit riders. 

Language

  • English

Project

  • Status: Proposed
  • Funding: $300000
  • Contract Numbers:

    Project B-56

  • Sponsor Organizations:

    Transit Cooperative Research Program

    Transportation Research Board
    500 Fifth Street, NW
    Washington, DC    20001

    Federal Transit Administration

    1200 New Jersey Avenue, SE
    Washington, DC  United States  20590
  • Project Managers:

    Garcia-Colberg, Mariela

  • Start Date: 20240521
  • Expected Completion Date: 0
  • Actual Completion Date: 0

Subject/Index Terms

Filing Info

  • Accession Number: 01902066
  • Record Type: Research project
  • Source Agency: Transportation Research Board
  • Contract Numbers: Project B-56
  • Files: TRB, RIP
  • Created Date: Dec 13 2023 1:22PM