Take the R train

Riding the subway this spring during my annual visit to New York City, something seemed wrong. First of all, I could actually understand what the conductors were saying as they rattled off the upcoming stops. And as passengers filed out of the cars, the conductors said things like, "Have a nice day," and "Watch your step as you exit."

I also noticed that the subway cars and stations seemed a bit cleaner. There were fewer panhandlers on the trains. This was not the kind of New York subway experience I've become used to.

Ken Stuart would be happy to hear that. In his five years as director of marketing research and analysis at New York City Transit (NYCT), Stuart has used a host of marketing research efforts to make riding the city's subways and buses a more pleasant experience.

Research has been an integral part in NYCT's drive to become more customer focused. Behind that drive is the belief that subway and bus riders have a choice in how they get from point A to point B. "We don't assume that our customers have to use us," Stuart says. "Some people don't have a choice but there are a lot of people who do. Even those who don't have a choice, we want to treat as though they do."

Succeed and flourish

Each day, the subway system moves over 3 million passengers; the bus system another 1.5 million. Annually, the system chalks up one billion subway rides and a half-billion bus rides.

If NYCT, with nearly 45,000 employees and 27 major departments and divisions, can integrate marketing research into its corporate culture and use it as an agent for change, it seems like almost any organization can do it. What it takes, Stuart says, is a total commitment to customer service and management that values the role of research.

Both of these things exist at NYCT, Stuart says, thanks in large part to Alan Kiepper, president of NYCT, who has championed the need for customer focus since he arrived five years ago, and Jack Lusk, senior vice president for customer services. "They have created an environment to promote the customer orientation that has allowed marketing research to succeed and flourish within NYCT," Stuart says. Under Lusk's organization, Stuart reports to Mary McCartney, the chief marketing officer.

In five years, the marketing research staff has grown from one employee (Stuart) to seven. During his first few years on the job, Stuart spent a lot of time meeting with the various departments within NYCT, assessing their information needs and explaining how marketing research could help them. Now, many departments come to him and his staff. Stuart gives strong credit to his co-workers in the marketing research department (see photo). The department functions so effectively because the staff members have a great deal of responsibility and authority in working with internal clients and external vendors, Stuart says.

Precious dollars

While the NYCT system took in revenues of $3.1 billion in 1994, it also spent $3.1 billion. Money is tight and fare increases are a last-ditch option. So NYCT must keep its current riders happy with the service while determining where to allocate the dollars that do exist. "Research helps us establish service levels and then it helps us determine, once we start meeting these thresholds, where we should be spending our precious dollars. And if we have sound research on which to base our decisions, we're much more likely to get funding for the projects we need," Stuart says.

With so many issues facing it -- rising costs, fewer government dollars, aging equipment - NYCT's information needs are many (there are 30 projects currently in the works) and varied. Thus the marketing research department uses the full range of qualitative and quantitative techniques, from focus groups and telephone interviews to a transportation panel. It's even developing research applications for a virtual reality system.

Much of the research focuses on identifying what Stuart calls the key levers that influence use of the system. Research has shown that the most important factor influencing subway use is concern about personal security. "A number of years ago we determined that it was the single greatest barrier to increased ridership," Stuart says. "We also determined that off-peak usage was an area with tremendous potential to increase ridership, but people aren't traveling with us [during off peak hours] because they're concerned about safety. Even though the crime rate has dropped by nearly 50 percent in the last five years, the perception of personal security has generally remained flat."

Analysis of several studies has shown that crime isn't the only contributor to feelings of personal security. It's influenced by other factors, such as the cleanliness of stations and subway cars, the presence of panhandlers and the layout of the station.

"There was no one study that told us what security is all about; it was a combination of them. We learn as much from the synergy of analysis across studies as we do from any one study. At the beginning we focused on the transit police and the crime rate. We're finding now as we build on past results that personal security is more than just the crime rate; it's the quality of life issues that detract from a sense of control and order. Any improvements in that area help make people feel more secure."

New Technology trains

One of the largest expenditures facing NYCT in the coming decades is the replacement of its fleet of subway cars. Here too, NYCT has turned to its customers for help. Research with passengers has influenced the design of the interior of the New Technology trains, which will be purchased beginning in 1997 and are expected to cost $2 million per car.

"Whereas in the past, the engineers and designers would look at the new cars in terms of maintenance and how many miles they can go without breaking down, now we have this opportunity to redesign the trains, to get the customer involved and design the interior," Stuart says. "We have nearly 6,000 subway cars, so it's a multi-billion dollar purchase over 20 years. We feel we'll save a lot of money if we do it right up front instead of having to modify the trains later," Stuart says.

NYCT has prototypes of the new subway cars in the system that it has used for focus groups and walk-throughs, to get opinions on both aesthetic and functional issues, from the number of hand-holds, to flooring, lighting, and the positioning, number and style of seats. For one set of groups, prototype cars were brought to the station at 34th street and Herald Square for a weekend at a part of the platform that wasn't being used. Respondents were recruited from subway stations and taken through each of the trains before participating in a focus group on board the prototype cars.

Research has also helped in the development of the MetroCard, an automated fare collection (AFC) system that replaces tokens with a card bearing a magnetic strip. During testing, 2,000 people have used the cards. Installation at the first 69 stations was completed in 1994. AFC installation in the remaining 400 stations and on buses will be phased in through 1997, replacing tokens as the main fare payment method.

Transportation panel

One of NYCT's major research efforts is an ongoing transportation panel in which a cross section of 3,000 New York City adults keep a two-day diary of all of their trips and the kinds of transportation they use. Respondents receive incentives to complete the diary twice a year and if they complete all the waves they're entered into a drawing to win $1,000. Shortly after submitting their diary each quarter they're contacted by telephone for a more in-depth review of their transportation choices and options.
"The panel will give us the most accurate data we've ever had on who uses our system, how they use it, and what our share of the market is. We'll be able to break down our market share geographically, by time of day, etc.," Stuart says. The panel will also serve as a flexible vehicle for measuring the short- and long-term effects of an accident on the NYCT system or other transportation issues or events.

The NYCT marketing research department is also developing a virtual reality system that would let it create, for example, a virtual subway station and have respondents "walk around" in it. Using the virtual reality approach, researchers could quickly alter the look of the station, changing the decor or who is in the station, for example, and then measure the effect the changes have on the respondents' perceptions of their personal safety.

The applications are almost endless, Stuart says, but before NYCT can run with the virtual reality approach, it has to learn to walk. "In the initial foray, people will look at a video monitor, but I'd like to get to the point where it's totally interactive, where the person controls where they go, what they look at."

Research doesn't sit on a shelf

In his research career, Stuart has worked at ad agencies, research firms and in the research departments of large corporations. "I think research is used as well here as I've ever seen it used. In terms of the percent of projects which actually get to the clients and where the information is used, it can't be beat because we just don't do research that sits on a shelf."

A sign that research has become ingrained in NYCT operations is that in the past few years Stuart says he has been asked by heads of departments to be actively involved in the decision making process -- before the decisions are made. "More and more they want to know: Is this the right decision, based on customer research?" he says.

What advice would Stuart give to organizations that want to better integrate marketing research? First, he says, research must be shared with a wide audience within the organization, often beyond the people with the most obvious interest in the results. "That way, other departments and a range of individuals see what has been done and what can be done. Heads of other parts of the organization will see that and say, what can research do for our department?

"In addition, you'll find that there are people in different parts of the organization, especially a very large one, who actually have a need to know that you often don't realize until you start sharing the results on a wider basis. The more you share the more you find out what people and thinking and what they need."
When reporting research findings, Stuart says, timeliness is key: get a summary out to people right away and let them digest it, then release the final version of the results later. "There's always the trade-off between the perfect report and the timeliness of the information. A great-looking report that nails down every detail that comes out six months to a year later isn't going to meet needs. What we find very successful is a succinct summary up front, a quick release of pertinent information that gets out to senior management and others. And then the longer report follows for those who are interested. But we get the initial results out quickly. That's important because it keeps everybody informed."

In addition, getting people within the organization involved early in the research process gives them a sense of ownership of the project and also results in better research because their input insures that the right questions are asked.

In-house users are clients

It's clear that Stuart takes the idea of research as a service quite seriously. He refers to the in-house users of his department's research as clients and customers. "We have to realize that the various parts of the organization are our internal partners, our customers. There are a whole host of organizations out there where research is kind of isolated in its own world or not in tune with needs of each division. We strive to avoid that. While all of us in the marketing research department are heavily steeped in research methodology, we know the importance of being client oriented. We have to be able to work with others and translate data into knowledge."