Wednesday, April 12, 2006

Carpool Incentives - What works? What is appropriate?

Marge Gasnick, with the Mid-America Regional Council (MPO in Kansas City),
posted a request to the TRANSP-TDM listserv today. She was seeking feedback on providing incentives and rewards to retain carpoolers. She was considering "reimbursing them for some of the upkeep on their vehicle, the types of things that help reduce the emissions produced by the vehicle - e.g., oil changes, tuneups, tires, etc."

This has stimulated a variety of responses from other listserv subscribers about what is an effective incentive AND what is appropriate use of taxpayers' dollars.

For example, does "Advertising TDM by giving away gasoline as the reward for energy conservation sends a confused message," as Dennis Eirikis, President of ClearLight Communications, suggests? (Dennis' full post here)

Brenda Williams with the Regional Transportation Commission of Southern Nevada replied "Some may say that using taxpayer dollars for a spa treatment and a massage [to build on the stress reduction of commute options] is improper and unnecessary no matter what our TDM program message is or no matter how our regions are impacted by certain marketing messages. Sometimes what works in one region will not work in another, but the only way to determine the effectiveness of any marketing strategy is to try it after careful investigation of your regional culture." (Brenda's full post here)

These listserv postings come after a similar discussion I had recently on the acceptable use of purchasing movie tickets (from a private company) as part of a Refer a Friend program to enroll more members into the Emergency Ride Home program. Drawing the line as to what is acceptable may also be a "cultural" issue (as well as a legal one). For example, while movie tickets were deemed acceptable, purchasing scratch off tickets for the State's lottery were not deemed acceptable.(Even though the promo opportunities are endless. :) “Carpooling will save you some serious scratch” or “Scratch off one reason for not being able to carpool – E..R..H..” or “Carpooling is no gamble; you are guaranteed a ride home” :) )

I'm not arguing about the decision, simply raising the flag that what may seem acceptable to some, might not be to all.

Finally, testing what works is always a good idea. Offer a variety of incentives, for example, and let the individual select. Or try "gas cards" in one market but "movie tickets" in another and see what happens. Look for effectiveness in achieving your objectives (not just measuring demand for a particular incentive). See which incentive did the best job in what you set out to achieve with the program such as reduce turnover rates in vanpools, etc.

And, by all means, share your results with the rest of us.


Denis Eirikis said...

Let's face it. Carpooling is a hard sell. Rewarding people to try carpooling, and rewarding people who try it to keep carpooling, makes better business sense than trying to achieve these results (more expensively) without rewards.

From a numbers standpoint, and I am inventing and rounding these numbers to make a simple point, a $20,000 advertising campaign might attract 100 new carpoolers. The return on investment of the $20k is 100 carpoolers, brought in at a marketing cost of $200 each.

By using rewards and incentives, it is my consistent experience that the total cost per/result can be considerably lowered.

Human nature is to respond to the carrot and the stick. The carrot (rewards) generally work better. People respond to offers. People respond in greater numbers to compelling offers that evoke emotion and provoke response.

I know that gas cards as a reward work... but I also know from market research that some people object to the idea of commuter assistance agencies giving away gasoline since the general idea is that we ought to be helping conserve energy.

So we recommend to clients that rewards and offers be carefully thought out to be consistent with our branding... i.e. to be consistent with the messages and behaviors that we are trying to promote. While I agree that $50 in free gas cards would probably out perform $50 in free oil changes... my point is that the conservation/hypocrisy issue can be avoided, and perhaps the gas card out performed by a $50 Bank gift card that could be used for gas, tires, etc. What might work even better are $50 rewards so desirable and so unusual that the reward itself gives the program publicity. What works very best is teaming with the corporate world who can donate/discount meals at fine restaurants, weekend getaways at resorts, etc. If your budget is $50 per reward, many corporations will parlay that into compelling $100 offers for your carpoolers.

So, in my opinion, it makes excellent business sense to experiment with various rewards, promotions, and marketing consistent with our message and to carefully measure everything... with the end goal of always trying to lower your marketing cost per new carpooler or other specific goal achieved.

Denis Eirikis
Clear Light Communications Inc.
T 561.798.9633
F 561.795.4404
C 561.351.1703
Providing Measurable Marketing Solutions for Transit and TDM

MJ Greenwald said...

I am trying to promote carpooling in my local community.

You would think the incentives of rising gas prices, and the need to cut down on global warming would start to get people more interested in the idea. But I agree that it is a hard sell.

My chief reason for posting a comment here is to provide a link to an interesting diary on a community blog about computer-matched carpooling. It is on the political site Daily Kos. Here is the link: The carpooling system envisioned here is pretty futuristic, compared to our current internet based carpool systems, but I thought the discussion would be of interest to others.
MJ Greenwald
Winona, MN

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