Tuesday, September 23, 2014

Transit Branding’s Virtuous Cycle

By Josh Stephens

A few months ago, Miller Lite was featured in "Anchorman II" on the momentous occasion of the resurrection of its 1970s can. You know, the gold-trimmed one with “Lite” in Gothic script at the top. The one that reminds you of bowling alleys and Cheap Trick booming out of your Camaro on a hot summer night. Miller Lite is keeping it real.

Thanks in part to Ron Burgundy’s ringing endorsement, sales went up 4.7 percent. I promise, it’s no less underwhelming than it ever was.

The disingenuousness of Miller Lite’s campaign, like that of countless other such campaigns, haunted me as I wrote about the branding of transit agencies for this month’s issue of InTransition. If a beer company can fool the public into throwing away its money on the same old product, then aren’t transit agencies doing the very same thing when they promoting and rebrand themselves?

Yes and no. But mainly no.

The branding of transit involves many moving parts, literally and figuratively. Transit agencies aren’t going back to the ‘70s – many of them have been there all along. So, they upgrade their livery, produce new advertisements, and, in some cases, even adopt new logos and names. At best, this cosmetic work is meant as a “signal” to get the public to pay attention to other, substantive changes.

Meanwhile, some branding efforts include overhauls of communications materials, including that of printed schedules, signage, and electronic communications. Done well, these upgrades are anything but frivolous.

Somewhere between the necessities of knowing when the bus arrives and the aesthetic pleasure of seeing its new, shining face lies the network effect. This is where things get interesting.

Selling all the six-packs in the world still won’t improve the taste of Miller Lite (or make it any less filling). It’ll still be the same delicious refreshment each time. But, to a great extent, even cosmetic changes to transit agencies can create a virtuous cycle.

Consider an agency that upgrades only its logo, graphics, and livery. It might gain discretionary riders purely because they perceive that the agency has improved (or because they discover previously unknown competency). Because the vast majority of transit agencies’ costs are fixed, these marginal ridership increases go straight into the agencies’ coffers. If the riders are satisfied, word will get out, and ridership will beget ridership and, therefore, more money. So far, so good for the agency.

If branding campaigns go really well – and, importantly, as long as the influx of new riders doesn’t lead to overcrowding—they amount to a pretty brilliant win-win, without the BS’ing. If the agency invests some of its marginal revenues into actually improving service, then branding becomes a self-fulfilling prophecy. More sales actually will result in a better product. This is the upside to a public monopoly: it doesn’t have the efficiencies of the private sector, but it can still define, and achieve, success in ways that, say, beer companies cannot.

Imagine, then, what would happen in San Diego if Ron Burgundy started taking the bus.

No comments: