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GCN : February 2014
GCN FEBRUARY 2014 • GCN.COM 21 in Montreal, so it is very, very popular here," said Pierre Bourbonniere, direc- tor of marketing with STM. "We have 2.5 million customers who have an OPUS card, a smart card in which you can charge single fares, 10 tickets or monthly fares. We also have monthly pass pene- tration of 80 percent." Bourbonniere said STM has increased its ridership 15 percent in the last three years because it has streamlined its bus routes, added new Metro stations and improved transit service overall. Now the agency wants to focus its marketing efforts on retaining current riders as well as continuing to acquire new riders. STM discovered that 13 percent of its riders leave the OPUS system every year due to job changes, relocations or car purchases. Even though the OPUS sys- tem recruits another 13 percent of new riders each year, STM is hoping to reduce the departure of its regular customers with its new customer loyalty program. "If we can just keep 2 percent to 4 per- cent of our riders each year, that would help us generate more ridership," Bour- bonniere said, adding that it will also help STM reach its goals of reducing traf- fic congestion in Montreal and related carbon emissions. With SAP's help, STM created a per- sonalized email marketing campaign for 20,000 public transit users. The pilot project ran from May through October 2013, and it was available as an Apple iPhone application. GEO-LOCALIZED LOYALTY PITCHES Dubbed "Merci," STM's customer loy- alty program involves sending partici- pants personalized information in a ge- olocalized fashion and in real time. The messages participants receive include subway or bus delays, potential savings from monthly or yearly passes, and of- fers from 340 retail and 1,000 event partners such as taxi companies, restau- rants, shops and entertainment venues. "Our customers are doing 2.2 trips per day with us. They have mobile phones and smart phones. They are a captive audience that we can make offers to and inform about services," Bourbonniere said. "We're trying to provide informa- tion about the right product to the right person at the right time." Merci provides participants with spe- cial offers based on where they live and work and the frequency with which they use the public transit system. "Merci is a loyalty program based on providing instant recognition to our cus- tomers and commercial offers," Bour- bonniere said. "If they travel on public transit or change certain behaviors, we offer them rebates or free ticket offers. We provide them service-related infor- mation, but we also reward them for us- ing public transit." Merci users get one offer per day. For example, a consumer near a particular Tim Horton donut shop at 9 a.m. might receive a notice that there is a two-for- one sale at that shop. "We try to have offers that are exclu- sive, and we try to have offers that are better than you can get elsewhere, like a 50 percent sale," Bourbonniere said. "We track the interest level of the customers to any offers. We will give you more of what you like, and if you're not so keen, we may stop sending you notifications from certain restaurants." Instead of a points program like airline frequent flyer miles, Merci awards virtual "trees" to customers for each round trip on public transit. Customers get ranked based on the number of trees that they earn, with the opportunity to move up from one level of trees to a higher level to earn bigger rewards. Bourbonniere said STM hasn't receive any complaints about privacy during the Merci pilot program. That's because the cloud-based data analytics system uses two separate databases --- the OPUS data and the personalized customer data --- that are only combined when a paticipant responds to an offer. "Any information we gather that is not mission critical, we are not allowed to col- lect it or keep it. The non-mission critical data is stored somewhere in the cloud," he said. "All of this information comes together in a fraction of a second like an atom smasher when a customer says that he does want this offer, like free opera tickets." MORE RIDERS, MORE NON-FARE REVENUE STM was pleased with the results of the Merci pilot program: 24 percent of par- ticipants increased their use of public transit during the six-month pilot pro- gram, 57 percent visited new destina- tions on public transit; and 45 percent took a friend on a public transit outing. STM plans to release Android and BlackBerry versions of the Merci appli- cation in the first quarter of 2014, with hopes of growing the number of partici- pants to 100,000 in 2014. Merci is also providing STM with an increase in ridership as well as addition- al revenue, given that the agency gets paid by industry partners based on the click-through rate of commercial offers. "Merci means more revenue for us. We will get more passenger revenue based on increased ridership, but also non-fare revenues because the partners are pay- ing to be in the app. They pay to send no- tifications to our customers based on the click-through rates," Bourbonniere said. STM spent around $250,000 with SAP on the Merci pilot program in 2013, and the agency is now looking for a vendor to manage the program in the future. The agency expects to earn a few million dol- lars in additional revenue from Merci in 2014. "There are a lot of indirect benefits of Merci, too," Bourbonniere said. "In ad- dition to the non-fare revenue and the fare revenue, it created an environment where people see us as a very dynamic organization. It generated additional reasons for people to stay in public tran- sit. It created a lot of intangibles that can't be measured because the users re- ally liked it." •