By Kathleen Cassedy

CASE STUDY :
Amtrak

Do you think Amtrak’s Vice President of Marketing and Brand Management, David Lim, was perturbed when advertising for both US Airways’ and Delta Air Lines’ compared their air service to train transportation earlier this year?

Not a bit. “I think both airline campaigns raised the value of Amtrak’s brand, which is the Acela Express, in the general marketplace,” he remarked at the ATME conference this past May. “Their ads also complimented our existing campaign.”

Lim, who formerly worked for US Airways, surmises that the airlines are responding in part to the loss of air traffic on their popular high yield shuttle routes (Washington, D.C. and New York City, and New York City and Boston) to Amtrak’s Metroliner and its new brand, the Acela Express.

Following the September 11th tragedy, which grounded airlines and closed airports, and initially made people fearful to fly, the National Rail Passenger Service (Amtrak) experienced a jump in ridership.
Since the launch of Amtrak’s new website a year ago, the percentage of online sales has doubled, Lim says. New products, such as Amtrak’s Guest Awards, have added value to the brand.

“We’ve been very busy designing products that meet the business travelers’ needs,” Lim notes. “Acela’s retention of these travelers who have migrated from the air shuttle is a tribute to Amtrak’s employees consistently delivering on the promise of our advertising campaign.” These TV ads highlight the onboard amenities, especially comfort. “We have never emphasized speed or savings in time [as train amenities], instead we’ve focused our message on the overall productivity benefits” which Lim explains as strategic control and usable time during train travel.

The launch of Acela Express and its ad campaign were based on conversations with 25,000 travelers. “We wanted to make sure that we built the brand around ideas that we heard from our customers,” Lim says.
Customers said air travel may be fast, but it is uncomfortable, and it strips them of their humanity. (These surveys were taken before September 11.) While automobile transportation provides a sense of freedom and individualism because drivers control where they go, when they go, and when to stop, people must deal with aggressive drivers and traffic.

“Train travel strikes the balance between planes and cars,” Lim points out. He uses the expression “strategic control” to describe the train experience pertaining to passengers, who must relinquish control over some activities (e.g., conducting the train), but can control where they sit, when they eat, and when they walk around. Their time on the train can be spent on self discovery, socializing, relaxation or productivity.
“Sounds like a very simple proposition – just lay it out, and people will flock to the train,” Lim comments about benefits of train travel. However, before the Acela Express brand was created, Amtrak was viewed as complacent, bland, old-fashioned, and outdated. “In other words, Amtrak was not meeting the potential of what train travel could be,” Lim says.

Amtrak studied best practices of superior service organizations, such as Ritz Carlton and Nordstrom, and trained 24,000 employees to deliver consistent amenities. To ensure customers’ satisfaction, Amtrak offers an unconditional guarantee: “You are a guest on Amtrak. We promise to make your trip a safe, comfortable, and enjoyable experience.”

Amtrak was ready to bring back train travel as a desirable choice to the traveling public. “We decided to focus our efforts on developing and promoting the Acela Express’ brand and convince discerning travelers that it should be the preferred choice of travel.”

To introduce the Acela Express, Amtrak used advertising to differentiate train travel from flying or driving. Its ads spoke to the themes of useful time and maximizing strategic control. They also highlighted Acela Express amenities, which includes conference tables so passengers can conduct business meetings onboard; the bistro setting in the café car, which offers an improved menu, including several draft beers; improved seating; and attractive subdued colors in the cars.

“The foundation of our branding of the Acela Express is this is a train of acceleration and excellence. It has leading technology, superior comfort and modern amenities.” It is designed for the way business travelers want to travel. If they simply want to rest, it offers a “quiet” car where cell phones are prohibited. The Acela Express fares are also lower, between 29 percent and 42 percent less, than walkup air shuttle fares, Lim points out.

For the third quarter of 2001, Amtrak’s combined Acela Express and Metroliner share of the Washington-New York market clipped that of the airlines’ at 53 percent, and Lim believes it will be 58 percent for the fourth quarter. Amtrak’s market share is also increasing for the New York to Boston route, from 35 percent in the third quarter of 2001 to an expected 38 percent in the fourth quarter.

“The migration and retention of passengers to the train has confirmed that the value of well spent travel time is just as important, if not more [as speed],” Lim asserts.