Journal Article
Customer Loyalty Differences Between Captive and Choice Transit Riders

Traditionally, efforts to increase the customer base of public transportation agencies have mostly focused on attracting more first-time users. Customer retention, however, has many added benefits that are not often realized. Loyal customers provide recommendations to others, increase and diversify their use of the service, and do not require the acquisition costs associated with new customers. Minser and Webb (1) identified the key drivers of customer loyalty to transit agencies, using the Chicago Transit Authority (CTA) as a case study. A customer loyalty model was created using service value, service quality, customer satisfaction, problem experience and the perception of the CTA as constructs. This paper extends the study to examine the customer loyalty differences between captive and choice riders. Captive riders have no viable travel alternatives and may continue using transit even if they are unhappy with the service. Choice riders choose to use transit after comparing their travel options and may switch to an alternative if transit service degrades. It was found that captive riders report experiencing more problems and are more sensitive to problem experience: each additional problem results in a more significant drop in service quality ratings than for choice riders. When problems occur, captive riders put up with the problems and continue using transit, but they show their discontent through their service quality ratings. Service value is insignificant in the loyalty decisions of captive riders because cost-benefit analysis which defines the construct of service value is irrelevant to captive riders. Finally, the relationship between perceptions of CTA and perceptions of service quality is stronger for choice riders. If a choice rider comes into the service with high opinions of the transit agency, they are much more likely to have high service quality ratings than those who take transit out of necessity.

Title
Publication TypeJournal Article
Year of Publication2014
AuthorsZhao J, Webb V, Shah P
JournalTransportation Research Record: Journal of the Transportation Research Board
Volume2415
Start Page80
Pagination80-88
Date Published03/2014
Keywordscaptive riders, Chicago Transit Authority, choice riders, Customer loyalty, public transit
Abstract

Traditionally, efforts to increase the customer base of public transportation agencies have mostly focused on attracting more first-time users. Customer retention, however, has many added benefits that are not often realized. Loyal customers provide recommendations to others, increase and diversify their use of the service, and do not require the acquisition costs associated with new customers. Minser and Webb (1) identified the key drivers of customer loyalty to transit agencies, using the Chicago Transit Authority (CTA) as a case study. A customer loyalty model was created using service value, service quality, customer satisfaction, problem experience and the perception of the CTA as constructs. This paper extends the study to examine the customer loyalty differences between captive and choice riders. Captive riders have no viable travel alternatives and may continue using transit even if they are unhappy with the service. Choice riders choose to use transit after comparing their travel options and may switch to an alternative if transit service degrades. It was found that captive riders report experiencing more problems and are more sensitive to problem experience: each additional problem results in a more significant drop in service quality ratings than for choice riders. When problems occur, captive riders put up with the problems and continue using transit, but they show their discontent through their service quality ratings. Service value is insignificant in the loyalty decisions of captive riders because cost-benefit analysis which defines the construct of service value is irrelevant to captive riders. Finally, the relationship between perceptions of CTA and perceptions of service quality is stronger for choice riders. If a choice rider comes into the service with high opinions of the transit agency, they are much more likely to have high service quality ratings than those who take transit out of necessity.

URLhttp://trb.metapress.com/content/l86744364q3730tk/?genre=article&id=doi%3a10.3141%2f2415-09
DOI10.3141/2415-09
Refereed DesignationRefereed