Running Head: TTC Midterm Exam

TTC Midterm Exam 1

Table of Contents
Introduction 2
Problem Statement 2
Executive Summary 3
Recommendation/Implementation 4
Short-term 4
Medium-term 5
Long-term 5
Control & Feedback 5
Contingency Plan 6
References 7
Appendix I: TTC SWOT Analysis 8
Appendix II: PESTEL Analysis 9
Appendix III: Key Success Factors 10
Appendix IV: Evaluation of Alternatives 11
Appendix V: Decision Criteria Chart 12
TTC Midterm Exam 2

To: Rick Leary (CEO), Shannon Groulx (Chief of PR, SG Media) & Board of Directors
From: Algoma Consulting Firm
Date: July 2012
Introduction
TTC was first formed in 1921 by the City of Toronto to oversee the transit services of the
newly developing city. The service included streetcars initially and built its first subway network
in 1954 which was accompanied by a bus service to complement each other (Mark, 2012, p.1). In
the early 2000s TTC was one of the largest transit systems in North America due to the growing
size of the Greater Toronto Area (GTA) and the need for the service to expand rapidly to meet
the service demands of rush hour. Although TTC did face deficits in its revenues as it only
accounted for 70% of its budget with the other portion being subsidized by the Provincial and
Municipal government (Mark, 2012, p.1). This led to gaps in the service by not being able to
provide a reliable service for commuters and a harsh work environment for the frontline
employees who bear the burden of complaints. In 2010 TTC served an area with the population
base of 2.4 million people and carried 460 million passengers in that year (Mark, 2012, p.1), by
servicing that amount of riders it proved challenging to effectively receive the changes the
community wanted for their transit system. That poor channel of communication resulted in the
creation of the customer service advisory panel (CSAP), which was tasked with being the voice
for the consumers so the transit system can improve.
Policy changes and budget cuts have been a key factor in limiting the number of efforts TTC can
allocate to improving the transit system to fit the needs of GTA. This is displayed in the 10
percent which led to 311 positions being lost and the exploration of contractors (Mark, 2012,
p. 11) which can impact the service quality TTC provides its riders. As a result, service levels
may be reduced during rush-hour periods when they are needed the most to ensure frequency and
limit the impact of unseen events. Ultimately TTC suffers from being an in-between service,
which is essential to the public but not seen as essential to the province, which is why TTC must
use integrated marketing communications to showcase the vital service they provide every day.
Unfortunately, due to the high visibility of the TTC service, their brand, employees, and
equipment are under intense scrutiny daily. This means measures in employee protocol and
service maintenance must be done to ensure the image portrayed to the media and riders is one
focused on the experience of the rider. With comments from passenger stating TTC workers are
low-skilled labour (Mark, 2012, p.6), it places the task of connecting with riders and handling
their concerns on to the frontline employees. Which has not proved successful for the
organization, finding a permanent outline for customers to voice their concern is critical for TTC
to continue to receive the support of the city.
Problem Statement: With limited capital resources TTC must develop messages that convey the
values that TTC upholds as their standard to the riders, for passengers to fully comprehend the
numerous changes being made to improve service quality.
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Executive Summary

TTC has a renowned transit system that currently faces the challenge of meeting the
extensive demands of the Toronto population. They also currently struggle from a poor
communication channel to help provide support to the patrons they service in the GTA. These
factors mixed with a weak media presence has led to the expressed displeasure of the essential
transit service. This has impacted revenue, funding, and overall ridership numbers which have
begun to fall due to this lack of service detail, leaving TTC with few options to improve its
overall brand image to the consumer. It is crucial that TTC offers multiple outlets for customers
to provide their feedback, while also being notified on information that could delay their trips.
This is why TTC should move away from its e-Alerts system and develop a transit app platform
to help users plan trips, receiving urgent information, all while offering immediate customer
support.
Through this app TTC can connect with users through a unique communication channel that
differs from traditional media, allowing for more tech-savvy riders to voice their concerns
quickly. Which will help generate feedback to service changes that can be made to meet the
needs of the GTA. TTC will then begin to create a marketing campaign using their own ad space
in their vehicles to highlight frontline employees that make it their mission to providing a great
travel experience for passengers every day. This makes frontline employees more visible in a
way that does not involve customers voicing their frustration, but instead displaying their
appreciation for the service they provide. Also, TTC will promote its environmental initiative to
connect with Torontonians that are environmentally conscious and want a public transit system
to be part of the solution to reducing traffic & greenhouse gases. This will help TTC resonate
with the public they serve to ensure they are providing an energy-efficient service. Upon the
further adoption of the app TTC must use its new platform as a way to reduce cost and provide a
new sense of customer efficiency. By creating a transit pass that can be used on a rider’s
smartphone, it will develop a seamless platform where a rider just taps their phone on the card
reader to pay their fare. Resulting in travelling that is much faster for passengers, and if they a
rider does not have a smartphone a service card would be printed out from a self-serve kiosk in
the stations to offer the rider a better way to travel than waiting in line for tickets & tokens. This
will also be followed up with a communication strategy to ensure the adoption of these new
payment methods are smooth and provide a new convenience for the consumer.
Ultimately, TTC has the challenge of monitoring all their new channels of communication for
feedback & suggestions. But this can only happen if there is a new fundamental shift of
management focus on customer service and employee conduct. These will be the key values of
TTC that customers expect when using their service, and it will the selling point to choosing
public transit over taxis, rideshare apps, driving & biking throughout the busy GTA.
TTC Midterm Exam 4

Recommendation/Implementation
Considering all the potential alternatives (Ex. IV) and factoring the decision criteria
(Ex.V) it is recommended that TTC begin to launch a service app that can be a hub for live
service information. This will also be a way for riders to express their concerns or questions with
customer support numbers that riders can reach throughout the app. This app can connect with
the customer who would represent your typical TTC passenger since they will be able to have
delay, route changes, and other inconveniences that are known immediately. By immediately
offering this app it can help facilitate the e-Alerts program which was outdated and give riders
more control. The new TTC app will provide the organization with future expansion
opportunities like having your transit pass on your smartphone device to make the payment
method much more seamless. For riders without a smartphone service cards can be implemented
as a substitute to the traditional token & ticket option, as these service cards can be available
through a self-serve kiosk. To complement the app and new shift on customer service values will
be well-defined to ensure everyone at all levels are prepared and capable of interacting with the
public to the new professional TTC standards.
The next set of recommendations will focus on brand positioning & the buyer behaviours of
Torontonians. TTC operates in a diverse city that is known for being people-friendly and
environmentally conscious, this will offer TTC the opportunity to use some of their rented ad
space to showcase frontline employees and provide information to their role & why they enjoy it
so much. By doing this a passenger will immediately be drawn to understanding those who work
tirelessly to help make their commute a safe & quick experience through a more personal
connection from the write-up. In addition, TTC can highlight the environmental initiatives they
are achieving by reducing carbon emissions and the objectives they plan on achieving to expand
their electric vehicle fleets.

Short-Term (Immediate – 6 Months)

In the short-term, it is recommended that TTC looks to revise its internal levels of
customer service to ensure there is a level of consistency among all branches of the organization.
This change in addition to clear definitions in the management & union agreement defining
employee conduct is the first step to improving service for its passengers. By establishing
definitive wording to prohibit cellphone use or sleeping excluding break & lunch periods is
required to prevent the level of negative media the TTC and its frontline employees face. Once
there are clear guidelines for employee values and conduct, the organization can then shift its
attention to understanding how to effectively communicate and interact with their market
demographic. To achieve this goal TTC will launch a new mobile app to replace the other ways
of communicating information to the riders. The app will offer live information and changes that
could impact the route the rider travels. Customer service will be the main focus of the app by
having a dedicated section for passengers to leave their comments & concerns. There will also be
customer support lines for passengers if they have any immediate issues that they are having,
TTC will now have an open channel for communications for customer feedback. This feedback
can then be used to determine service performance, frequent route delays, or provide new ideas
to improve service.
TTC Midterm Exam 5

Medium-Term (6 Months – 1.5 Years)

For the medium-term TTC must improve its marketability to the city it serves the GTA,
which can be done through extensive research of the wide range of passengers that use their
service. When examining preliminary trends of a GTA consumer, there is a growing focus placed
on environmentally friendly products & services. This is an opportunity (Ex. I) that TTC can
capitalize on due to their increasing use of hybrid and electric vehicles (Mark, 2012, p.14) which
appeals to the Toronto commuter. By marketing their environmental plan and how greenhouse
gas emissions decrease when more people choose public transit over driving their vehicle, riders
will be more likely to be apart of the change. The TTC vehicles will also use ad space on the
inside to showcase the work experience of frontline employees and how they enjoy working with
the community they serve. This will allow customers to begin to empathize and appreciate the
work these people due daily to ensure riders reach their destinations. This will be a large portion
of the PR campaign because TTC needs to demonstrate that its employees help the city move by
everyone working together to keep the environment safe for riders and employees.
Long-Term (1.5 Years – 3 Years)
The long-term will involve continuing to grow in the customer service aspect by offering
ways to make travelling easier & safer. With the launch of the app earlier TTC can then look to
improve the customer experience further by allowing customers to use their smartphones as their
transit pass on a smartphone. This can expedite the travelling process by not having to purchase
tickets or tokens and just loading funds to the pass on their mobile device. For those without a
smartphone, a new service card will become the replacement for tickets and tokens which can be
obtained at a self-serve kiosk. This will also offer the benefit of preloading the card with funds at
home through the use of a computer. These service changes can reduce the load placed on the
transit operator as being a fare inspector while riders can enjoy the convenience of quick
payment methods that can reduce the overall congestion in stations. Accompanying the new
change will be new ad postings in vehicles to explain the result of fare evasion and making sure
riders understand the new ways they can use the transit system through the app. This strategy
will inform consumers about the harsh penalties while demonstrating the new efficient ways they
can use the service effectively.

Control & Feedback

It is important for TTC to monitor the usage & download rates of the newly launched app
to examine if it is being received well by passengers. TTC will also review the information on a
weekly basis to formulate a quarterly summary of what customers are experiencing with the
service to be presented to the board of directors and executives to see if any solutions are
feasible. The app will have a crucial role in gauging the customer satisfaction of the new transit
pass option that will be available through a smartphone. They can also use the user data to
determine how man riders sign up for this service, while also monitoring how many service cards
are being created for passengers.
TTC Midterm Exam 6

Contingency Plan
If within the first year of the implementation plan reception of the mobile TTC app is
poor, TTC should opt to place station ambassadors at major stations to help provide information
to travellers during delays or shuttle services. This would be an alternative to the app which can
offer travellers a human interaction that some riders may prefer over a phone. This reason it is a
failsafe is due to the number of resources required to hire, train, and schedule these new
employees to work. Although it would be much simpler to use an app to communicate this
information, passengers will be greeted by TTC employees who are looking to make their riding
experience a better one.
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References
Mark, K. (2012). Toronto Transit Commission: Service Quality and Customer Perception. Ivey
School of Business.
TTC Midterm Exam 8

Appendix I – SWOT Analysis

Strengths:

 World Renowned Transit Service: TTC has expanded its transit network in the city of Toronto
and neighbouring GTA cities, becoming an integral service many Torontonians rely on daily for
navigating throughout the city.
 High Brand Awareness: In the city of Toronto TTC highly visible due to the iconic bright red
colouring of streetcars, buses, wheel-trans & logo. Throughout the crowded streets of Toronto,
they are able to stand out because of this awareness of the brand and its services.
 Loyal Consumer Base: A large portion of the TTC passengers have used the service before and
understand that using the public transit system is more cost-effective than driving through the
busy streets of downtown Toronto.
 Strong Corporate Values: TTC has made numerous commitments to improving transit by
becoming more environmentally friendly, more accessible & operate at a higher frequency to
reduce wait times. With all commitments looking to improve the overall customer experience
with the TTC.
 Able to be Funded by Provincial & Municipal Governments: With the essential public service
TTC offers to customers, this allows the Provincial and City of Toronto to help subsidize new
expansion projects, bridge wage gaps in the company and improve the effectiveness of the service
Weaknesses

 Highly Visible in the GTA: As the main transit operator in the GTA frontline employees are
faced with more scrutiny & observation than other systems. Meaning any delays, employee
misconduct & poor experiences are in the public eye.
 Weak Communication Outlets: The use of Twitter and e-mail notices for delays isn’t effective in
aligning with the core values of the organization. This poor communication channel leads to poor
experiences for the customer.
 Poor Understanding of the Consumer Market: A media outlet reported TTC did not offer a
discounted transit rate for college and university students (Mark, 2012, p.3). The student market
segment is a consumer base that is not being explored as a stable consumer market.
 Customer Service and Feedback: In the post-purchase evaluation stage many TTC riders examine
1 key factor which is “did I get to my destination on time” and if not how come. What is
frustrating riders is the lack of customer service to why they are not getting there on time.
 Budgeting & Potential Fare Increases: With the cost of expansion, employee compensation &
quality improvements finding enough capital to fund new expenditure will become crucial to
TTC’s future success.
Opportunities

 Integration of New Technology: As new payment systems become available it will be more likely
that TTC can shift to a system that will ease the fare collector requirements from the Transit
Operators. While also providing customers a faster process to avoid congestion when paying the
fare.
TTC Midterm Exam 9

 Establishing Customer Ambassadors: These customer ambassadors will be dressed in red to be

easily distinguished and it will be their job to provide essential information on the go to riders
who have questions or concerns.
 All Electric Fleets: TTC has the ability to lead the transit industry by building an all-electric fleet
which will represent the views of many Torontonians that use the service on a daily. This would
improve the environmental plan and result in less greenhouse gas emissions.
 TTC Ads: Instead of renting all of the advertising space to organizations, TTC can use that space
to offer more information and encourage customer feedback on their riding experience.
Threats

 Alternative Means of Transportation: TTC must compete with taxis, rideshare apps as forms of
transportation a customer can purchase. They must also compete with consumers who choose to
bike to their destination or drive their vehicle. This places a tremendous burden on the transit is
system to be more cost effective that the competition and operate frequently to ensure the riders
can arrive on time.
 Employee Misconduct: If frontline employees are unable to follow the policy guidelines agreed
upon by management and the union, it will showcase a poor representation of the standard TTC
upholds.
 Former Chair stepped down: Adam Giambrone was involved in negative media which not only
impacted himself but the organization he represented as chair of TTC. His decision to step down
will allow the organization to begin rebuilding its image but will now leave passengers
wondering if there is effective leadership ready to step in.
 Workplace Safety: With frontline employees being in constant contact with the public there is the
threat of workplace hazards occurring like verbal/physical altercations, vandalism & biohazards
which employees should not be exposed to at work.
 Shifting Political Views: Since a portion of TTC funding is from the provincial government it
raises the issue of budget cuts and lack of funds for planned out decisions. The decision could
result in the government making TTC a privately funded organization which could result in
fundamental changes in service.
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Appendix II – PESTEL Analysis

Political

 With different political parties’ various opinions on public transit it is difficult when parties in
power do not share similar values of TTC. The proposed 10 per cent budget cuts by Rob Ford it
would severely impact TTC’s ability to promote their service to customers.
 Although some parties may opt to cut the budget, others may look to offer public transit as a free
service which would have a drastic impact on the service TTC. This shows the amount of
influence politics can have on the TTC’s services.
Economic

 Being one of the largest transit systems in North America TTC has an important role in the
economy by not only getting riders to their destination but being relied on by millions of
passengers to get to work in the city of Toronto.
 Increasing ridership will also increase the amount of maintenance expenses TTC will have to
ensure trains, buses, streetcars and wheel-trans vehicles are clean & operational. Any extended
period of fleet vehicles being out of service can result into loss of revenue by not having that
vehicle in service.
Social

 The city of Toronto is a truly diverse market and will require marketing communications that can
appeal to all different demographics to attract new riders.
 In Toronto there has been a conscious shift to cycling with the increase in bike lanes being
created on major road. This is an indication that the community is seeking an environmentally
friendly way to commute through the city.
Technological

 By implementing a mobile app to offer real-time tracking of the bus will give riders clear
transparency that they are seeking when choosing public transit.
 Other technology like self-serve kiosks to pay for fare or obtain tickets is alternative which
reduces the amount of wait time for a rider.
Environmental

 By incorporating hybrid and electric fleets is the main way to achieve their environmental plan.
In addition to this TTC must also ensure that their office & warehouse locations are following the
plan set out.
 With more electric vehicles TTC can market their sustainability and service to intrigue more
riders to take a break from driving and reduce greenhouse gas emissions.
Legal

 TTC must ensure its compliance with AODA (Accessibility for Ontarians with Disabilities Act)
to ensure that subway stations, buses, streetcars and other buildings are accessible by 2025.
Failure to achieve this as public service will result in fines and an overall distrust in consumers.
 When training employees’ policies & conduct must be emphasized to prevent any bad media.
TTC Midterm Exam 11

Appendix III – Key Success Factors

KSF’s

 Improving overall service efficiency & frequency to help boost ridership numbers, and
service satisfaction.
 Establishing more communication channels for passengers to receive information regarding
delays or potential route changes in a timely manner.
 Creating more employee policies that is strict on topics like cellphone use, sleeping on the
job and employee conduct with customers. In order to limit the occurrences of media poorly
representing TTC values.
 Aligning new service options that ensure a congestion free options for consumers to pay and
get on transit services.
 Securing funding from the Provincial and Municipal levels of Government by displaying the
importance of keeping the longest running transit system in Ontario public to prevent more
cost being placed on the riders.
TTC Midterm Exam
Appendix IV – Evaluation of Alternatives
Alternative Pros
CSR  Increased brand
awareness
 Increased ridership
 Improved brand
reputation
Environmental Reach  Improved reputation
 Distinguishing the brand
 Reach new customer
segments
Market Diversification  Reach new customer
segments
 Increased revenue
streams
 Ridership numbers
would increase as a result
12
Cons
 Costly undertaking
 Potentially unsuccessful
 Adding another
component to focus on
 Costly for taxpayers
 Time-consuming
 Potential for longer
maintenance times for
new vehicles
 Discounts could be
exploited
 Costly to implement
 Potential to over extend
service options resulting
in service gaps
TTC Midterm Exam 13

Appendix V – Decision Criteria Chart

Decision Suggestions are as follows:

A: Creating and launching a public campaign highlighting the environmental benefits of travelling by
transit. In addition, making a commitment to reduce greenhouse emissions and supporting other
organizations improving the way they operate.
B: Offering mobile ticketing with the use of smartphones to make payment seamless when using TTC
services, for those without a smartphone service cards that can be single-use or preloaded through self-
serve kiosks.
C: Using their own ad space in fleet vehicles to promote frontline employees by describing the roles they
do on a daily basis & why they enjoy working with the public. Making employees more personable to the
public they serve.
D: Developing a transit app to provide live information regarding delays or events that could detour &
impact normal travel.
E: Hiring new service personnel to assist & navigate customers through any delays or construction
interruptions that can disturb normal flow of service.