Amtrak campaign takes direct route

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As a federally subsidized company that has never been profitable, Amtrak's fiscal record is one most CFOs would scoff at. A direct marketing campaign under way by the railroad, however, is getting a response rate most chief marketing officers would kill for.

The campaign is one of the most ambitious to date for the National Railroad Passenger Corp., better known as Amtrak. Since it began sending about 50,000 direct mail pieces to executives, travel agencies and consumers in December, about 7,500, or 15%, have responded to enroll in the program.

Typically, offline direct marketing programs that generate response rates of 2% to 6% are considered successful.

The "Amtrak Guest Rewards" program, which the campaign is supporting, is intended to increase loyalty among enrollees by offering them free travel points that can be used on everything from rental cars to hotel rooms, whenever they ride Amtrak.

Amtrak's solid direct marketing showing comes at a time when it needs it most. The federal government wants the Washington-based railroad, which is almost wholly owned by the U.S. Department of Transportation, to be self-sufficient by 2003. To do that, it needs to encourage business users, particularly those in the lucrative Northeast corridor, to use it more often. "Business travelers are incredibly important," said Gail Blumenson, Amtrak's senior director of loyalty marketing.

Though business travelers only account for one-third of Amtrak's passengers, they are its most desired demographic. "[The business traveler segment] represents a lot of frequency and therefore drives a lot of revenue," Blumenson said.

A good deal of Amtrak's direct mail pieces were sent to business riders who live along the corridor connecting Boston, New York, Philadelphia and Washington. The railroad is keen on convincing these riders, many of whom work in finance or as lobbyists, to take the train rather than an airline shuttle.

Shortly before Amtrak launched the direct marketing program, it rolled out Acela, a high-speed train designed to cut Northeast corridor travel times. The Acela train, a sleek departure from Amtrak's typical coaches, is attracting a good deal of media buzz. It is also helping to convince some business users, weary of delayed departures from New York's airports, to switch to rail.

Indeed, some of the success of Amtrak's direct mail campaign can probably be attributed to the Acela, which has been much touted in ads. But it also stems from its integrated marketing approach.

"We had a very aggressive solicitation campaign beyond direct mail," said Dick Dunn, VP-consumer practice at Carlson Marketing Group, which is handling the campaign.

Much of Amtrak's home page is dedicated to touting the "Amtrak Guest Rewards" program. The company also sponsors e-mail enrollment campaigns, displays ads inside its coaches and hands out fliers at key Amtrak stations.

Minneapolis-based Carlson Marketing Group focused in particular on travel agencies. It sent out about 300 direct mail pieces to agencies.

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