With a C suite full of airline executives, America’s chronically underfunded and much-maligned national passenger rail network, Amtrak, is expected to break even within a year—a first in the company’s 50-year history, if it happens.
Adweek spoke with Amtrak’s CMO and CCO Roger Harris, a former Aeromexico executive, about how to sell train service in the 21st century, competition in the transportation industry, and yes, the changes they made to the dining car.
This interview has been edited for clarity.
On social media, there was a bit of a backlash to the news that Amtrak would be killing the dining car. Did that surprise you?
Roger Harris: Well, we didn’t remove the dining car, we just kind of changed the way we use it. The car hasn’t gone away; it won’t go away. We’re no longer going to prepare food in bulk on the train. We’re going to prepare it and board prepared. It’s a nuance but it’s not like the car is going away.
We certainly expected it; there are a lot of people who are fond of history and nostalgia. For them, this is really important. It’s part of the experience of taking a long-distance train. We definitely understand that.
The problem is … if you don’t evolve to meet the needs of your customers, you’re going to become obsolete one day. So for us, with the evolution of the foodservice model, it’s more efficient to do it the way we’re proposing. We give our customers more choice in terms of the time of day to eat. We let people choose how to eat at the moment.
When you go into the dining car, you get assigned where to sit. You may have to sit next to strangers who you don’t want to talk to. And you eat when the chef is preparing the food. Now, you’ll get to sit in the same booth but choose who to sit with for a much longer mealtime.
I think some of the criticism was a little misplaced because it wasn’t a wholesale change.
From a marketing perspective, what’s unique about selling Amtrak?
There’s a lot of awareness of our product in the Northeast so it’s not hard to communicate about Amtrak [there]. Where we have much more of a problem is on the national level where our train goes through really thinly populated areas once a day. It’s one of the challenges of having a national network is that you’re just not as relevant to different points.
When we do market research, it’s surprising the number of people who think they have Amtrak service in their town when they don’t. And vice versa. The Amtrak brand has awareness but people don’t have an awareness of the frequency and time of the product we offer in markets. … It’s a tough challenge. We need to find ways to do it efficiently.
Can you market Amtrak the same way you would an airline?
We do a really good job of competing with the airlines in the Washington to New York market. We get about 75% of the combined rail and air market. We compete effectively with airlines.
But if you look in Arkansas or North Dakota where our train goes through once a day, our longer distance trains don’t really compete with air. That’s a different kind of market we’re catering to. Whether it’s local traffic between small towns that aren’t served by airlines or a long-distance passenger who bought a sleeping car because they don’t want to fly for some reason.
There are more than 10 different bus companies operating between Washington, D.C. and New York City for rates that are generally cheaper than both Amtrak and airlines. How does Amtrak compete for millennial and Gen Z travelers when rates are that low?
It’s the job of every responsible business executive to look down the road and make sure there’s a pipeline of customers coming.
We recognize that their needs and attitudes are different in terms of what they want and the trade-offs they are willing to make. We provide convenience, predictability of schedule, a more relaxing environment. You can get up and walk around the train. You can go to the cafe car. … It’s a little bit different than a bus or an airplane, even though we’re all competing in the transportation space, but the mix of amenities for the product is somewhat different.
We do look at bus pricing [and] airline pricing, and we don’t necessarily match them because we don’t think our product is the same, but we are deliberate in how we price.
What is Amtrak doing to attract these younger travelers?
When it comes to attracting younger customers, we are very conscious of Wi-Fi connectivity, how easy it is to buy our products. We just released a new version of our app in August.
We’re also looking hard at what younger customers want. That doesn’t mean that we’re able to deliver everything yet. But, we think about it when we look at our food and beverage selections; we think about it when we talk about station accessibility.
We also have more green credentials than a lot of other forms of transportation. It’s not just about the energy efficiency of moving one passenger one mile where we win on every dimension in terms of efficiency but also in the Northeast, we’re all-electric. On the south end of the Northeast corridor between Washington and New York, we’re actually getting 20% of our electricity from renewable hydropower. It’s a very sustainable way to travel.
How does Amtrak measure feedback?
We gather demographic data, and we gather customer satisfaction data. We analyze about 700,000 customer surveys every year. We look for differences between age groups in terms of attitudes … we are concerned about things like connectivity and choice.
Younger people have shown a strong interest in rail. Part of it is a global response. If you look at Europe, it’s even stronger. More people are carless.
In dense urban areas—the Northeast, Chicago—we offer the opportunity to avoid non-rail travel. We’re putting together the strategies to appeal to those customers better. I don’t think we’ve done that yet, but it’s certainly something that we’re trying to do. It needs to come from the heart; it needs to be core to the brand—not just a strategy for a few months.