The last decade has not been kind to Via Rail.

Government subsidies to the Crown-owned passenger rail carrier were gutted. Services, particularly in the West, were scaled back. Stations were looking dowdy. Purchasing practices were inefficient. An aging reservation system put travellers on dingy trains that were frequently late.

Marketing Via Rail was a challenge, but one that was willingly taken on by the Crown corporation and its marketing partners. And while it would be presumptuous to credit the Via Preference loyalty program, first launched in 1996, with resurrecting the train service, things are looking up for the rail carrier. Operating revenue is up about 40%, rolling stock has been buffed, on-time performance has improved, costs have been corralled and passengers can self-book online through a direct interface with the main reservation system.

That being said, the objective of Via Preference was to increase ridership and revenue by attracting and retaining loyal customers. And to that end, the program has been successful. Members average seven trips aboard Via trains annually, and some riders take as many as 40. And now Via is taking the program to the next level. Program architects are moving from acquisition mode to recognition.

Dubbed the Via Preference Reward Program and aimed at current members, the newest incarnation is designed to ‘clinch’ the most loyal customers who bring the most value to the passenger rail carrier.

‘During the first three years of the program, we concentrated on acquisition,’ says Pamela Rice, Montreal-based marketing director for Via Rail’s corridor (Windsor-Quebec City) service. ‘We wanted to acquire members and build up our base, which is now around 200,000. What the relaunch does is allow us, firstly, to be more in the business of providing more recognition for rewards. But it will also allow us to get to know who our customers are.’

At its core, the Via Preference Reward Program recognizes members in three tiers: Preference members, who get one point for every dollar spent; Privilege members (two points per dollar); and Premier members (three points). There are varying levels of qualification, ranging up to Premier members having to earn 4,000 points in a year.

Under the old scheme, Preference was divided into gold and regular categories, based on whether members spent more or less than $1,000. Travellers enrolled in the program were eligible to receive free train trips. Now, the program incorporates partners such as hoteliers Radisson, Best Western and Novotel, as well as Hertz and Bell Canada, where members can earn points doing business.

‘In our new recognition phase, we wanted to greatly expand the services and benefits to our customers, especially for our members in the higher level,’ explains Rice. ‘We also wanted to differentiate the program from other programs by making it more personal and something they could relate to as an individual. By having a good profile of the lifestyle of these people, we could change the whole look of the program so it talks to them and who they are – which in fact relates to their choice in taking the train.’

Via Rail, along with its agency the Carlson Marketing Group, has done customer research before, but it wasn’t terribly detailed, says Rice. For Via Preference, the train operator went to Compusearch Micromarketing Data and Systems in Toronto and studied the travel patterns of its customers. Via determined where its frequent travellers lived, created a map, and then assigned them to cultural segments. After crunching the numbers, Via learned it had high penetration in some 60 segments.

‘This is what allowed us to move to the recognition phase of the program,’ says Rice. ‘That is where we want to clinch the loyalty of these people. Yes, rewards are important, but in our world, recognition is now very important. It helps us secure the most loyal customers, who have the highest value to us as customers.’

Raija Koski-Bruce, account director with Carlson Marketing Group in Toronto, adds that acquisition, especially at this stage, is not always the best approach.

‘We’ve done the profiling and research, which will help underpin this campaign and ensure we are on track with the re-launch material,’ she says. ‘So we have a very good understanding when we do go into acquisition mode. We are evaluating all of that to make sure we need to have acquisition, because sometimes that is not always the best strategy.’

According to Koski-Bruce, Via will go with a ‘soft launch’ direct mail campaign to communicate the new program to its members. They will receive a teaser in their next statement, advising them of the new options and rewards in the offing. Early this year, application forms will be refreshed and updated, as will POP collateral, exterior material and the Via Rail Web site.

‘We will also be working with travel trade on this, trying to get them excited about the program,’ says Rice. She adds that Via will not be using outside lists to gain new prospects.

In addition, Via Preference will also include an inbound telemarketing component starting later this year. It will be in the form of a ‘virtual call centre’ in which Preference members’ calls are prioritized and queued before other customers.

‘It doesn’t mean other customers will be waiting two hours,’ notes Rice. ‘It’s just Preference members are just a bit ahead of the queue.’