PT the Auditor
Bank Customers Park for ‘Free’ – and Everyone Makes Money
Parking problems can be the same, whether in St. Louis or Tel Aviv
I tagged along with the boss on his trek to Israel, and was not surprised to find that they have problems in the Holy Land similar to what we have here, at least as far as auditing and garages are concerned.
I did notice that there are a lot of feral cats in Tel Aviv. I got a bit of exercise chasing them around. But I did discover that Israeli cats are tough, and I have a few wounds to prove it. But I digress …
We spoke to a number of consultants and garage operators, and the complaints were similar: “We audit the garage, find a lot of money gone missing, recommend changes to fix the problem, and the owner simply doesn’t want to hear it.”
This is much the same as we hear here in the good old U.S. of A. “Why should we spend the money to fix the problems? We can simply fire the current operator, find another one, and life goes on.”
I asked Amit Kedem, CEO of Central Park Ltd., a consulting firm and parking operator with 30 locations in Tel Aviv, just what types of theft he finds in Israel.
“It’s basically in locations that have no technology,” he said. “If they are running out of a shoe box, then there is stealing going on. If they have pay-on-foot and accept credit cards, then not so much.”
Amit doesn’t fight for every location. “I take locations where I can make a difference, and make money. What good is it to run a parking garage and not make a good living at it? I want to make the garage better, be able to market the location, and keep the customers happy. I select the locations I want to run.”
We toured one location, owned by the city of Tel Aviv, where he was doing some consulting.
“I know what needs to be done, but the city won’t spend the money to upgrade the control system,” Amit said. “It’s a decade old and virtually impossible to audit. It took me three years to convince them to install pay-on-foot. They wanted a guarantee that their revenue would go up. The fact that they would remove five cashiers didn’t seem to make any difference.
“I did the numbers for them, and they finally are going to bid. I won’t be bidding the location when the current operator’s contract is up,” Amit said. “Who would want to deal with a customer like that?”
Wow, did that sound familiar. Amit spoke a lot about his garages and the fact that they all are nearly empty after 4 p.m.
“After 4, the businesses begin to close and the garages empty out. I don’t like an empty garage, so I offer big discounts after 4 p.m. – up to 75% in some locations,” he said. “It draws in parkers from other garages in the area. I collect less per space, but if I didn’t offer the discount, the garage would be empty and I would get nothing.”
He also spoke with great pride about his “bank card” marketing ploy. He cut a deal with a local bank. Any bank customer entering any of Amit’s locations after 4 p.m. can park for free. The bank pays the parking charges.
“It’s terrific. They swipe their bank-issued card (debit or credit) and the system goes to the bank’s database and finds out if they are a customer. If yes, the gate opens and they can park. They exit the same way. I have a record of the transaction and bill the bank (at a discounted rate) at the end of the month.
“The bank loves the program,” Amit said. “They spent millions advertising it with my logo and telling folks that if they sign up for a card, they too can park for free. They are playing on the understanding that everyone wants something for nothing. My bills to the bank aren’t small, but they love it. You would be surprised how many people sign up just so they can park
all over Tel Aviv for free.”
What if owners and operators everywhere worked together like this to fill the garages when they are empty? No matter what you charge, it’s better to fill the garages than to get nothing. The idea of “free” parking for a customer of a bank, or other commercial organization, makes sense.
Amit said that the bank was concerned about its upside liability and, at first, set a flat fee for his garages. However, when the project became successful and the bank saw how much their clients liked the program, he was able to renegotiate his contract, particularly when technology caught up and he was able to show how many of the bank’s customers actually used the program.
Combine high-tech solutions with good old marketing and voila! More money in everyone’s pocket. The term is “WITFM.” – What’s In This For Me?
A good deal is good for all parties concerned. Particularly in Tel Aviv.
Woof!! And Shalom
Article Abstract from August, 2013