Increase Your Bottom Line – Sell Those Empty Spaces
March, 2010I audit a number of garages that are half-empty. They have literally thousands of parking spaces that are never filled. My owners see this as a fact of life, the economy, or just what parking is all about. They see parking as an amenity that is provided to tenants and visitors to their buildings. Fair enough.
However, a number of my customers own freestanding garages. They look at it differently. They want every space filled every day. Now whose responsibility is that? The owner says the operator should get out there and sell parking. Sure – like that’s going to happen. There are a couple of issues.
First, the operator may be competing with itself. Say the operator has a month-to-month contract with my owner, but has a lease on four garages within a few blocks. How is it to the operator’s advantage to sell space in my owner’s garage, when they could sell the space in their leased garages? When they do so, they make 100% of the monthly fee in their leased garage and little or nothing in the contract garage.
Second, there is that “little or nothing.” How can you expect an operator to launch a marketing program in a garage with no incentive to do so. They have to advertise, hire staff, perhaps install new equipment, and the issue is, “What’s in it for them?”
Running a marketing program isn’t easy. First, you have to figure out what you sell. Easy, you say; you sell parking. But is that really the case?
Do you sell a full-time 24/7 space? Do you sell space only “after-hours and on weekends?” Do you sell space only during the working day? Do you sell space on the “roof?” Do you sell “covered” or “uncovered” space? Do you sell “storage” where stack parking would be appropriate? Are you interested in increasing daily parking (theaters, restaurants, stores) and the resulting validation revenue?
And the list goes on.
Who are your customers? Are they fleet operators like government agencies? How about rental car companies? Are your customers workers in the surrounding buildings, or perhaps park-and-riders that use a nearby train station? Are there apartments or condos without parking available and folks who need to park only after-hours and on weekends? How about firms in nearby buildings that pay $200 a month per space and you could offer the space a block away for $150?
Do you advertise? Local throwaways, card decks, radio, TV, newspapers, bill boards, handouts, mail attacks? Which one works best in your neighborhood? Do you use a “rifle shot” or shotgun approach.
Let’s get back to the first two issues dealing with your operator. If you want the operator to sell spaces for you, you have to incentivize them. Give them a percentage of what they sell. If you give them enough so that it makes sense for them to invest in the project, they will. Don’t scrimp on this. Remember you have empty space that is getting you nothing.
If you decide to provide a lower percentage, offer to pay the expenses involved in the program. If you provide a higher incentive, the expenses can be included in the deal.
Worried about the operator competing with itself? You should have thought of that when you hired them. If your goal is to increase your numbers of daily or monthly customers, keep that in mind and ask hard questions when you hire your operator.
Find out if they are interested in increasing your numbers, or in just operating your garage. If their nearest location is 15 blocks away, it’s probably OK. If they have locations on every street corner surrounding your garage, you may have a problem.
Marketing is a business. Perhaps if you have a lot of empty space, hiring a firm to “brand” your garage and then think “outside” the parking box is a good approach.
There is a company that runs off-airport parking locations in a number of cities across the country. If you fly out of those cities and park, you know their brand. Their buses are garish and the name catchy: “The Parking Spot.” Good marketing. When you sell a commodity, you need to stand out.
My first step would be to determine what space you have available and then what markets it would serve. No need to sell more monthly 24/7 parking if you are full every day. However, if you are empty every night, perhaps it’s time to look at people who live in the area and work elsewhere. Selling reduced-rate night and weekend parking or restaurant, theater and valet parking could be the solution.
Be creative – it may mean you have to go down to your garage at all hours and see what’s happening there. But then that’s not a bad idea either.