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How to make a profit with parking - according to Ed Graumans

A recent study in the Netherlands, the National Parkingtest, showed that parking is suffering from a bad image among customers. Everywhere you go you hear people complaining that “Parking is too expensive” and “Why can’t parking be free?”. People don’t realise that when they pay for parking, they actually pay for the product ‘parking’ which includes the service in parking facilities (think about parking guidance, signs and signals and alternative payment methods) and on-street enforcement to make sure there are parking spots available for visitors. People have the idea that it’s unfair to charge them. They often don’t see that paid parking is necessary.

The National Parkingtest had three important conclusions:

  1. The costs of parking increased more than the average costs. This means that parking became more expensive in relation to other products and services.
  2. In several cases the unit of time to pay for parking increased. An example is that customers have to pay for parking per hour, in contrast to pay per minute or per five minutes. This will cause people to leave within that one hour period.
  3. Municipalities use the income from paid parking to balance their budget, and use this money for other purposes than parking.

These three points are the main reasons that parking has such a bad image. Ed Graumans explains in a video interview how to improve the image of parking and increase the customer satisfaction. Ed Graumans is a well-respected mobility consultant.

To improve customer satisfaction, according to Mr Graumans, is to improve the overall experience of paying for parking. He compares paying for parking with having dinner in a restaurant: If the food and the service was good, you as a customer are willing to leave a nice tip. If your soup was cold, the waiter rude and the toilets dirty, you won't come back again and definately won’t leave a tip.

Also, everybody has to acknowledge that free parking is not the answer. Business owners cannot ask the city or parking operators to lower the price or to make parking free. No, business owners and parking operators must acknowledge the fact that they have a common customer: the parker. For parking operators it is important that the customer visits their parking facility and for the business owners it is important that the parking facilities are good and well-functioning. Instead of complaining, work together!

Here are some points to increase profit on parking:

  • With today’s technique, the overall experience of parking can improve a lot, which will increase customer satisfaction. Think about paying for parking: Make sure there are multiple ways to pay for parking and make the process as easy as possible.
  • Parking can be a lot friendlier. As said before: Make the units of time to pay for parking smaller. Pay per minute, per five minutes or ten minutes. Don’t let the customer pay per hour! This first started when parking operators wanted to be smart and create more revenue. “Let the people pay per hour, so when they park for 61 minutes, they have to pay for the full two hours”, they must’ve thought. But actually this backfired: When people have to pay per hour, they will make sure that they leave within that period.
  • For most people parking is necessary. It is not something people want to do, but they simply have to. That is why you should make this necessary action as fun as possible for the customer. This includes creative ideas like a lottery among the parkers. Another example is to lower the rate after the first three hours of parking. This way you ‘reward’ the parker for parking this long. After all, it is extra revenue when people stay longer.
  • Business owners need to stop asking if parking can get cheaper or for free. Business owners should understand that you can’t ask another company to lower their price: Parking operators also have to make a profit in order to exist. If business owners want to have a say, they must participate. They can do this with a financial contribution in order to make it possible for parking rates to drop. This is already introduced in new shopping centers. The business owners located in the shopping center want parking to be free. To be able to do this, the costs for parking are automatically included in the monthly rent. The parking operator and business owners work together to keep the price of parking as low as possible for the common customer.
  • The customers are not the cars: the costumers are the people! You should not focus on just the people who visit by car but you should have a customer-oriented approach towards all the visitors. Some people visit by car, some by bike, some people choose public transport and others walk. If you're going to subsidize parking, you should also reward the people that choose, for example, public transportation. Doing this will lead to customer loyalty.

Concluding Mr Graumans’ story;
municipalities, parking operators and business owners must acknowledge the fact that they have a common customer and should work together. They can do this by making a marketing plan, promotion-, financial- and organisational plan. The key is to work together and think customer-friendly.

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