We all know about the horrible economy and how today, clients and
prospects are holding on to their cash. Are you getting tired of hearing this:
“Thank you for your bid, but our budget has been slashed for the year, and
unless you can give us your product (or service), we are not moving forward
with any improvements until at least next year?” Words like these can
certainly ruin a perfect day. The same way losing to the Cleveland Browns
can ruin a great football season.
Many products and services that the readers of PARKING offer have
benefits that can be calculated from a financial position, but they also have
subjective values as well. For instance, say you offered painting services
like Tech Painting Company in Alexandria, Va. In new construction,
painting bids are received and are easily justified.
But what about this scenario? A parking garage owner has a dingy, run
down property and thinks a paint job would improve business. How do you
put a price tag on what you are willing to spend versus the benefits that the
new paint job might offer? How much can you afford to pay for the paint job?
In Indianapolis, Denison Parking, upon taking over Sideline Parking
(now called 121 East Maryland), immediately repainted curbing at the
entrance of the garage, hoping that the impact of the new paint might bring in
more parkers, and the increased revenue would help validate the owner’s
decision to change management and select Denison. Denison paid for the
painting themselves. It is very hard to put a price on the value of the painting,
but Denison was willing to take the risk and spend the money. They
decided that the subjective benefits of the new paint would calculate into a
financial benefit.
Traffic and Safety Control Systems Inc., the Amano distributor serving
the state of Michigan, offers fantastic and proven parking technologies. As
a ticketspitter ages, occasional service calls are required. I was witness
to this one day while visiting Traffic and Safety on a call some months ago.
The owner would love to have had a new ticketspitter, but the question for
him had to be, what is the value to me and what can I afford to spend?
Will it make me more money or not? Will a new ticketspitter bring in more
parkers? Can I charge more because I changed it out? Will I save enough on
service calls to justify the expenditure?
Other day-to-day decisions like, do I un-man (and un-woman) some or all
of my pay stations, bite the bullet, go ahead and install pay-on-foot systems
in my facility? Will the salary savings, the mysterious missing money savings,
and the management savings be enough to justify the capital expenditure?
Every day, decisions like these are being decided over cups of Starbucks
coffee and Dunkin Donuts. In a tight economy, unfortunately many of the
decisions coming out of the boardrooms are simply...no. Not yet.
Call me in six months. Next year. I’m sorry, while we love your product,
we had to take multiple bids and frankly, your price is out of line.
The point is simply this: Unless we can prove a financial payback in a
measured and acceptable time frame, our products and services, in today’s
market, will continue to become increasingly difficult to sell.
Here is the twist. Let me introduce you to a method to help turn a subjective
desire into a financial decision.
Let’s go back to Tech Painting. Suppose I am a garage owner whose
strongest desire is to repaint my parking deck. My facility is dingy,
dark, dated and not at all inviting. A parking garage across the street
just painted their ceilings, walls and columns white. They also used exciting
cool neon reflective paint colors to identify their parking levels. I am
neon green with envy! What to do? My board has dried up all the money
and unless I can give them valid and sound financial reasons to pay Tech
Painting to do the services I desire, I’m stuck with what I have - an uninviting,
dingy property.
While this is enough of a scenario in itself, let me add another level of
complexity to this. Suppose, as the parking garage owner, I am four years
into a five-year management contract with my property manager. While
my management also wishes the deck were pristine white, they really want
to find a way to make as much money for the owner as they can during this
final contract year, so that when it comes time to sign a new deal, it goes
to them again. But, there are some issues with the ticketing devices. They
are old and problematic.My property manager wants to replace them and
so do I.
How do I get what I want—new paint and new ticketspitters? I have
no money; just a cranky board of directors.
What we need here is a Money Train! Let me introduce you to the money
to get these items done—lighting. The way to get the owner to move
forward is to provide a financial value to validate the projects. So, why
not take the significant energy and maintenance savings of a lighting
retrofit, add the cost of the paint job to it and possibly the cost of the new
ticketspitters to it as well, and present the total project to the owner? Where
a lighting retrofit may take just three years to pay back based on energy and
maintenance savings, adding the raw cost of a painting upgrade and new
ticketspitters to the lighting cost will still have an attractive payback to the
owner, and it will meet their subjective desires as well, supported by a
financial validation.
Here are the equations:
Painting + Ticketspitters = no project
Lighting Replacement + Painting +
Ticketspitters = project
To drive this home, please allow me to quickly justify the Money Train. I’ll
try to be as brief as possible. If your parking garage is illuminated via 175
watt Metal Halide lighting, 150 watt High Pressure Sodium lighting or T12
Fluorescent lighting, you are sitting on a gold mine of money to do whatever
you want on your property. Any of these old, high energy, high maintenance,
short life technologies can be replaced with state of the art, proven,
low energy, long life, low maintenance induction lighting, and the financial
justification is simple.
I am the owner, and I am approving any project with a payback of six years
or less. In that, I just told you that I have an additional $150,000 to spend
on my subjective needs. Painting upgrades will cost $87,000 and new
ticketspitters will cost $60,000 for a total of $147,000. As an owner, I can
now use my lighting changeout (my financial validation) and get improved
lighting performance and look, and also get the new painting and deck
identification with cool neon colors, as well as some new ticketing technology,
all paid for by lighting, at no cost to me. Can you say board approval?
Creative property managers across the country are throwing in lighting
retrofits for free as a means to extending their contacts with their existing
customer base. In today’s market, anything you can do to keep a contract
re-bid off the street is something you need to consider. As a property
manager, your owner will appreciate that you are looking out for their best
interest. After all, isn’t that why they chose you in the first place?
In dealing with property owners, ask questions. Get to know what they
want. What is their hot button, their pet project? If you are listening correctly,
you will hear their subjective desires, the ones that are harder to
justify. You will hear what you need to do for them to get the job.
If you are a reader of my regular PARKING monthly column,
Marketing Minute, you might recall a story of a trip I took to Boston some
years ago. While working for another company at the time, a client at our
Boston feedback session complained that our pricing was too high and not
affordable. I challenged him as to the kind of car he drove. He was taken
back. He really didn’t want to admit that while a Yugo or Kia could get
him to work, his subjective desires had him driving a BMW, and in his
mind, he could rationalize the value.
Why not take advantage of the strong subjective desires of property owners
to move forward on projects that stand alone and are hard to justify, but, by
sprinkling in a dash of financial justification through a lighting replacement,
can give them some legs?
Your take away today varies on what role you play in the business equation:
Property owners: Contact a reputable lighting company to learn how
much money is available to move forward on your pet projects. One of
your desires may be simply a lighting upgrade. If you learned one thing
today, lighting change outs make you big money. What are you waiting for?
Property managers: Contact a reputable lighting company to learn how to
use lighting on your managed properties to extend your contracts and get
pet projects completed.
Other parking industry suppliers: If you sell painting services, power
washing, gates, ticketspitters, tickets, elevators, HVAC, or whatever, lighting
could be the answer to your dilemma. Combine the piggy back of lighting
changeouts with your product and offer package deals to your owner
relationships. Call a reputable lighting company today to find out how much
money you have available to spend.
Be creative, be aware. Hop aboard the Money Train Express to destination:
Success!
