Rap and Revenue Control
While driving home from a conference recently, we realized there is quite a bit that rap music can teach our industry about parking and revenue control. Who knew all we had to do this whole time was jam out to some tunes!
The industry is changing more rapidly than ever. New niche players spring up seemingly every month with the next big solution. Our industry’s own data revolution is in its infancy, and the concept of “revenue control” is more important than ever, and should be at the forefront of every owner’s and operator’s operations.
Before we dive into the topic, let’s take a step back and define the term revenue control, as it’s long been a key concern in the industry that has surfaced in almost every industry publication since Nixon took office.
In the most basic form, revenue control extends far beyond sophisticated PARCS equipment and software, and more broadly defines the process of collecting the entire parking fee from a person who has chosen to park a vehicle in a facility.
Here are some key takeaways we learned on our recent drive:
“See I’ve been drinkin’ champagne all night. Never worry ‘bout a damn thing and y’all might …” – Wiz Khalifa
Often we tend to get in our comfort zone and fail to recognize that the environment around us is changing. Whether a person parks daily or via recurring contract; whether that facility was paid for by swiping a credit or access card, paid by phone or by handing over cash, using a validation, walking up to a kiosk or merely catching the view of an LPR camera – all that is beyond the scope of this discussion.
Continuing to have a strong handle on these processes will lead to a better understanding of operating efficiencies and basic measures that should be taken to prevent revenue erosion. This is an ongoing process that needs to be reviewed as your operations change, new people come onboard, and “materiality thresholds” are triggered. Plain and simple: Don’t get complacent.
“I know the price, know the risk, know the wrongs, and the rights …” – Jay-Z
If you haven’t figured out how to beat the system, someone has. It’s absolutely the responsibility of the parking provider to ensure that potential points of failure are identified so that opportunities for others to make self-serving decisions are eradicated.
Many parking professionals we have talked with know at least one way to scam their own facility: a gap in facility monitoring times, a software shortcoming or even a hardware loophole. The problem is that if one person knows about the gap, many others know about the gap! Just the other day we carried a large metal object over a loop detector to test whether we could bypass a control …
“I guess you lose some and win some, long as the outcome is income …” – Drake
OK, great, so now it’s time to rush out and start shopping for the best solution, right? Not so fast!
This is where materiality comes into the equation. It’s important to weigh the cost of implementing a control versus the overall risk of the exposure. In many cases, you can implement mitigating controls by adjusting resources and using the tools you already have available.
We know that equally important to controlling the revenue is controlling those around that revenue. Limit opportunities for those around the treasure to steal, manipulate numbers or lie – whatever it may be. Points of failure should be identified and evaluated after each discovery.
“I want it all, man. I never learned how to share” – Drake
The progression of our industry is dependent on the willingness of competing software and hardware providers to work with one another in order to serve their shared clients. Operators should have the freedom to choose the software that best serves their respective facilities. An unintended side-effect of open frameworks is the inevitable exposure to new or additional vulnerabilities.
Failing to integrate properly will also make it more difficult for a parking provider to identify points of failure. Moreover, a failed integration will most certainly lead to lost revenue or upset parkers. How many times have you heard of a municipal parking solution failing because of integration, only to find that one software provider is pointing fingers at the other?
On the flipside, closed-architecture environments have rarely been advantageous to the customer in any industry. Arguments against integration range from attempts to rescue diminishing margins to security concerns or poorly designed systems. Regardless of the reason, when operators are forced to push a square peg through a round hole, they are often left with an overabundance of unused software. This is not in the best interests of any party.
“You know how much you love it when you get it in abundance … ” – Mac Miller
So you get that new solution, and it has all these great bells and whistles. What people find is that they may have introduced more problems. In fact, less than 10% of revenue software is actually used (per PT the Auditor).
Not sure whom to blame for this – the parking provider who has not trained garage employees or its management properly; the software provider for designing a system that is too complicated to be effective; or the hardware vendor for providing an inferior but proprietary software solution, yet forcing its use through a closed-architecture environment?
One of the most common risks of failure is most certainly the acceptance of cash as consideration and best practices for handling currency. From shrinkage to throughput issues to limitations on dynamic pricing options, cash has proven a hindrance to the parking industry. Fortunately, as more access control processes move into the “cloud” via electronic payments, the use of cash is diminishing year over year.
With this trend, we have seen the increased importance of data mining and security; after all, aren’t data the new currency? In fact, data are currency in one of its most liquid forms. Equipment and processes should be sought out that provide relevant and actionable data and that can communicate effectively with legacy and incoming systems.
Strategic decisions based on these data will result in operational efficiencies and push toward revenue maximization while improving the parking experience.
A better parking experience
The parking process can be simplified through the use of innovation and technology. A very clearly defined and frequently audited revenue control plan that ties into the parking provider’s ultimate goals and limits shrinkage opportunities is crucial to lay out before purchasing a PARCS solution.
And vendors should be selected that are willing to effectively integrate both back- and front-end software in the best interests of the client. By doing so, parking providers will be given the best opportunity and clearest runway to understand and analyze their facility data to improve operations.
So maybe Drake and Wiz Khalifa weren’t talking about parking, but the concepts are universal. Revenue control should always be top of mind, and maybe that’s why we heard it on the radio! What has the music industry taught you about parking?