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Channel Exhaustion: Balancing the Risk of Having Too Few or Too Many Partners

October 9, 2017

Todd Tucker

Parking asset owners and operators face a constant challenge with the selection, deployment and management of numerous affiliates, “channel partners” and resellers. Gone are the days when there existed only a few revenue stream classifications for a parking operation.


The historical category of transient, for example, no longer simply means daily or hourly drive-up customers. Transient might now include a wide selection of additional digital channels available to drive revenue and exposure for a parking program. These include ParkWhiz, TripAdvisor, Groupon, Yelp!, Expedia, Google, Waze and many more. Further complicating the landscape is a never-ending parade of new entrants.


Choosing too few channels might leave more opportunity for traditional sales, but make holes in serving the full market opportunity. On the other hand, too many sales channels could create unreasonable administrative burdens and operational confusion.


These considerations prompt a simple question: Should decision-makers seek as many sales channels as possible, or should they take a selective approach that focuses on quality over quantity? Making the wrong choices can result in suffering from “channel exhaustion.”


In any business, an uncovered market represents lost opportunity. Pinpointing the right channels – with the highest probability of productive output relative to the administration burden associated with it – is of paramount importance.


The concept known as the Pareto Principle applies here, which states that 20% of your partners/channels will generate 80% of channel/partner revenue growth. However, for parking operators with razor-thin operating margins, each addition of channel growth can be the difference between black versus red on the bottom line. Channel partnerships are a great weapon for capturing more of the so-called “long-tail” revenue opportunity.


And with that great weapon comes change. Many channels are on their way out of business, and in some verticals, new kinds of partners are getting into the game, especially those born and bred in “the cloud.”


How would you recognize an up-and-coming channel that has what it takes to grow channel revenue, if it has yet to hit a home run? What channel managers need is visibility into a channel’s ability to generate demand, taking into consideration these five points:


• Evaluate your current channels. Are they growing? Are they flat and stagnant? Are their previous growth trends slowing down?


• Assess possible new channels. Every channel partner may possess unique, highly loyal users of that channel, of which you may be missing out on.


• Ask existing and future channels for information. How many unique users do they have? How many markets are they in? What is their marketing spend? Do they have special channels of their own to drive performance (e.g., ParkWhiz has an exclusive partnership with Ford)?


• Consider redefining what is “reasonable” as to the quantity of channel marketing partners you are willing to invest time into. Plan for more administrative resources to support a wider stable of future channels, allowing you to expand your reach and ensuring you capture each incremental dollar to drive your bottom line.


• Avoid channel conflict, which is offering different rates on different channels. It will skew outputs and make accurate channel comparisons difficult, if not impossible, most certainly creating channel exhaustion.


The parking marketplace will continue to accelerate in terms of sales only from digital channel opportunities. Off-airport parking sales online or with apps, for example, are now more than 40% of that total marketplace, and growing. Similar growth patterns are being seen in most parking verticals, indicating that more consumers are finding their way to parking assets through a digital channel.


Spreading your time and effort thinly could leave you channel-exhausted. Yet, with more parking business being transacted digitally, can you afford not to use all channels available to you?


Effectively competing tomorrow might very well require you to expand your allocated resources and allow for more channels today.


Todd Tucker Senior Vice President, Market Development for ParkWhiz. He can be reached at ttucker@parkwhiz.com.



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