Lukasz Patecki, CEO & Founder at Parkalot, coded the app himself and launched it in 2016. In the first year of operations, he managed to convince a few companies to try out his software. Three of them became his first paying customers. At the time, he was doing most of the things himself – developing the product, providing customer support and managing accounts.
In 2017 Lukasz started looking for someone to help him with picking the right business model and getting a steady flow of new prospects. He had an in-depth understanding of the parking management market and strong software development skills, but lacked expertise when it came to strategy, growth and digital marketing. We took this challenge and joined Parkalot as a „collective” employee #3 in August 2017.
Let’s take a quick look at our process and contribution to Parkalot. Firstly, we explored the product, customer data and competitors. With this knowledge we proceeded to map the existing business model and how it can be improved. Using Business Model Canvas, we distilled Parkalot’s value proposition, what makes it unique, who is the ideal customer and what the pricing strategy should look like.
Having the foundations in place, we rebuilt the website and started exploring various acquisition channels. As soon as the funnel started to fill up, we switched our focus to the conversion rate. To optimize it, we used a wide range of product and marketing tools – from in-app onboarding and trial length to marketing automation and content.
Below you can find the main takeaways from this exciting business journey.
At the very beginning Parkalot lacked a clarity about how to communicate what it is, what problem it solves and what makes it special. We presented Parkalot as the simplest parking management software, requiring no hardware, easy to set up and flexible enough to recreate any corporate parking policy. The main business benefits we communicated were increasing the car park’s efficiency and the drivers’ satisfaction.
We targeted mostly larger companies, but also prepared dedicated offerings for homeowner’s associations (HOA) and university campuses. These latter two segments seemed promising at first, but eventually their contribution to the revenue remained marginal.
The job titles of people responsible for managing their organisations’ parkings or improving their usage varied greatly – from office managers to project managers to IT support. After testing various job titles across social and display ads we learnt that our ideal user is easier to identify not by who they are but rather what they search for. In other words, whoever managed a big enough internal car park and looked for a way to increase its efficiency was in our group of interest.
The existing customer base of Parkalot consisted of corporations operating in English and located either in Europe or North America. That’s why we decided to run all our marketing channels in this language and focus our efforts on „English-first” markets like the UK, USA, Australia, New Zealand and the European Union. Serving multiple languages was not feasible at this stage of startup development.
Initially, Lukasz – inspired by various software development software he had used as a software engineer – planned Parkalot to be a self-service platform with rather inexpensive pricing and low-to-no client support.
After learning more about the product and its current clients, we quickly realized that we will need a very different approach. Setting up all the parking rules was a challenging task for new users and many of the new admins were not very technical. The enterprise sales process, user onboarding and technical support were all very time consuming. Also the revenue from the first few Parkalot’s clients was relatively low, ranging between $100 and $400 a year (some of the companies were even using it for free as their access was not blocked after the end of the trial period!).
We suggested increasing the price significantly and splitting the pricing into 4 plans depending on the number of parking spots. Later on, we made sure that while testing the user is encouraged to upgrade to the paid version and that it was not possible to use the app after the trial ended. This new setup proved to work pretty well, boosting the average revenue per client by 5x.
When it comes to the online presence of Parkalot, we had to start with the basics. The website has been completely redesigned to better communicate the offering and be able to convert traffic from new sources. We built it on Wordpress to speed up the process and cut costs. We sorted out a rather tangled situation with domains, moving the main website from about.parkalot.io to parkalot.io (where the web app was initially located). We also fixed some Google visibility issues (previously it was difficult to find it even using branded keywords).
As the website was ready, we started testing multiple acquisition channels – including Google Ads, Facebook Ads, Linkedin Ads, Capterra, email outreach and some others like Quora, resellers and events. We have explored each of these channels thoroughly to assess how many trials they can bring and at what cost.
Targeting transactional keywords with Google Ads was by far the most successful, bringing high quality leads at good CPL. One of the key success factors was a tight control over negative keywords, to make sure that our ads don’t show up on specific parking lots, hardware-related requests or informational queries. Capterra was the second best channel with an even better CPL but smaller scale.
To track the progress and channel performance we configured Google Analytics and Mixpanel. All the key figures were displayed in Data Studio dashboards. We analyzed and discussed the data regularly on our weekly catch ups.
As the marketing funnel started to fill up with new leads, we focused our efforts on improving the conversion rate to paying clients.
The trial period has been shortened from 3 months to 14 days to introduce some time pressure on new users. We implemented some basic email sequences to onboard and convert them to paid. Together with Lukasz, we’ve developed an in-app onboarding process to further improve the flow. The entire sales pipeline was tracked in the freshly configured Hubspot CRM.
On top of that we led content creation efforts, adding FAQs to the website, creating various guides, organizing webinars and even managing a production of a video explainer.
Soon after a kick-off in August 2017, Parkalot started seeing a growing stream of new users and paying customers. Within a year, the number of weekly active users grew 10x. The number of clients increased 4x whereas the revenue per paying client reported a 5x growth. The lead generation engine set up back in 2017 has been working well until today, delivering a steady flow of leads. In 2022 Parkalot reported over 400 paying clients among international corporations, including brands like Canon, CBRE, Bonduelle, Konica Minolta and Roche.
„While gaining traction and not generating profit was the main goal, by the project’s end, the results exceeded the cost by an order of magnitude”.
„As the Parkalot team was really small, we appreciated Skalski Growth's ideas about how to structure the work. We felt like a lot of tasks were accomplished without our effort”.