PC&D MAGAZINE
Get your customers to pay now, buy later
From Volume 22, Issue 4 - April 1998
by: Paul Post
 
 Related Information
  Employee contest spurs token sales

 

A holiday sale brings in the bucks

Everty year, from early October to mid-December, the 44 Wonder Wash locations in Wisconsin hold a nine-week sale of carwash tokens that give customers 40 percent off the price of a wash.

The six-year-old program nets close to $1 million annually for the chain of mostly self-serve combinations, based in LaCrosse.

"It ends up being close to15 percent to 20 percent of our annual sales," says owner Bob Clements, "and we do about 75 percent to 80 percent of our annual token sales during this period."

Although tokens are available throughout the year with discounts of 10 percent to 30 percent, the deep discount comes only once a year.

"We put up a sign: `token sale on now,' says Clements. "Every customer that comes in is supposed to be handed a little card that explains the sale and the cost."

Wonder Wash also runs television and radio ads to promote the sales drive, and places ads in local newspapers. If customers bring in a coupon they get a free liquid towel.

Clements says the program has been so successful he doesn't dare stop it. But at the same time he's concerned about a downturn in regular sales during January and February, when customers are using the tokens they purchased in October and November.

"In some ways it's scary. We look at our average income per car and with all this couponing and discounting we sometimes think that maybe we've created an animal we can't control," he says. "We know it creates a great perception of value from the customer's standpoint. We know they love it. We know the customers come to our locations because of it."

Clements says it's "almost frightening" to consider not having the program. "That's $1 million worth of sales during this time that we wouldn't have. However, it changes your average income because of the deep discounts."

Still, Clements says Wonder Wash volumes have continued to grow where others haven't, so he believes it's the right thing to do.

"But I would love to not do it for a year," says Clements. "I just don't have the guts anymore."

 

Prepaid goes high tech at Rocky Mountain

Rocky Mountain Carwash in Denver has nine self-serve locations with a bar-coding prepaid plan. With Rocky Mountain's recent merger with Precision Auto Wash, the prepaid system is being introduced into Precision's other locations - 24 in Ohio and five in Indianapolis.

"We developed this system. That's one of the reasons I think that they've merged with us," says Wil Klumb, Rocky Mountain's former owner, who is now Precision's national manager. "Originally it was developed to track customers for wash frequency."

Fleets love the system, Klumb says, because it tracks their vehicles and lets them know when their account has to be replenished.

Under the system, the bar-coded material is entered on a card that the customer receives. When the customer enters the wash they swipe the card, which turns on the bay and deducts the price of the wash - $3 for self-serves and $5 to $6 for automatics, depending on the location.

"We're selling $30 worth of time for $25," Klumb says. "Also, we sell $65 worth of time for $50."

The card also keeps track of free washes. Customers get every sixth wash free.

"Of course that entices them back and also gives us some type of idea how often people are washing with us," Klumb explains. "It doesn't tell us how often they're washing, because they might be going to a gas station or another professional place, but it gives us an idea of their frequency."

If a customer doesn't show up for six months, Rocky Mountain offers a free wash, says Klumb, "to find out what their particular problem was."

And while Klumb comes up short when asked to offer any drawbacks to the system, he's quick to point out a major benefit.

"The pre-paid system allows us to get paid up front."

 

Take your pick of plans at Colonial

Colonial Carwash, a full-serve business in the Albany, NY, area, has three types of pre-paid plans:

 Coupon books

 Fleet coupons, sold in bulk at a reduced rate for car rental agencies and others.

 Colonial Car Club, a prepaid, unlimited wash card that's offered in three-, six- and 12-month increments.

Coupon books deliver a 20 percent savings, while fleet coupons are offered at discounts between 30 percent and 40 percent, based on volume, according to Colonial spokeswoman Nancy Fopeano.

"With the Car Club, there's really no way of telling what the discount is," she says. "If you wash more than once a week you come out ahead. You can wash as many times as you want."

All three options are popular. The Car Club has from 200 and 250 members at any time, Fopeano says, and most club members renew. "We do periodically offer 10 percent off for new members, people who have never belonged before," says Fopeano. "Essentially, people who see the value in it are professional people who use their cars for business."

Multi-car discounts are also provided for the Car Club, she says, including a 10 percent discount for additional cars registered at the same time.

"The fleet works well for some of the rent-a-car companies," Fopeano says. "They purchase fleet coupons in bulk, then the driver just takes the coupon and it's very easy for them to deal with."

Colonial doesn't track its coupon books or fleet coupons by customer.

"We do know the number of prepaid coupons we take in on a daily, weeky and monthly basis," Fopeano says. "They're just logged in as prepaid."

Car Club members, however, have a code that is scanned in every time the card is used, so Colonial can track how often these customers wash their cars.

Each option has advantages and only minor drawbacks, according to Fopeano.

"The Car Club is very good because it's front money, and secondly we've been paid no matter if the season is a good one or a bad one, weather-wise," Fopeano says. "If the card expires at a given time it's up to the customer to determine whether it's used. We have a fixed income from that particular sale."

With coupon books, if the weather is bad and people aren't washing, the coupons last longer and they buy less frequently, she says.

"On the other hand, we feel people do wash more frequently if they have coupons, because of the convenience," says Fopeano.

While bookkeeping is minor, she says the Car Club is more labor-intensive with each individual sale because of the steps that have to be followed to properly implement the card.

"But we find it well worth our while," Fopeano says. "On balance, the good far outweighs the bad."

 

Coupons may breed customer loyalty

Benny's Car Wash has two full-serve operations in Baton Rouge, LA, where the only pre-paid plan is books of coupons. But it's a strategy that works quite well, particularly at Christmas time, spokesman Justin Alford says.

"It's a good gift item," he says. "It's a book of five washes. We give 33 percent off the price of a wash."

That drops the price of Benny's $10.95 carwash to just over $7 for coupon-holders.

While Benny's tracks its oil-change customers, but not for carwash coupons.

"We'd like to, but it's a complete hassle," Alford says. "We have two locations and we haven't really found a good way to keep track of those locations. Cashiers may enter information wrong. They may misspell somebody's name or type in somebody's license plate incorrectly. So the customer gets another card, then their license plate's not right anymore."

He says developing customer loyalty is the most important advantage to offering coupon books.

"For somebody who's price-conscious, it's a great saving," Alford says. "If they have the book in their hand they're going to come to you. They really are."

Even when quoting fleet deals, says Alford, "We just tell people to buy the books because that's the best offer we can give."

The downside, Alford says, is obvious.

"It's a good chunk of revenue lost," he says. "Also, I don't think those people tend to buy as much extra services. When they come in with just a ticket, it's already prepaid and they don't get vending items, too."

Benny's has considered offering club plans, but has a hard time getting people to pay a year in advance.

"Maybe we just have too many other options such as the books that people can buy one at a time," Alford suggests. "In other parts of the country, some people pay a year in advance, but here in the South it hasn't worked."

Paul Post is a free-lance writer in Fort Ann, NY

 

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