Are you thinking of adopting or growing an unlimited monthly plan program? You’re not alone. In fact, monthly unlimited plans are one of the fastest growing areas in the carwash industry. Unlimited plans provide a way to level out the peaks and valleys of a wash business due to seasonality, weather, days of the week and more. One of the biggest benefits is that they build customer loyalty while creating a steady monthly revenue stream that grows larger over time.
Becoming a standard
Changes in consumer habits are fueling the growth and success of unlimited plans. With the promise of increased value and convenience, it’s no surprise an unlimited monthly offering has been embraced by today’s consumer. Look no further than the wildly successful business models deployed by consumer subscription services for streaming TV or movies.
Spotify, Amazon and Apple all have an unlimited monthly music subscription service. Smartphone carriers are also seeing the benefits of a flat monthly rate for unlimited service and data streaming, which is a big departure from the previous pay-as-you-use model. It doesn’t stop there, either. This trend has even hit brick-and-mortar movie theaters. A new company, MoviePass, now allows you to purchase “unlimited” movie viewing in the theater for one monthly price.
As more consumers embrace this monthly plan model across their other purchasing choices, you have a fantastic opportunity to be viewed as someone who has a pulse on their needs, especially as it relates to value and convenience.
Change in perspective
Embracing the move to unlimited plans suggests you may need to look at your business a bit differently. For example, you should consider the fact that unlimited plans drive higher per-customer revenues, which is different than thinking about per-car revenue amounts.
To illustrate this point, let’s say that Customer A is a monthly plan holder and pays $40 per month, equaling $480 of yearly revenue. Alternatively, Customer B is a pay-as-you-go customer who comes in once a month for an $18 wash. The yearly value of Customer B is only $216 — less than half as much as Customer A. How you value and prioritize those two customers can reveal a lot about your interest to support and grow a successful monthly plan program.
You will also want to understand that when you initially launch an unlimited plan, early adopters will tend to wash more frequently — at least initially. Any feeling of “being taken advantage of” is normal, but realize that this is a good sign, as it means customers are seeing value in your offering. Increased wash frequency per customer tends to subside over time.
As your plan membership grows, it will normalize and fall to more predictable volume levels. You want to create raving fans of your wash and unlimited plans. When customers appreciate the value and convenience you provide, the news will spread. That viral lift is critical to driving down customer acquisition costs.
Stretching marketing dollars
Another huge benefit to an unlimited plan is decreased customer acquisition costs. Let’s say you run a marketing campaign that focuses on increasing traffic to your carwash, and after the results are in, you learn that your customer acquisition cost for the campaign was $20 per customer. While you may have enjoyed a bump in revenue from the campaign, you will need to repeat it over and over to realize any significant lift overall.
Each time you advertise, you are also basically starting from scratch trying to generate business. If that same campaign is run with a focus on growing unlimited monthly plan customers, you may spend the same $20 per customer, but each customer will bring you many multiples in revenue over time by paying you a higher recurring monthly amount.
Using the earlier example, Customer A will bring in $480 for the year while Customer B will be an $18-per-wash customer with unpredictable frequency. Not to mention, you may need to market to Customer B again and again with incentives to get him or her back to your wash on a somewhat regular basis.
When you have a growing base of recurring revenue from monthly plans, you are in a better position to spend more on advertising and marketing. This increase in marketing will continue to increase your recurring revenue, and the entire cycle will create very positive momentum for your wash. Activity breeds activity, too. When you have a steady stream of cars, other people see it and want to know what’s going on. Those curious potential customers will come with little to no acquisition costs, and if they also become monthly plan members, all the better.
Lastly, once customers are part of your monthly plan program, they are more closely tied to you, allowing you to market to them directly. Not only does that lower your overall customer acquisition costs, but it also effectively removes them from the market, making the potential customer pool smaller for your competition.
The role of technology in monthly plan success
Creating a wonderful experience for a monthly plan customer starts with delivering on the promise of a fast, effortless process that ends with a clean car. Technology can play a big part in that. To start, consider deploying unattended payment terminals to promote your unlimited monthly plans to each customer as he or she approaches the wash entrance. These great tools deliver a consistent message and never take a day off.
Upsell opportunities are also possible with monthly plan members through the payment terminal. You should also make signing up (and leaving) the plan easy and available both online and in-person. Many customers today are web savvy and prefer to interact through a computer or mobile device.
Once customers have signed up for a plan, streamlining them through the wash process will deliver that VIP feeling they seek. The most widely used method is to install a Radio Frequency Identification (RFID) tag on the customer’s vehicle, usually on the windshield.
RFID tags and RFID tag readers at the wash entrance are the most reliable and durable way to confirm a monthly plan member’s program and provide access to the wash. There are literally millions of these tags installed on vehicles all over the country, and they have survived the test of time and harsh conditions.
License Plate Recognition (LPR) technology, as available today, has much lower rates of effectiveness and often requires an attendant to manually verify the information captured from reading each plate. This process is more labor intensive and forces the customer to wait while an attendant manually looks for the match, leaving the customer without the VIP feeling he or she expects.
Some wash locations have even added or created a dedicated lane for monthly plan members to further enhance the status of these customers.
Wrapping it all up
While unlimited monthly plans may be just what you need to provide an elevated and unique level of service to your customers, there are some considerations that may represent a change in philosophy for you and your wash. As with any initiative, when starting or attempting to grow a program focused on monthly plan development, the key success factors start with proper planning, goal setting and resource allocation.
Think about the number of plans you’d like to secure and what percentage of your current business that represents. Allocate funds and resources for promoting your unlimited plans, and train your staff on the importance of converting customers to them. Leverage technology to help sell the plans, and ensure that the customer experience for your plan members delivers on the promise of fast service and excellent results.
An unlimited monthly plan can be a game-changer for your wash if you approach it correctly. These plans have contributed in big ways, by turning average-performing sites into very profitable and busy locations. There are many examples of washes that have quickly built thousands of monthly plan customers through the proper mix of strategy, technology, support and focus. Those companies are enjoying a steady and reliable stream of income every month, regardless of the weather. You too can enjoy the many benefits of an unlimited plan offering. And, your customers will thank you. Happy selling.
Joe Shoemaker is the vice president of marketing for DRB Systems and Unitec. Reach him at [email protected].