While the fresh coat of paint is still drying on the walls and the directional lines are being adhered to the pavement outside the tunnel or bays, it’s never a better time than now to implement strategies that will build your customer base. In fact, if you’re still in the initial stages of acquiring or building a new carwash, being mindful of the power that subscription-based membership programs provide these days can mean higher valuations as well as elevated customer experiences. When done right, membership ensures recurring revenue for operators and can deliver a strong value statement to customers, creating customer advocates and loyalty in the end.
Combined with advanced processing technologies, wash membership is abuzz in the professional carwashing industry — and for good reason. We spoke with several insiders to understand what new operators specifically need to know in order to start, maintain and profit from these programs.
Unanimously, all of the experts we interviewed for this article agree that the best time to start a membership program and promote it is at the grand opening. It is common for carwashes to offer discounts and free washes during the initial weeks of opening a location. This is prime time for membership sign-ups, according to our experts.
Brad Metcalf, Northeast regional sales manager for Innovative Control Systems (ICS), notes that customers are almost trained to expect specials and deals upon a new business opening. “The opportunity is highest when the customer is seeking a deal at a grand opening, such as something free or discounted. There should be multiple ways to identify and encourage customers to enroll in the club plan [during this time],” he says.
Customers visiting a new wash for the first time will be drawn to certain areas of the site. If you’ve incorporated a lot of flash and creative marketing imagery, the little details will likely be appreciated during subsequent visits. Therefore, when looking to promote your membership program during your wash’s grand opening, maximize messaging opportunities through a planned approach.
For example, adds Metcalf, pay stations that actively sell and promote the plan, digital menu signs that encourage loyalty programs through custom graphics and video streams are all good ways to promote membership to new customers. Also, “four-color printed brochures on bi-fold or tri-fold forms as well as human greeters to engage customers while at the wash [will also help drive sign-ups],” he says.
Signing customers up to the membership program at the grand opening also ensures that your carwash either just stole a customer from the competition or these members will not get a chance to even try out the competition.
Jerry Goldstein is EverWash’s car wash business and membership program consultant. He is also among the top carwash operators in the country who has had great success growing a membership program in a relatively short period of time. His wash, Clean Machine Car Wash in Glenside, Pennsylvania, has amassed over 4,000 members in just six years. A third-generation carwash owner, Goldstein has specialized knowledge in running a successful membership program. From this experience, he elaborates on how grand openings and membership marketing efforts are a good combination to gain a competitive advantage today.
“There isn’t a better way to grow your customer base than to sell memberships from day one,” educates Goldstein. “Selling a membership at this stage — as customers are trying the new site and getting a taste of the quality of service they can expect — will help your business lock in a solid customer base from the start and take market share away from competitors. Paying automatically each and every month will prevent your members from trying your competitors, making membership the ultimate loyalty play a new business can make.”
What are some of the most important factors in creating an effective membership program that will benefit the carwash and the customer? In order to answer this question, it’s important to understand today’s customer. Customers seek convenience and value these days. Many customers now prefer do-it-for-me services that offer a wide array of payment options, including mobile and app-based.
Identify strong value statements, including in services and pricing, and then make sure these messages translate clearly to the customer. “Customers must see value, and it needs to be simple. There is a lot of value in pricing, but also make your options easy to choose from. Don’t overcomplicate the menu signs, and also maintain a club pricing system that is easy for the customer to see the value in them,” reiterates Mike Jorgensen, sales manager for XpresWash.
Jorgensen also notes that sometimes operators don’t realize the potential of membership programs and fail to account for the increased volume and how it will impact wash equipment. As a result, another important factor in running an effective membership program is investing in equipment and system maintenance and stocking replacement parts while saving for new equipment purchases in the future.
Related: Building a better loyalty program
Still, the first and most important member of any loyalty program is you — the operator. If you don’t believe the program is of value, then it will most likely ultimately fail to be a success. Buy-in from the top down will help create more sign-ups and enthusiasm about the program.
“First and foremost, it is important that operators believe in the model and commit to it,” echoes Jared Richards, founder of Coinless, adding that in order for the program to be a success, there also needs to be ease of adoption. “Second, make it easy for customers to sign up and use the program.”
Richards also urges new operators to speak with other operators who are currently finding success with loyalty programs and not be deterred by common misconceptions, such as losing profits from heavy users.
“If you stick with it and get the full spectrum of customers — the high-use customers, the low-use customers and the average-use customers — then you’re trading maximizing revenue per transaction for consistent revenue and higher volume at your site,” says Richards, noting that heavy users should be “embraced,” because these customers are the exception and not the rule. “Don’t forget also, activity breeds more activity.”
When comparing membership customers to pay-per-visit customers, the experts offer a profitable outlook. According to Goldstein’s experience, a member is four to six times more profitable than a single paying customer. And, he adds, “The average single paying customer only visits four times a year, whereas members pay each and every month. This means members become more profitable than single paying customers by their third month on the program.”
Sweet spot in pricing
Trade shows and industry events are great places to pick up knowledge on maintaining successful membership programs and setting pricing. As Jorgensen reminds us, “The carwash community has a lot of bright minds, and many are gracious enough to help operators, even if they are just down the street from them.”
In addition to fellow operators, Goldstein recommends speaking with distributors as well as manufacturers and system providers regarding pricing.
Also, Metcalf sheds light on possibly the most important people to get feedback from on pricing — the customers. “Determine what they are willing to pay and then design the loyalty program around that,” he recommends.
Regardless of the resources you use, remember, the membership program is all about creating value. In addition to being mindful of what the competition is doing within a 1-, 3- and 5-mile radius, experts say there are general industry guidelines to consider when deciding on prices for your membership programs.
“The overriding industry recommendation is 2 times the base price,” educates Metcalf. “This encourages the customer to only use the wash twice per month and not get cornered into using it three or four times per month to pay for the plan.”
Once you’ve determined the prices, payment transactions are the next consideration. As Jorgensen notes, customers are becoming more and more comfortable making purchases through mobile devices. “And, for owners, they want to see all the data at their fingertips, and many solutions offer that [access and visibility today],” he says.
While most new — and many experienced — operators put an emphasis and focus on new sign-ups and activity of existing members, it is churn that might be the most important metric to follow when gauging the success of your membership program, states Richards.
“If you’re only looking at new sign-ups, then you don’t really understand your wash club,” continues Richards. “Churn is a good indicator to determine if you’re running a good membership program or not and at an adequate value that provides a great customer experience.”
If you’re analyzing your membership program’s churn rate and don’t like what you see, Richards says you should ask the following questions:
- Are people cancelling because they have seasonal residence?
- Has new competition emerged in the area?
- Do people feel that they are not getting their money’s worth because you have a poor value statement?
- Is customer service — whether real or perceived — considered poor at your location?
- Is wash quality an issue, or has damage occurred?
Once a customer commits loyalty to your wash, it is your job to ensure a high-quality wash on a consistent basis. By doing so, you’re building trust and loyalty and creating customer fans who will spread the word about your business around town to friends, co-workers and family. However, if a customer encounters even one bad trip or consecutive disappointing visits, his or her experience might result in lost business beyond that one customer.
Your engagement in the program and in wash results are of utmost importance. “If you don’t jump all in by making it easy to sign up and don’t deliver value statements, you’re doomed to fail from the get-go,” Richards concludes.