Profit potential through customer retention
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customer retention, employee retention, churn rate

Operations and Management

Profit potential through customer retention

Subscription-based programs have transformed the industry by offering operators reliable, steady income, regardless of such external factors as the weather. Previously, a rainy month or season could cost an operator thousands of dollars. This is not necessarily the case for carwashes that are able to successfully manage a well-established unlimited or loyalty club plan today.

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In addition to the speed and convenience that membership programs offer, manufacturers are adding value to tunnels and bays in the form of lower operating costs, advanced tech and show elements. Club members are receiving a better product — as are pay-per-visit customers. Retaining as many customers as possible becomes of utmost importance.  

Many operators today focus on new marketing programs and different strategies to recruit new business. These efforts are important to grow, and there is no question about it. What is oftentimes up for debate is how much effort operators make to retain customers. 

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As many carwash chains grow and their focus is dispersing across multiple customer bases rather than just one tied to a single location, the quality of managers and lead employees as the face of the carwash and our industry is key to customer retention. 

Why is customer retention so important? 

It’s a well-known fact that it costs five times as much to attract a new customer than to keep an existing one. 

Studies by Bain & Co. note that increasing customer retention by just 5% can help companies boost profits by 25% to 95%. Also, according to a blog and infographic by Invesp, this potential is so high because the probability of selling to an existing customer is 60% to 70%, while the probability of selling to a new customer is between 5% to 20%. The blog adds that current customers are also more likely to try a new product and spend more when compared to new customers.

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I recently spoke with one veteran carwash operator, and we discussed the time when owners once stayed on-site most days to shake hands and get to know customers’ families. The carwash was a community destination where everyone knew your name. 

There is no doubt marketing has changed since then, making it easier to attract new customers away from competition. It’s also true that customers are seeking fewer personal transactions these days, making it harder for employees and owners to foster relationships. However, it’s not impossible, especially as many washes are capturing more of customers’ information.  

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