Due to the explosion of new express carwashes opening everywhere and sharing the same pool of existing customers, the total number of cars washed at full service carwashes is dropping year after year. However, express wash owners also experience this issue. The biggest reason customers skip washing their cars is because of time constraints. Therefore, customers will normally wash their cars at the nearest carwash. It is all about convenience.
Increasing the number of cars washed per month is not the only option to
increase revenue. There are three ways to increase the revenue of any business.
Increase the number of first-time customers
Are you planning the future of your carwash by default or by design?
The old way of doing business to attract first-time customers is no longer as effective. Owners have to come to terms with the idea that working hard in their businesses is no longer a guarantee of success. Technology and the millennial generation have forced owners to have a paradigm shift and to rethink like a startup company.
Attracting new customers is becoming harder for existing carwashes. The old ways of remodeling, landscaping, adding value, creating an unforgettable experience, adding extra services and advertising are still viable for business success. However, to attract new customers, today’s successful business strategies also depend on positive reviews and online rankings.
According to Pew Research Center, in 2019, millennials, who are defined as ages 24 to 39, have surpassed the baby boomer generation, which is shrinking in size due to aging.
Today, 84% of consumers trust online reviews more than personal recommendations from a friend or a family member.1
The impact of internet search and new marketing technology has completely changed the game.
Millennials are generally dependent on technology, with mobile phones being the most popular means to connect with the world. Before making a decision to visit a business, they look up the industry and normally choose one of the top five highest-ranking companies with the best and most positive reviews. A business may be considered a best-kept secret if it does not rank in the top five on a Google search.
In December 2019, BrightLocal published a Local Consumer Review Survey on how consumers are using local business reviews, which revealed the following statistics:
- 90% of consumers used the internet to find a local business in the last year.
- 82% of consumers read online reviews for local businesses.
- The average consumer reads 10 reviews before feeling able to trust a business.
- The average consumer spends 13 minutes and 45 seconds reading reviews before making a decision.
- Among the consumers who read reviews, 97% read businesses’ responses to reviews.2
To increase first-time customers, brick and mortar companies have to invest in today’s technology and take advantage of available CRM software to improve their online rankings, increase positive reviews and privately resolve negative experiences before they reach social media — and, ultimately, increase revenue.
Increase the frequency of visits
Building personal relationships with your customers and promoting prepaid gift cards and unlimited wash programs are the most common and recommended ways to increase the frequency of visits of existing customers. However, is it enough? Do a majority of customers buy a prepaid card or join the membership plan you offer? Don’t we wish this was the case?
Having been in the carwash business for over 35 years now, our team has gathered and discovered some prudent statistics by tracking the license plates of customers who are not part of any unlimited wash plan. Here are some results:
- 50% of customers wash their vehicles once a year.
- 21% of customers wash their vehicles twice a year.
- 9% of customers wash their vehicles three times a year.
- 5% of customers wash their vehicles four times a year.
- 12% of customers wash their vehicles five to 11 times per year.
- 3% of customers wash their vehicles multiple times per month.
What good is spending thousands of dollars to advertise and attract first-time customers if you do not have at least one strategy in place to ensure they will become repeat customers?
If you implement a marketing strategy to wash 10 extra cars per day by increasing the frequency of visits of existing customers, the income generated from these 10 cars is practically 100% profit (minus the cost of water, power and chemicals).
Today’s technology is essential to give a small business the edge over the competitors. The goal of the business owner is to become a master of change rather than a victim of change. Technology moves so fast that sometimes it’s tempting to just throw up your hands and say, “I’ll never get up to speed.”
Fortunately, today’s CRM software is so advanced and very affordable. It can be programed by the developer to automate and implement many of the innovative and strategic ideas to grow your carwash profit exponentially. Technology allows you to spend time on what really matters to you: working in your business to ensure customers receive the best experience, while the technology works on your business to ensure those customers will come back soon, refer you to others and leave your company a five-star review on social media platforms.
Investing in an incentive-based marketing CRM software, with loyalty programs built in, can dramatically shorten the sales cycle. The faster you get someone to purchase, the sooner you get the next purchase. CRM software can help turn first-time customers into repeat customers, repeat customers into frequent customers and frequent customers into lifetime customers.
Increase dollars per transaction
Increasing the dollars per transaction is the fastest way to increase revenue. People will buy more than what they normally do if you give them enough reasons and incentives to do so. Do you want to sell more dollars per transaction? Redesign your menu and add unbelievable value to the top package so customers have no choice but to choose it.
Many operators believe that a ticket writer is important for two reasons: human interaction and increasing sales dollars per transaction. This is true, but the fact is that many customers never come back because of a pushy salesperson and poor service. Others believe that a pay terminal is the way to go to save labor, speed up the process and eliminate the human contact. According to our company’s research, the fact is that 53% of consumers today prefer to use a pay terminal while 47% love to have the human interaction and the personal customer service.
After all, people do business with people, not machines. People become loyal to a company because of the personal service they receive from the staff. Though pay terminals may provide customers with a customized service, they cannot provide a personal service.
A combination of both worlds is the best solution. Give the freedom to customers who enjoy the convenience and speed of making their own choices. Be ready to assist the customers who need help, approaching the prospects and educating them on their options without pushing.
Most people think that if they replace a human attendant with a pay terminal, the sales dollars per car will decrease. Though in some cases it is true, in others it is not. The question is: why?
There are many variables, but the bottom line all depends on the simple layout of the menu. The unbelievable value added to the top package will have customers thinking you are crazy for offering it for a couple dollars more compared to the previous package. This will entice them to choose the higher-priced package.
The menu should be simple with few options. Do not complicate and confuse the menu with too many choices. Customers prefer simplicity. Many sales are lost when offers are too complicated for the customer to make a decision. The number of packages offered should not exceed three, or a maximum of four. If your carwash has a wide range of offers, then redesign your menu with fewer options.
What made the fast food restaurant In-N-Out Burger® famous? Besides having fresh and quality food, it was the simplicity of its menu.
Keep it simple and colorful. Express pay terminal customers should not have to click more than two or three times before the pay screen appears.
The pricing strategy
The pricing strategy for the wash menu and the upsell page is very important in determining how many more dollars per car will be generated from the top package to grow the carwash’s profit exponentially. Many consumer behavior psychologists have conducted experiments about customers’ behavior and confirmed that restructuring the pricing strategy may help to increase sales dollars per transaction.
For example, at the concession stand at the movie theatre, a consumer behavior psychologist rearranged the price of popcorn and offered a small popcorn for $3 and a large for $7. The result was that 85% of the customers chose the small popcorn. When interviewed, the customers said they did not see value in buying the large popcorn for $7. Subsequently, the psychologists added medium-sized popcorn for the price of $6.50. This resulted in 85% of the customers choosing the large popcorn. When interviewed, the customers responded by saying that they saw value in buying the large popcorn for $7, because it was only 50¢ more than the medium-priced popcorn.
Prices of wash packages may vary depending on the state, competition and carwash location. Below is an example of what should be included in the packages and the price.
- $6 Bronze Wash: Basic wash, spot-free rinse and air dry.
- $10 Silver Wash: Everything in the Bronze Wash plus rainbow wax and wheel blaster.
- $11 Gold Wash: Everything in the Silver package plus wheel bright, surface protectant, tire shine and towel dry.
From the carwash owner’s or manager’s perspective, the first reaction may be, “You’re crazy, there’s too much value added to the Gold package.” This is exactly the same response you will receive from your own customers. “Twenty dollars in extra services for $1? This is a no-brainer.”
Obviously, this is to the extreme; however it works really well, and the carwash will see an increase in the sales of the top package, which will translate to more revenue per day and maybe an increase in referral and the number of cars washed. Adding a starburst to the top package with the message “Most Popular” or “Best Value” will help increase its sales.
The top package may have about $20 in extra value for $1 extra. However, the Silver package is overpriced by a dollar or two to increase the value of the Gold package and, therefore, increase sales. The only purpose of the middle package is to increase the value of the top package. If your carwash is selling 5% or more of the middle package, then you must redesign your menu to bump customers to the higher wash package.
It is convenient having a $10 package, because many customers pay with a $10 bill, and they may automatically purchase the $10 wash. You want to keep all that money, don’t you?
The real question to ask when pricing the Gold package is:
- What is the true cost of adding all these services for $1 extra?
- What is the value added from the customers’ perspective?
- Would customers and staff think I am crazy for offering so much value?
- Would this strategy help me sell more top packages and increase my dollars per wash?
The above Gold package could be priced at $12 or maybe $13 as well. However, the demand for the top package may drop a little. It all depends on your location and demographics.
Many customers are always looking for a higher and better package. A fourth package could be added.
Starbucks sells a cup of coffee for $3, but it has a $3,000 espresso machine for sale for those customers who are willing to pay. The idea here is to offer a higher package item for those few who are willing to pay more.
The Gold package could be redesigned to add a fourth option with even more value at a higher price. The $15 to $18 top Platinum package could also include a personal attendant to make the ticket, a free towel to dust the interior, free scent, a free newspaper, a free re-wash within three days and maybe a $5-off come-back incentive coupon.
The price difference between full service carwash packages could be between $5 to $10. It all depends on the added value per package.
You cannot blame a flood on one single drop of rain but on all the raindrops combined. There is not one thing you do to grow your business exponentially. It is all the little “wow” moments combined that keep customers coming back. You must provide an unforgettable experience every step of the way, starting with the landscape, paintings, value, greeters, bathrooms, waiting area, speed, quality, etc.
Give customers as many reasons as possible to come back more often. Become a destination business, not a convenience business. Convenience businesses are the norm — they are a dime a dozen, but destination businesses, on the other hand, offer an experience worth every dime. How many raindrops do you use to attract new customers and increase the frequency of visits and dollars per transaction?
How strong is your flood?
AJ Rassamni has over 30 years’ experience in the carwash business. AJ is a speaker, consultant and author of two books written specifically for the carwash industry: “Increase Business 30% in 30 Days” and “Dirty Cars Filthy Rich.” AJ is co-founder of MyLoyaltyApps, CEO of Great American Carwash and the president of the Central Blackstone Merchants Association. You can contact AJ via email at [email protected] or text (559) 284-1919.