One of the often-touted benefits of having a subscription wash program is that it helps smooth out the peaks and valleys inherent with carwashing. Usually, those peaks and valleys are due to weather. But, what happens when the valley is particularly deep and wide, like in an economic downturn? The coronavirus pandemic has given us the perfect case study for that scenario. Quarantines — both government-mandated and self-imposed — hit retail businesses extremely hard, and carwashes were no exception.
Our company was curious about whether subscription wash programs made a difference in how carwashes withstood the pandemic, so we dug into our data for some answers.
Which boat are you in?
It’s been said during this pandemic that we’re all in the same storm, but we’re not all in the same boat. Our research revealed that the presence or absence of unlimited wash programs played a significant role in determining which “boat” operators found themselves in.
We compared our company’s operators that offer unlimited wash plans with those that do not. Sites that don’t offer plans suffered a 66% drop in revenue during the first wave of the pandemic shutdowns (March 22nd to May 18, 2020) compared to the pre-pandemic period of this year (Jan. 1st to March 21, 2020). Comparatively, sites with unlimited wash plans sustained a far lower 32% drop.
Similarly, volume dropped 62% for operators without unlimited plans versus 30% for operators with plans for the same time period.
Put another way, operators that offer plans washed 239% more cars and earned 165% more revenue during the pandemic than washes relying on retail sales only.
Behind the numbers
This shouldn’t come as a huge surprise. The very nature of the subscription model means you automatically earn revenue from members every month regardless of weather or economic conditions. Unlimited wash plans have something else going for them: contactless transactions.
As evidenced by the popularity of grocery pickup and online food ordering, consumers are looking for ways to reduce or eliminate touchpoints when purchasing goods and services. The unlimited wash plan facilitates this perfectly. After customers buy a plan at a wash that has radio frequency identification (RFID) or license plate recognition, they have zero interaction with a staff member or pay station when they go to wash their vehicles. They don’t even have to open a window for service.
Another little-known side effect of unlimited plans is that they create activity at your wash, and activity breeds activity. If people driving by see other people washing their cars, they will think that maybe they should too. In addition to creating reliable recurring revenue, the activity unlimited plans create can increase your retail volume and revenue as well.
Building a strong plan
If you don’t already have a subscription plan, hopefully, this will inspire you to start one. And, if you’re just getting started in the industry, we hope you see how important these plans are for carwash success. It’s critical as you design your unlimited plans that you have the right tools and technology partner in place to ensure success. Here are some things you’ll want to consider.
Point-of-sale (POS) system
If you select a POS system designed specifically for the carwash industry, it will undoubtedly include some unlimited plan functionality, but you want to make sure that it will accommodate your needs — not just now but as you grow. Switching POS systems after your program is running can be tricky, especially when it comes to transferring members. The system you select should be able to handle multiple wash plan levels and be able to automatically recharge members monthly to renew their plans.
One of the hallmarks of a successful unlimited wash program is automatic vehicle identification. It increases the convenience factor and, as mentioned, creates the contactless transactions consumers want during a pandemic. The “veteran” technology for vehicle identification is RFID, where you install a tag on members’ cars and an RFID reader scans the tag to recognize and accept them. License plate recognition is starting to overshadow RFID, because it doesn’t require a tag, and it allows you to identify all customers, not just members. This enables you to deliver personalized marketing messages and encourage frequent visitors to become members. You’ll want to research all the available options to determine what will work best for your wash and its customers.
When you pair license plate recognition with a mobile app and/or an online store on your website, customers can complete the entire process of purchasing a wash plan without ever having to interact with a staff member or pay station. They simply provide their license plate numbers when purchasing the plan. Then, when they go to get their cars washed, the system automatically scans their license plates, associates them with the plan purchased and allows the members into the wash.
Make sure you are regularly looking at unlimited plan sales and usage metrics. This will help you identify ways to optimize your plan. For example, if sales are down, you might want to dig into your pricing or look at your promotion strategies. If you see that your highest-level package isn’t selling, you might want to consider how you can better convey its value. Selecting a POS system with robust and accurate reporting allows you to make these observations and get the most out of your subscription plan.
Prepare for the next storm
If unlimited wash plans can help in such a sudden and extreme situation as the coronavirus pandemic, they will undoubtedly help you weather any other storms that come your way, both literally and figuratively.
Related: 5 ways to create winter growth
If you don’t have an unlimited wash program, now is the time to add one. And, if you already have seen the benefits of an unlimited plan, consider ways you can optimize it to boost volume and revenue. The more you put into your subscription program, the more it will give you in return.
Harold Guthrie, denizen of the digital world, is DRB’s sales operation manager and its resident Numbers Guy. A graduate of the University of Akron with a degree in mathematics, Harold toiled for IBM before he came to the company in 1994. A consummate numbers guy, he has conducted numerous engineering studies on a wide variety of DRB products. When it comes to figuring out the meaning of figures, Harold is clearly DRB’s number one choice.