People who wash their cars at a carwash facility have some really crazy ideas about carwashing that border on superstition. Bad experiences or word-of-mouth stories are how myths are created. Some of which seem to circulate amongst customers, and I’m certain you’ve had to address them on numerous occasions.
The same goes for marketing and promotion efforts. There are myths that you might be believing and considering, and this article will hopefully put you on a factual path.
It’s time to re-think your strategies
I get to talk with hundreds of carwash operators every year about what they are doing to promote their carwash. Most carwash locations are not built on a multi-million dollar piece of dirt getting them rock-star visibility with the public. Many carwash locations have been struggling to rely on old-fashioned marketing, if they are marketing at all. Let’s be clear that good old-fashioned marketing is exactly what you do not need if you’re trying to differentiate your business and create a loyal customer base.
Traditional marketing relies on heavy discounting to generate volume. Old school advice recommends traditional advertising like the yellow pages and radio ads (both of which are desperately trying to maintain relevance as primary means of procuring your ad dollars). Carwash operators need to rethink their game plan nowadays. They also need to consider the following myths commonly held by carwash operators.
Myth #1: When business is slumping, I just need to send out a bunch of coupons.
FACT: We all enjoy small wins, right? We love to get the exhilaration from seeing a spike in wash counts, the palpable anticipation of seeing the numbers for the end of the day. I’ve found that these jumps in car counts coincide with optimal washing weather or when some kind of promotion drives people into a washing mood (usually this is because of some big giveaway, giant discount, or coupon).
So we’ve established that big discounting drives up business (well, no kidding — consumers love to not pay full price). Where the house of cards starts falling down around operators is when the “big discounts” cease to be a special event and turn into the norm, and people work their washing habits around your sales.
So now you’re trapped in this catch-22 and find yourself in a pickle. You realize that you now only get customers when you’re discounting, and you’re discounting because you need to get customers into the wash. Since this is not an editorial about breaking bad discounting habits you get the short answer: Stop sending out straight-up discount coupons without getting something in return. Use discounts to build a club, grow your mailing list or support a local charity fundraiser. Use the discount as the piece of cheese in the mouse-maze and influence your customers’ behaviors.
Myth #2: If Joe’s carwash down the street lowers his price, then I will need to match or beat his price.
FACT: It’s absolutely insane to be so fixated on what your competition is doing that you lose sight of what you are trying to do with your business. If you try and make price the differentiating factor between you and your competition, you’ve already lost. If your competitor raises his price to match yours, maybe it’s time to increase yours to keep a price lead.
Never forget that you cannot be all things to all customers — once you accept this and work on making your business unique you’re going to have more money in your bank account.
Myth #3: I used coupon books to rope ‘em in, and they work just fine.
FACT: Coupon books work, that’s absolutely true. Are there other alternatives with higher profitability, more flexibility, which resonate better with customers? (I realize I’m leading the witness on this one.) Of course there are! Don’t hide behind the excuse that your customers like losing coupons and knowing that they are out the money (good for you, very bad for the consumer). What is my call to action? Investigate your other options because if coupon books are your only promotional tools, then you’re behind the times. You could be losing out on a lot of great modern advances that will make your job promoting the wash both easier and can open up a lot of new avenues of promotion.
Myth #4: I’m going to make a bunch of money doing some of those popular and trendy Internet promotions.
FACT: The reason that I would clarify this as a myth is that it is more likely that instead of making a lot of money there will be the opportunity to capitalize on the exposure of a program like Groupon. In fact, the reality is that most businesses that run a mass-market/mass-discount (MMMD) promotion like Groupon won’t make money, but they might bring in more customers. (See the cover story for more on how to use the Internet more effectively).
When planning a MMMD promotion, the first and most important thing to think about is what is going to be your follow-up response to those coming in to redeem the promotion. There is going to be the temptation to just mail out a code or a coupon or something that requires very little effort to redeem — making it simple is going to be the temptation. But what really needs to happen is the response needs to be one that builds off of the discounted visit. This is what I refer to as “selling the visit,” and it’s going to be what you do to try and build in an additional visit, capture customer data, promote your club or make additional profits during that visit or the next. The Groupon deal must also be viewed as an advertising expense — followed up by a customer retention expense of some kind. A customer retention expense is thankfully the smallest of the expenses since getting the customer onto the property for the first time is where a majority of your “advertising dollars” will go.
However, the reason why Groupon’s worth considering is that you only haveto pay for the successful sales. When you buy a radio spot or a television ad, you are being charged for the “opportunity” to bring in new customers, and it has little to do with the actual success of the promotion.
Myth #5: If I spend money on a gift card program I will then make a bunch of money.
FACT: Operators who believe that spending the money on a gift card program is what will turn their failing business around may be disappointed by the results. There is a big difference between having the tools and using the tools. It’s no different than the men and women who buy expensive workout videos and exercise equipment expecting to get into shape. Just because you have the right tools to turn things around (in business or in your personal fitness) doesn’t guarantee success.
Let’s be very clear: Gift cards and carwash-specific customer loyalty programs are great tools for a carwash operator who’s willing to do the exercises. If you have a gift card program already, make sure to read the manuals or watch the videos, and hit up the manufacturer for some consulting, or find other operators with the same tools as you and find out how they are successfully leveraging their marketing strategies.
As for operators thinking about adding a gift card or customer loyalty program, to their carwash, be sure to do your homework. The more carwash specific the software is, the more options and flexibility you will have. Shopping for a customer loyalty program is is similar to shopping for a new car — picture yourself living with that purchase four to five years from now. Unless you know for certain that you’re only looking for absolute basics, be careful you’re not making a decision solely based on price (remember you get what you pay for).
Also, consider whether you plan on expanding anytime in the future, or if you’ll want to run identical entry stations and point of sale systems, or if you’ll integrate other services at your carwash business that you might want to tie into your gift card program in the future. All of this can be addressed by doing your homework. Check manufacturers’ websites, read reviews, and most importantly, demand referrals of other operators.
Myth #6: Giving away washes is basically giving away potential business that I could have had otherwise!
FACT: Giving away a carwash is far more economical than spending advertising dollars on traditional things like yellow pages and radio ads. Clever signage, a website and some social media coverage of your promotion are cost effective platforms to spread promotional messages. Product giveaways allow you to stretch your dollars much father — so when you’re using carwash services as a prize or incentive, don’t think of it as a $10 carwash, think of it as $10 spent on your advertising budget that only cost you $1.25! Lamenting “potential business” based on a free carwash will only lead you down the wrong path.
Myth #7: If I start an unlimited wash club people are going to totally abuse the system and I’m out a bunch of money.
FACT: Operators that price their monthly plans too high will never get the volume of customers needed to drive the average wash-per-month ratio down to the 2.5 average that successful operators are seeing. The only volume you will see is from the early adopters that are “getting their money’s worth.” The flip-side is also true if operators price their monthly club too low. Finding the right balance is key here.
Be sure to create an incentive plan for your subscribers to add additional vehicles from the same household or business on the same monthly plan to drive down the averages. Statistically, the second, third and subsequent vehicles from the same household will wash considerably less than the primary vehicle.
To price accordingly, take your top wash, subtract your average coupon value, and then multiply that result by three. This will give you a number in which you can go plus/minus a few dollars to find the right price. Example: $10 top wash, minus a $2 coupon = $8 x 3 = $24. This can easily become $24.99 or $29.99 if your club comes with additional benefits other than the exterior wash).
Myth #8: Credit card companies are going to take all of my money, so I’m going to stick with cash.
FACT: Fighting fears with well-known facts is about the only way to address this huge myth.
If you are worried that switching to credit card services at self-serves or in-bay automatics will result in lesser profits because of a credit card fee, well, you’re right. You will have plenty of existing customers switch to using a credit card (which will cost you about 5-7 percent). But, ask any operator that switched to accepting credit cards and they will say they have seen an increase in spending across the board. Self-serves see close to 80 percent more time purchased and entry stations see about a 20 percent increase in wash package upgrades. The fees are negligible and payment by plastic is the preferred form of payment by a majority of consumers.
Also, I know you’re all honest business owners, but I need to note that the illegal cash-only business “benefits” for a carwash owner are on thin ice: The IRS can now calculate income based on the water utilities. Computers with fancy algorithms now put sly business owners under the microscope in the case of an audit.
Myth #9: My nephew is making my website and it’s going to be as good as the websites that professionals make.
FACT: No offense to your nephew, neighbor, cousin, child or local “computer wizard,” but if you are not having a website created by a professional company, you’re missing out on one of the most important aspects of the website, which is visibility. Website design is so much more than an online brochure, it is the number-two resource for letting people know how to find you (your sign is number-one). SEO (Search Engine Optimization) is what allows popular search engines like Google to find your company, so make sure you know about it.
Far too many operators put up terrible websites that are filled with flash animations and “animated-GIFs” (special animated graphics), junk codes, cluttered information and they are difficult for the search engines to find. This is the equivalent of getting some sheets of poster board and writing “CARWASH” in magic marker and staking it out in front of your building as your only sign. It’s not doing you or your business any good.
Ryan Carslon wrote the article entitled: Debunking the marketing myths. Carlson grew up in the carwashing industry as part of a family-owned carwash business in central Minnesota. He has written many articles for various trade journals and websites, and has been cited in multiple media outlets as an authority on consumer buying trends and carwash promotional marketing technologies. He is also the host of the Wash Ideas Weekly podcasts, which can be found at www.washideas.com. Carlson can be reached at [email protected].