Business owners are routinely told that the key to better customer relations is in building personal relationships with your customers, rewarding them for their loyalty, responding to customer feedback, reaching out to customers who have churned out of the business, and marketing to your customer’s demographics and interests. But how do you get there?
According to Zach Goldstein, CEO of Thanx, these types of tactics have been harder to adopt in the car wash industry due to one major hurdle: acquisition of customer data.
“There was no good way for us to do that in the car wash industry,” said Jimmy Starnes, chief strategic officer of Wash Me Fast.
According to Starnes, the setup of many washes allows for little-to-no contact with the customer and limited opportunities to collect data beyond sales numbers and perhaps a zip code associated with a customer credit card. “We had a gap in our POS [point of sale] system… it did not give us the ability to do what we wanted to do with our customers in terms of feedback, hearing their voice and letting us communicate back to them,” he said.
Initially, Wash Me Fast utilized a business card punch loyalty system but found it lacking. “We didn’t know who you were, where you’re from, whether you have a hole punch at home that you’re punching yourself… it was totally non-relational,” Starnes said.
Not being able to identify and communicate with your most valuable customers is problematic. “Generally 20 percent of people are driving 65 percent to 70 percent of revenue,” Goldstein said. “Those are the people who it is very important that a car wash build a deep relationship with, and if they don’t know who they are, it is difficult to do.”
Collecting Data
“Try to make data collection a habit and part of your daily routine. Automate it as much as possible,” said Dr. Brian Kloppenborg, CEO of Pratum Labs, a research and development firm that specializes in data science. Start with the basics of personal and transactional data: customer names, mailing and email addresses. Recording and analyzing what, when and how often customers purchase from you are also key.
Generally speaking, modern point-of-sale systems offer customers the opportunity to send their receipt via email or text and store the information for future communications. But, often attempting to utilize that data in any meaningful way can be a herculean effort.
So, to take it one step further, some POS system providers are linking that back to customer data in ways that make the data more usable for the car wash operator. Or, if you take the Thanx approach, it’s an app that captures transaction data from customers without changing a business’ POS or integrating with their existing POS, both potentially costly and timely endeavors.
“Just capturing data doesn’t drive changes in your business. You have to be able to use it effectively,” Goldstein said. The customer data you obtain should be stored in a useful and accessible manner. Basic Excel spreadsheets can be cumbersome and make it difficult to search for meaningful patterns in customer data. All-in-one customer relationship management (CRM) solutions, such as Teradata, Pipeliner or Zoho, help to track and make sense of customer data in a time- and cost-effective manner.
Actionable Results
Connecting with Email
and Social Media
Associating an email address or cell phone number with a customer purchase is a powerful step toward collecting meaningful customer data. Once you have a customer email, you can send out surveys to collect personal information on service preferences, personal interests and more. More importantly, emails can be used to connect with your customers via social media channels such as Facebook. Facebook Analytics is a free offering that provides aggregated demographic information on your customers such as age, gender, language, job titles, highest level of education and page likes.
Identifying Your Lost Customers
With customer data, there is an opportunity for car wash owners to work with formally loyal customers and win them back. “Data suggests that it is about 10 times more cost-effective to get an incremental visit out of an existing customer who’s familiar with your brand than it is to try to go and acquire a brand-new customer who’s never been to you before,” Goldstein said. Once you have collected customer data and contact information for an extended period of time, it becomes easy to identify and reach out to customers to entice them back. Some tools even offer services that automatically search for and reach out to customers who have changed their buying patterns.
Adjusting for Lumpiness
Many washes are at capacity on a Saturday afternoon but are slow mid-week. A common strategy is to send out mailers with discounts rewarding customers for coming during slow periods. Without utilizing and leveraging customer data, this strategy can harm your bottom line. “You create a culture of discount-seekers… that’s unfortunate for the business,” Goldstein said. “Knowing who your top customers are, and being able to send targeted messages to those people, breaks the habit of mass discounts.”
Instead of offering a discount en masse, top customers can be targeted (and rewarded) with coupons to come on Wednesday instead of Saturday, freeing room for new customers who pay full price during peak times. “Over time you can drastically improve your business by targeting discounts and incentives only at your best customers and not your deal-seeking customers,” Goldstein said.
Customer Feedback
Most customer feedback tools are anonymous and public, such as Yelp or Google Reviews. When customer purchase data is connected with customer contact data, it becomes possible to know specifically who that customer is, how often they come in your business and to communicate directly with the customer to resolve any service issues.
Thanx asks for customers to rate their experience immediately after a transaction is completed and alerts management when an unsatisfactory experience is reported. Managers are able to address the issue with the customer before they leave the lot, or failing that, through direct messages and rewards in the app. “I love that we have the chance to make things right before it escalates out of control,” said Starnes, who uses Thanx to manage customer data at Wash Me Fast. “You’re not abandoning your customers. You’re saying, ‘We’re listening, this is important to us, thank you, let us make it right.’”
The power of one-on-one communication is clear. “Just the process of asking customers for feedback directly results in a 7 percent increase in visit frequency for those customers. When you reply and the customer feels heard and knows that you care, it results in a 14 percent increase in frequency. When they have a negative experience and you grant them an incentive or reward, it has a 21 percent increase in likelihood to come back,” Goldstein said.
Getting Creative
Once a history of sales and customer data has been collected, it becomes possible to look at the data in innovative ways to help increase sales. This is why you see an increase in the number of data scientists and analyst roles. These roles are built to take data you’ve collected and overlay or combine other data sources with it in order to find key insights for your business. It may be worth the investment as you collect more and more data, so you can make the most out of your efforts.
Kloppenborg suggests that weather, pollen and atmospheric particulate data can be compared with sales history to identify customer purchasing trends. “If, for example, you were in a dusty climate, with a high-level analysis you can pull in other data and determine a correlation between sales and wind direction and speed,” Kloppenborg said. Advertising and staffing plans can be adjusted to optimize cost effectiveness and efficiency based on these conclusions.
The potential for gains in sales by determining causation is vast. Kloppenborg even theorizes there is a possibility of charting atmospheric conditions that impact the polarity of the sun, causing cars to appear dirtier in certain lights, the best forecast for pushing out a marketing message.
Ultimately, big data can pay big dividends when collected and used with actionable results in mind. As a business grows and it becomes more difficult to interact with customers one-on-one, technology helps fill in the gaps and build meaningful relationships with customers.