In 2016, life operating a car wash has gotten harder. The car wash business has become one of the most fragmented and competitive in the world — the 50 largest brands own less than 20 percent of the market, and each customer purchase represents a direct steal from a nearby competitor. Weather has become only more unpredictable, and even when it’s nice, local forecasters continue to trumpet their “wet bias.” Often, it seems the location of a car wash is the only hope for attracting customers, and location of course is the one thing we cannot change.
Customers, too, have evolved, as their expectations have only gotten higher. Any experience mishap can result in an angry, anonymous online review filled with vitriol but empty of any context. The task of ensuring employees consistently establish the required level service across locations has become crucially important, but, again, difficult to control.
These developments beg an obvious question — how does a car wash operator increase sales and revenue in 2016? What are the marketing strategies that will actually work?
That’s why we are here. Let’s unpack three lucrative opportunities for increasing sales in 2016. In no particular order:
In any highly competitive industry, the best source of additional revenue happens to be your most loyal customers. Marketing is more cost effective, as a pre-existing experience with your brand increases the likelihood that customers conversions will convert.
To build customer loyalty, invest in an effective, effortless loyalty program. Tactically speaking, that means the following:
Use rewards to upsell high-profit items and services — instead of providing previously purchased services for free.
Oftentimes, car washes choose to incentivize loyal customers with free or discounted washes. Makes sense of course — centuries of research have proven that customers close to rewards visit more often. That said, these type of incentives essentially give customers something they’ve already experienced, which ultimately will not change behavior. Instead, car wash operators can use rewards to provide customers with additional upsell services, such as wheel details or vacuum steam cleaning. Now, customers not only get the monetary benefit of receiving something for their loyalty, but they also receive a new experience. Should the upsell service blow customers’ minds (that’s the job of an upsell service, after all), many customers will begin to purchase these higher-value services at each subsequent visit — without receiving a reward. And that, of course, means incremental revenue.
Personalize your loyalty program for different types of customers, according to how valuable they are for your business.
Every business has to face the same fact: Customers are not made equal and, as a result, they should not be treated as equals. Car wash fleet customers, for example, can be huge profit centers when they feel truly special, having been given a benefit not available to anyone else. To make them feel special, create a unique loyalty program experience for your most valuable customers, separate from the loyalty program available to everyone else. Equivalent to the airline’s first class experience, big fish customers who receive special treatment will refer more of their friends.
Start tying incentives and rewards to metrics actually meaningful for your business, such as changes in frequency or overall average spend.
All car wash operators need to stop providing discounts blindly. Instead, find ways to tie marketing dollars to return on investment (ROI). For example, if you don’t know how a reward affects a customer’s recency, frequency and lifetime value, you’re still in the dark. Instead, use mobile marketing to ensure that you know how a coupon changes customer behavior. That way you can stop eating margin by rewarding customers who would have come anyway, and eliminate the cost wastefulness that comes from giving away discounts to folks who will never return.
Other than agriculture, there’s no industry more dependent on various cyclical factors such as the weather, day of the week, and time of year than car washes. The typical car wash operator spends Monday, Tuesday and Wednesday crossing their fingers for the following four days — nearly every single week. Moreover, with 32 percent of traffic coming in the winter and just 18 percent in the fall, car wash operators need ways to smooth financials out across seasons (in addition to week-to-week).
Here’s where “timeshift” marketing becomes so powerful. Say there’s a group of loyal customers who come in only on Fridays, but Friday turns out to be the car wash’s busiest day — with Monday the slowest. Send these Friday customers an incentive to visit on Monday.
Doing so not only gets more new customers in on Friday, with wait time becoming less of a disincentive, but also draws more attention to the car wash on Monday. Plus, your best customers will get a better experience with less waiting in line. Because car washes can only support so many cars at one time, smoothing out traffic week-to-week or season-to-season leads to immediate incremental sales.
Keeping customers happy is critical, particularly so for car washes given the emotional nature of car wash customers. Four of the top five reasons that a person chooses to go to a professional car wash are emotional — makes them feel good, reflects well on them, makes them proud, etc. So, providing customers an experience that leaves them happy and feeling rewarded for their decision will lead to incremental sales.
How do you keep your customers happy? Easy, ask them! Even better, just ask them if you made them happy and, if not, what you could have done better. Using mobile devices, there are now easy ways to create a closed feedback loop with your customers that allows them to have a genuine two-way interaction with your brand.
By the way, one pain point shared by many car wash operators is how to keep employee performance and customer satisfaction high, while also keeping costs low. Closed feedback loops are a proven solution to this age-old conundrum. Feedback tied to a location helps grow employee performance, as you can pinpoint managers and employees who have uncovered how to optimize customer experience.