Recently, my wife came home from the grocery store quite angry she couldn’t get her loyalty points or gas discount because the chain’s reward program crashed.
I asked if she had talked with the manager, and she said he was too busy dealing with a mob of disgruntled customers over the issue.
So, we know rewards work. We also know instant gratification is important. My wife went on and on about switching grocers because she spent over $200 and couldn’t redeem the 50-cent-a-gallon gas discount.
According to the experts, 75 percent of consumers prefer companies that offer rewards. Given the popularity of monthly wash plans, we could argue this holds true for the car wash industry. It is common for a monthly plan to account for more than half of a wash’s revenue.
With the technology that is available today, any type of car wash can offer a monthly wash plan. The purpose of a monthly plan is to produce a steady stream of income for the operator and provide customers with unlimited access to the service at a lower price.
The natural lifecycle for any product or service is maturity, and then performance tends to flatten or decline. People opt out
of wash plans for a variety of reasons. Customers may become desensitized to the value, habits may change, or another similar wash may become more proximate. Operators must continue to grow and maintain a robust customer base to battle churn and keep revenue consistent.
With monthly plans, many operators depend on companies with software platforms to manage their membership marketing campaigns. Here, the provider must generate awareness, recruit and engage members, and deal with folks who allowed their membership to lapse.
The planning phase of a program should begin by establishing objectives such as the membership price and revenue goals. A budget will also be needed to determine how much the business can spend to develop a program.
For example, implementing a monthly wash plan requires a sophisticated point-of-sale system, vehicle recognition capabilities, a customer app, and an analytics and reporting system.
Next is to analyze the target market, beginning with the existing customer base. For example, pundits say the target age for car wash customers is between 35 and 55.
Operators then need to choose an incentive software program. Such programs are available through car wash equipment manufacturers and third-party software firms.
The final step is developing a training program or outsourcing the program to a third party. There is no need for an independent operator with one or two sites to take the DIY approach.
If a steady stream of recurring revenue seems attractive, there is no shortage of experienced companies to help achieve this objective.
For less than $100 a month plus $.05 per transaction, a self-service operator can offer the same type of loyalty program as a full-sized express exterior.
Doing so can extend the product lifecycle and help prevent the service from becoming obsolete.
Bob Roman is a car wash consultant and can be reached at firstname.lastname@example.org.