Summer is coming. Trade-shows are re-opening. The smell of normalcy is in the air.
I’m looking forward to passionate in-person “at show” conversations, hashing out the finer details about how to best maximize profits by gifting our communities the joy of a clean, dry, shiny car.
And to get the ball rolling I’m going to fire some shots across the bow!
Pricing. Let’s start small. Should you end with .00? Or is it better to go with .99? Or .95? I can see it now. After day one of a great tradeshow, a group of us are at a bar enjoying our beverage of choice. Someone will say “I’m washing over 150K cars per year and that 4 cents comes to $6,000 per year. That pays for me to come to this show!”
The discussion continues. Are round numbers better to simplify cash payments? What about a credit-card-only lane? Is it better to have four wash packages or three? Who’s running with five? Should I hide the basic wash at the bottom of the menu? LPR or RFID? E-commerce? Digital menu, printed menu, or both? $3 car wash anyone?
But I’m not going to write about wash packages or menus. I’m going to write about one incredibly vital aspect of it: the unlimited plan multiplier.
Most new washes are express exteriors with free vacs and pay stations. The vast majority offer an unlimited plan that can be bought and managed online.
And that’s where the similarities end.
For simplicity, the following is the “sample” base menu I’ll use in this article. Focus on the multiplier options, not the packages or pricing. This isn’t even my current menu:
$5.00 – Basic Wash
$10.00 – Tire Shine
$15.00 – Wax
$20.00 – Ceramic
Multiplier Not Pricing
Typically, I suggest focusing on a multiplier to help build your pricing, meaning your customer can subscribe to get unlimited washes for anywhere from 1.1 times to 4 times the cost of a single wash. How unlimited is unlimited — really? Most “unlimited plans” have limits — once per day or week, family plans, etc. So, for this example, the unlimited plan I’m referencing is once per day restricted to a single car, 30 days per month.
Basic Wash Included or Not?
In the beginning, most washes offered an unlimited option on every package. Many still do, including some heavy hitters in our industry. I won’t argue with their success. The 3x multiplier is most common with a basic wash, meaning a $5 base wash is $15 per month. It absolutely drives total subscriptions. I mean, it’s not a hard sell.
Seems logical, but is it profitable for everyone? Our typical “best” customer washes twice, maybe three times a month at most. So, if we can turn an infrequent $5 wash into unlimited monthly cash flow, who wouldn’t do it? I mean who has time to wash more than that?
Answer: Uber drivers. And another answer: Anyone who washes their car every weekend.
Know Your Worst Case
Every market’s variable costs are different. Numbers presented below are for simplicity. You will want to plug in your actual total cost per car. Then multiply it by 3 to represent a typical average, and multiply it by 30 to represent an every-day customer as your worst-case scenario, as shown in Table 1 below.
The most meticulous Uber driver may not wash every day. And if you offset the rare every-day washer with members who only wash once or twice a month, it rarely registers as a problem for most. But that low monthly price point can be a double-edged sword.
It may grow membership, and it may also attract abusers.
Lately I hear more operators implementing a “commercial” surcharge. Basically, an option that charges extra for company cars such as ride-share drivers who wash more than x times a month. Not a bad option to have.
Since I’m not a fan of unnecessary confrontation with a customer, I prefer to not offer a basic wash membership option. I mean, why have a monthly subscription option that’s less than your top package?
The Easy Step-Up
Smaller increments between plans push people to justify buying up. More members average out heavy and light users. Occasional customers become predictable revenue. There are a million variations. Table 2 above illustrates how this strategy might play out with our sample menu:
Imagine “Customer A” washes four times each year and picks the $20Ceramic Wash. In this example, each wash costs you $4.80 and “Customer A” was worth $60.80 profit per year. They join your unlimited plan and wash the typical three times each month. At $30 per month “Customer A” is now worth $187.20 profit per year. And if you’re at $40 per month, “Customer A” is worth a whopping $307.20.
Simple Pricing = Loyalty
Pay for a second wash today, wash unlimited all month! A no-brainer impulse buy. For washes using LPR, the customer simply clicks yes, the gate opens, and they’re billed automatically.
I see this most often with regional multi-site operators. The discount isn’t as steep, but the value to a customer in having a membership across multiple locations has helped operators succeed with this structure (see Table 3).
Boost Tickets and Revenue A-La-Carte
In the example above I noted unlimited membership for the $15 package as not always offered. The premise is to offer an entry-priced unlimited option that may or may not include wheels. And offer a second unlimited option on your Ceramic or other top wash package. Each visit, the entry-level subscriber can add any or all of the services in between as a-la-carte.
When a-la-carte pricing is used with the right guidelines, it can help to create a more efficient way of generating revenue. What you don’t want to do is overcomplicate pricing. Make it easy for them to justify the a-la-carte option and pricing. Offer a service the customer values.
A car wash should always be positioned “to make hay when the sun shines.” Afterall, 80 percent to 90 percent of your customers will be outside of your membership. Price to strategically achieve objectives from both types of customers — members and non-members.
Build subscribers and cash flow fast while getting good word of mouth to drive traffic. I recently saw one operator go to market with paid social media posts offering “$1 for a month of unlimited car washes — online only.” I’ve also seen that same promotion done with neighborhood door hangers. If you go that route, be ready to put in some work to retain these customers in month two when their membership price goes up to standard pricing.
Less aggressive options include offering the plans for half-price for the first month. Another common tactic is to give the top package for the price of the base package for the first month. Provided your top package delivers a top-notch customer experience, the expectation is that many will opt to continue the premium subscription going forward.
I can hear it now … “Why didn’t you write about…” “You should have mentioned…” “I tried doing what you wrote about and it didn’t work.” “I tried what you wrote about and I’m making more money than I ever thought possible!”
Music to my ears. We’re all entrepreneurs. Every opportunity is unique, every market is unique, every wash is unique. I barely scratched the surface of unlimited plan pricing. What I do know for certain is that some conversations are better face to face. I’ll see you at a tradeshow soon.
Good luck and good washing
Joining the company in 2000, Anthony Analetto serves as the president of Sonny’s CarWash Equipment Division. In this role, Anthony leads the innovation of new products to drive client success and oversees all operations, engineering, and supply chain management. Washing cars for over 30 years, Anthony was the director of operations for a 74-location national car wash chain prior to joining the company.