Maybe it’s because another year is about to come to an end, a time when many car wash operators start to formulate their plans for the coming year, but the question I’m getting asked with increasing frequency is: “Should I offer a monthly wash club subscription at my wash?” Part of me wants to jump up and say, absolutely! Predictable revenue, increased traffic, what’s not to love? The older more experienced side of me, however, rattles off the same counter question every time: “How much excess capacity do you have?”
A few months back, I wrote a column titled “Fix it until it’s broken.” I listed tinkering with monthly membership prices as something to do carefully. Below I’m going to delve deeper into wash clubs. I truly love these programs and will throw out some pointers I’ve learned along the way to make growing them easier. Before I get to that, I want to address the question of excess capacity. A car wash isn’t Netflix. Your property’s layout and equipment package should have been designed to process the anticipated peak hour for the market you built in once the business matured. Wash clubs can help your business reach that maximum capacity, but unlike an Internet company that simply adds another server to handle more subscribers, a car wash’s ceiling is much less flexible.
When I wrote about being careful when tinkering with wash club pricing, it was quickly pointed out to me, that some washes are intentionally raising monthly subscription prices to reduce the number of members. They’ve reached their peak capacity and are trying to scale back on the number of discounts they are extending. As one operator pointed out: at a car wash, monthly memberships should be designed to shrink as a wash matures. It’s a nice problem to have, and one I failed to acknowledge in my last column. That said, provided you have excess capacity, let’s move on to ways to grow your business using wash clubs.
BENEFITS BEYONDRECURRING REVENUE
I’m a big fan of the saying “activity breeds results.” To me, anything you can do to make your property look busy is going to help attract impulse buyers. Having a stream of monthly wash club members entering and leaving your property all day long will serve as an effective advertisement to draw new customers. That means that your wash club program can deliver recurring revenue, attract full-price impulse buyers, which in turn will offset the expense of other advertising to attract customers. What are you waiting for?
BE PREPARED TO WORK
Here’s the dirty little secret of monthly wash programs; they’re a lot of work. There are a lot of moving parts. Signing people up will require additional staff and training procedures. Some operators try to bypass this by giving applicants a written form to fill out that gets entered in by the manager or owner. This rarely works. Few customers will put the sensitive information you’ll need for recurring billing on a piece of paper. When they do, chances are you will spend more time calling them to clarify than you planned for; and do you really want a bunch of credit card numbers written down on forms in your office in the first place? I’ve also known some operators that use PayPal’s recurring payments feature to manage billing, but once again, you’re still manually keeping track of who’s paid, and which vehicle is registered.
A successful wash club program demands a computer system that lets you swipe the card and setup memberships directly into the POS terminal. In addition, the POS system should never store sensitive information like the credit card number directly, but must instead store an encrypted token that lets you securely bill the customer each month. RFID and gated entry systems have advanced tremendously to control membership to a single vehicle, but there’s a financial investment to make. Basically, no matter how sophisticated your technology is, credit cards still expire and won’t always have funds available when you go to bill them. No matter how you slice it, there will be additional man-hours to manage your wash club. Is it worth it? When you ask an operator who’s gotten past the initial growing pains and has over 1,000 members in the club depositing tens of thousands of dollars each month you’ll hear an emphatic “absolutely!” But getting there takes effort. Here are some of the areas that seem to trip up many operators.
PRICING: MAKE IT A NO BRAINER
Keep it simple. There’s only one reason customers are willing to pre-pay for your service on a monthly basis and that’s to receive a significant discount. It’s ingrained into the consumers psyche; the more you pay up front, the sweeter the deal you’re going to get. That means if you use a 3-times multiplier for your base memberships, for example offering unlimited $5 washes for $15/month, an unlimited $15 top package wash might be offered for $30/month, a 2-times multiplier. When formulating these programs, don’t forget that you’re in business to make a living. If the profit margin on your base package is already too low to offer an unlimited wash option then don’t offer it. Enough said.
PROMOTE IT WITH CONFIDENCE
It often seems that operators are attracted to the concept of predictable recurring revenue deposited to their bank account each month, but don’t seem to fully embrace discounting every wash to their most loyal customers. How do I know? Just look at their sites. These are the washes with a monthly program that may appear on a pamphlet, or possibly on their website, but a customer visiting the wash would be hard-pressed to realize they could sign up. If you offer a monthly wash pass then you must make it your mission to sign up every customer that visits. Windmaster, vacuum posts, automated attendant videos, and signage are just the beginning. Every customer must be asked the question: “Would you like to wash the next time for free?” Ideally, a live attendant would do this, but at minimum a promotion should be printed on the back of every receipt. If you’re not prepared to promote your wash program with confidence, then don’t offer it.
DON’T SET AND FORGET
Keep in touch with your wash club members. You have their e-mail and should be sending them something at least once a month. Don’t sell. Instead, offer relevant content to reaffirm their decision to be a member. If you just ran a fundraiser, tell them about it. If you have a fundraiser coming up, ask them to help spread the word. If you installed a new piece of equipment, tell them how it will benefit them. If you hired a new employee, introduce them to your members. Everyone is so tired of being constantly sold to that simply sharing some friendly relevant content can go a long way in keeping your members loyal, and driving referrals. If you do send a promotion, send coupons to guide member behavior, such as discounts for other family-member cars. Do that, and someday you may be looking at how to shrink your monthly membership because your wash is at capacity, which is always a nice problem to have.
Good luck, and good washing.
Washing cars for over 30 years, Anthony Analetto serves as president of SONNY’S The CarWash Factory, creator of the Original Xtreme-Xpress Mini-Tunnel, and the largest manufacturer of conveyorized car wash equipment, parts, and supplies in the world. He can be reached at Aanaletto@SonnysDirect.com or at (800) 327-8723 ext. 104.