By: Anthony Analetto
Originally Published in AutoLaundry Magazine
In just a few weeks, thousands of car wash operators will converge in
Speaking with colleagues, I’ve found that most of them seem
to think that finding ways to hunker down and reduce variable expenses like
labor will be the only thing on people’s minds this year, in Las Vegas . Coming in a close second, many
operators are certain that overcoming financing woes is going to steal the
show. Personally, I’m looking for ways to solve my biggest challenge – how to
raise my dollar per car average from my existing customers. Specifically, I’m
looking for ideas in two areas. First, I want to find the best practices in
menu layout, package design, and price differentials to raise ticket averages.
Second, I hope to discuss customer loyalty program ideas with managers that
have had success using them to keep their patrons coming back. I may be wrong,
but seeing as the show is in Las Vegas
again, I’m putting my money on those two topics to dominate informal
discussion. Let’s take a look.
Delivering Value – Wash
Always a critical number, with the growing percentage of
operators having already reduced labor at the wash via automation or format
change, the one number on everyone’s mind is the average dollar per car.
There’s plenty of debate already going on about the viability of low price
points in our industry. For my purposes, I’ll steer clear of the actual dollar
amounts and focus on an art form that needs more open discussion. In a
nutshell, we’ll be evaluating the optimal price differentials between wash
packages, and which services delivered enough value to current customers for
them to jump to the next higher package. Basically, how can you elevate your
dollar per car average?
My next question, recognizing that car washing is not a
commodity, is to discuss the most effective ways to use signage and wording to
show customers that the incremental value exceeds the additional price paid.
It’s a sensitive subject. Mastering it often becomes a competitive advantage of
a business in their market. Now ask yourself, if you consistently produced a
higher dollar average per car than a similar wash down the street, would you
want to talk about it with your competitor? That’s the beauty of the ICA show. Once a year you
have an opportunity to get together with other operators from all over the
country. Also, there’s a firm rule in every business that you must deliver a
consistent product and customer experience to be successful. Randomly changing
your wash menu to try different pricing and service models will merely alienate
your existing customers. With trial and error not being a viable option, my
recommendation is, sharpen your pencils and head out to the trade show with the
questions you have. Here’s a list of the things I’m bringing to this year’s
expo.
Good-better-great-great-ultimate:
I see this pricing model more often these days. At an
express-exterior it often plays out with a $5-$7-$9-$9-$12 structure. The
actual prices would obviously vary by market. I’ve also seen it with only four
packages, but the concept remains straight forward. You have a value priced
offering to attract customers. You have two packages at an equal price in the
middle that offer a distinct extra service such as tire dressing or triple foam
conditioner. Finally, you have a top package that offers the combination of
those services plus two extra services such as an underbody wash and a total
body protectant. With the pricing scenario above, each of the middle packages,
extra services have a $2 value. Buy them together and you have a combined
incremental value of $4, or $11 for the wash. The ultimate package in this case
provides an underbody wash bringing the perceived value to $12. That last extra
service in the top package, total body protectant in this example, is promoted
as a free bonus. My questions are; Where to best put each extra service” and “Which
one of those that are offered on the ultimate package as a free bonus
demonstrates the greatest value to push customers to the top”? Is it total body protectant, tire shine, triple foam, or something else?
Less is more:
It’s not uncommon for a car wash to have up to 6 progressive
wash packages with a la carte services to boot, but the trend toward simplified
menus means making some careful choices about what you offer. I’m hoping to
gain some insight from operators who have been able to use them to their
advantage. There are operators who’ve been extremely successful over the years by
offering only a single exterior wash option. On the in-bay automatic side of
the business, it’s very common to see a three package, good-better-best,
scenario. But what’s new is that these limited menus seem to be gaining
popularity at express-exterior and flex-serve sites. One interesting menu that
I’ve recently seen at an in-bay automatic promotes $5-$7-$8 services. Another
runs with $5-$7-$9. I’m curious about whether anyone has tried these, or
similar pricing models at a conveyorized wash. Which one has the highest dollar
per car average? Are customers more likely to buy the $8 service with a $1
price disparity resulting in a higher average than a $2 disparity to the $9 top
package? Inquiring minds want to know.
If it’s for free, it’s for me:
Free Vacuums! Buy four get one more! Free with a fill-up!
Free incentives are certainly not foreign to the car wash industry. But with
more operators taking advantage of the growing effectiveness of direct coupon
offers to an increasingly frugal customer to drive traffic, what are the best
offers to promote? Are washes seeing better results offering a coupon for a
free service such as total body protectant, or a discounted wash package?
How effective is it to offer free services or guarantees on the top wash
package to make the buying decision easier? Is anyone giving a free 48 hour
guarantee only on the top wash to take away the concern of making the extra
investment? If you give a free wash after 10, how about making the top wash
count double – meaning the customer gets a free wash after 5? Coming up with
ideas is easy. Executing, testing, and evaluating them is a challenge. At this
year’s ICA
show, I hope to come back with some tested ideas to leverage the power of the
word ‘free’ in raising my dollar per car average.
The perfect VIP:
Loyalty programs and their endless combinations of
incentives are another hot topic I expect to discuss. The trick is offering the
right combination of perks to keep customers engaged and coming back as well as
providing you with incremental profits. Wash
discounts, gift card discounts, and extended clean car guarantees are the norm.
How can you really stand out from the competition? New technology has given us
the ability to manage monthly subscriptions using radio frequency
identification (RFID) tags and point-based loyalty programs tied into direct
email and text messaging with clients, but do these products deliver results?
This is exciting ground and one of the areas I expect many operators exploring
this year in Las Vegas .
Summary
Times are tight but the opportunities are huge. If you don’t
make it out to the ICA Trade Show this year, make sure you plan to attend one
of the regional shows and make sure to contact your network of colleagues after
the show to see what you missed. For those of you who don’t make it to Las Vegas but are dying
to try various pricing models at your wash, I’ve been playing with a new idea
that appears to be working. At a nearby location that offers a Whacky Wednesday
promotion, they’ve experimented with offering a completely different menu with
daily specials on that day, using varying combinations of extra services and
price disparities to test ideas. It gives them an opportunity to evaluate
signage and wash packages designed to increase their average dollar per car
without disrupting their regular business. In these difficult times, having the
ability to incorporate lessons learned to raise your average ticket without
disrupting your business is absolutely priceless.
