By Matt D’Souza
2020 was an emotional roller coaster (I picture the Hulk ride at Universal) which taught us many things that new and current car wash owners must keep in mind to thrive in a marketplace that is only getting more competitive.
Demand for unlimited programs will continue to grow. so make sure the club is the cornerstone of your wash business
Club membership growth resumed a steady march up right after shut down with few exceptions. Initial expectations of consumer behavior predicted consumers would reduce discretionary spending and club memberships would fall by as much as 25% percent. This did not happen. While the waves of pandemic hit at different times, each car wash region resumed growth of their club memberships after any shut down period.
Even with the newest shut downs, car washes in California (at the time of this writing) were spared. So while recent data may indicate less wash volume, that is not a consumer choosing not to wash, this is the consumer being forced to stay home.
Block all other noise out and focus on member growth and retention by monitoring and adjusting your processes. The growth is raising all boats but you must get yourself an outsized share of customers to be able to cope with the inevitable down slide as well as build up a war chest for additional sites.
I see many car wash owners focused on optimizing complex menus for non-member customers. Unless that complexity is pushing them towards the club program, you might be over-engineering the services for the segment of customers you want to be your smallest. Some wash owners have identified 70% club members and 30% non-club members as the right mix of customers given attrition rates and preferences. I don’t think there’s an exact answer there but I’d say definitely over 50%.
Going all in a club program creates focus. And It’s the ultimate loyalty program. If someone becomes a member of your program, chances are, they will never visit your competition again. You have liability insurance in case of an accident, but an unlimited program is the only insurance protecting you from your competitors.
Reduce human interaction regardless of a pandemic
Customers want a clean car fast and will take that over small talk or close encounters with staff. Chit-chat is nice but, I think it would be a challenge to find anyone that goes to a fast food drive thru for the interaction. They are there for a consistent product period. The same motivation applies for customers coming to your car wash.
Recently we’ve seen car washes invest in better dryers to eliminate towel driving. Scrub-a dub, a car wash chain in Boston, offers touchless drying with their extreme wash package. We’ve also seen investments in better wraps to eliminate prepping.
Relentlessly automate the mundane and moderate complex tasks
Margin compression will be coming to the car wash industry. Three washes built within a one-mile radius will have that impact. Understanding the more you can leverage technology to make management and delivery of services and communication will be essential.
You can sell me on the idea of semi-attended kiosks when you are growing your wash and for the near future but, what about when competition is pressing in? Your kiosks need to do their job rather than act as glorified cash registers. Why pay 5 figures for a pay station if you’re going to stand next to it?
In time, some things will become less relevant: masks and hand sanitizer are crucial now but (hopefully) won’t be in the future. An investment in automation and equipment will remain important to your business even in a world without COVID-19. Making the right choices today will help you now and in the long run, giving you a way to compete today while future proofing your business.