Car Wash Image

State of Car Wash Marketing 2010

2010-12-06T12:24:00.001-05:00

While the recession is still the major feature of the business landscape, many companies, including car washes, see sales stabilizing or even getting better. The skies may not be sunny yet, but many are ready to leave the basement and start cleaning up the mess. That means spending some money on marketing to get those customers with new jobs or new cars or new hope to spend some money at their car wash.

However, even for those unscathed by the storm there is a sense that consumers have changed. The marketing world (always hungry for a new buzzword) has been calling this the “new normal”. It describes a consumer movement towards permanent frugality due to a deep recession followed by a slow recovery. Basically it means things have changed for the foreseeable future, if not for good, and marketing decisions must reflect that.

That sense of change and uncertainty has caused many to spend most of their time and resources on the newer trends in marketing. Some of this is worthy and some of it is hype. So this article is meant to provide a year-end status of some of those trends including “green”, social media, coupons and the Internet. We’ll also look at some trends to watch for 2011.

“GREEN”

“Green” is the clear winner of the “latest trends we love talking about” contest. If we keep score by magazine covers, blogs, trade show seminars and pandering advertisements, then “green’s” score is astronomically high. Of course this is not an issue limited to our industry. The rise of the green movement was everywhere and it became a top priority message from marketers everywhere. However there are signs that consumers are no longer seeing the same intrinsic value in “green” products.

According to a November 8, 2010 article in Advertising Age entitled, “Has Green Stopped Giving”, research is showing a slowdown in green buying. For example, bottled water, which was a favorite target of environmentalists had seen a 52-week decline in sales until last quarter when it was up 4%. Also, water filtration devices, which saw years of growth, showed a decline in the third quarter.

This certainly doesn’t mean that no one cares about green anymore. However, after years of being inundated with “green” messaging, it seems the consumer is starting to become immune. However, in cases where a company has a deep and transparent commitment to sustainability, the consumers are still motivated to buy. Seventh Generation, a truly “green” manufacturer of cleaning products saw double-digit growth in 2010 after a flat 2009.

The auto industry is another place where “green” messaging has thrived. In 2009, hybrid sales were up 3% in a market down 21%, according to HybridCars.com. But in 2010 hybrid sales are down 10% in a market up 10%.

The Take Away: Most consumers are no longer automatically moved by “green” products and services. The companies that continue to succeed are the ones that make their sustainability efforts crystal clear and a major part of their positioning. For a car wash that means you will have to do more than put up a poster about being green. If you really want to position yourself as a green company, than you will need to invest time and money in educating your customers, supporting local sustainability and making your “green” efforts transparent and easily understood.

SOCIAL MEDIA

Another hot topic for conversation (and blogs and seminars and articles…) is social media. Again, this is coming from the broader retail industry where companies everywhere are trying to leverage this new platform. The power of social media cannot be denied however, for about 90% of car washes it is more hype than useful tool. This is because companies that successfully utilize social media have successfully done about a dozen other things first.

For starters, it is essential that a company first be “social” before leveraging social media. For example, social media mavens like Starbucks and Dell had built consumer idea websites to solicit customer feedback long before they were using social media. In other words, they were already engaging their customers in a social way.

Mountain Dew, another great example of social media, had already been uniting their most loyal customers long before using Facebook and Twitter to do the same thing. So when they did start using the tools they had a built-in audience that was already engaged.

The other problem with the way car washes are currently using social media is that the content is almost exclusively promotional. Retailers that are successfully using social media are sharing relevant, engaging, entertaining and useful content. The promotional stuff is always an afterthought. This makes sense because the power of social media comes from its ability to influence a large number of people in a viral way. Coupons simply don’t get people excited and the research shows the people that are redeeming those coupons are already your customers. So unless they are for upgrades like a detail or for a wash package that the customer usually doesn’t buy, than you are giving incentives to customers that didn’t need them.

The Take Away: Unless you are already social or are deeply committed to engaging your audience in a non-promotional way, your focus and money are better spent elsewhere. If you are the rare car wash that is already being social and identifying and communicating with your most loyal customers than congratulations- you are ready for the seductive power of social media.

COUPONS

The bottom-line is that customers are still clipping coupons. In fact, due to the recession, coupon clipping is up 23%, which represents a 30% increase in value. This is the first increase in 17 years according to data from Valassis Communications, which also owns NCH, one of the largest coupon clearinghouses.

Part of this increase is because marketers have been willing to offer bigger discounts to grab attention in the past 12-months. However, the numbers seem to be cooling off as marketers start to dial back the offers by lowering the incentives and increasing the stipulations for redemption.

Online coupons still only represent about 1% of customers, but redemptions are up to 10% showing that it is a fast growing coupon platform. The question of course is are you providing an incentive to a new customer or improving the frequency, or are you simply rewarding a customer that was coming in anyway.

The Take Away: The key is to use coupons for a purpose. Keep in mind also that retailers that use these deep discounts have higher margins and/or much higher average tickets than a car wash. Coupons have their place, but they shouldn’t be the backbone of your marketing.

YOUR WEBSITE

The fact that so many carwashes have old, under-maintained, or no website at all indicates that the Internet is still a lower priority when it comes to marketing. However, a simple statistic indicates that plenty of consumers are looking for your website.

According to Google, an average of about 700,000 people in the U.S. search the term “car wash” every single month. Another 100,000 search for automotive “detailing”. About another 100,000 search related terms like “hand car washing”, “express car washing”, “auto wash”, etc. That means close to a million people are searching for car wash websites every single month and that is just people using Google. I can’t say how many of those people are in your market, but chances are there are plenty.

Another reason to focus on a website is that people that spend time on a local businesses website are much more likely to actually visit that business and spend more per visit. Your website is a spokesperson for your car wash and is one of the best ways to communicate value outside of the customer actually being onsite.

Your website also becomes the catchall for other marketing tools. All your listings online, including social media, maps and review sites will feature a link to your website. Research shows that even direct mail becomes more effective when it is tied into your website (such as when a direct mail piece requires the user to visit the website for validation or redemption).

The Take Away: A good website is vital to good marketing. It should communicate your personality and style and is worthy of some marketing money.

TRENDS TO WATCH

2011 will certainly have its trends and they will most likely be evolutions of the ones we have talked about.

One big one will be online tools that focus on local business marketing. For example, Groupon.com, is a group buying site that offers subscribers deep discounts if enough people buy the offer. Already dozens of copycats are out there and it seems Groupon will have a hard time holding on to it’s market share as big retailers like Walmart are now coming out with their own versions. However, you can still see value in these “group buying” tools and it is a trend that will definitely be evolving. It is currently fairly expensive, but if it gets new customers in the door it might be worth it.

Another interesting development is geographic based tools like Foresquare and others that let users find discounts where they are. Perhaps the biggest and latest development here is Facebook Deals, which was released in November 2010. Facebook users can “check in” with their location and Facebook serves up promotions for local businesses that have placed ads with Facebook. This is pretty similar to Foursquare and others, but leverages Facebook’s enormous subscriber base. This is really a result of the penetration of smart phones and you can expect to see a lot more tools available in the coming years.

DON’T FORGET THE BASICS

Of course, the basics never change and never go out of style. Regardless of the latest marketing tools you still have to do a good job of cleaning the car, you still need good people and you still need to clearly differentiate yourself from the competition. For most car washers, it is far more important to focus on these three areas than it is to worry about using every new tool out there. You have to be a good marketer to grow, but that will be impossible without first addressing the basics.

Marketing Measurement

2010-05-26T10:35:00.004-04:00

For the casual fan, baseball conjures images of lazy summer afternoons, hot dogs and warm beer. However, for any genuine fan, the game of baseball- the activity where athletes throw, hit and field the baseball is inseparable from the statistics that are almost their own hobby. Any real baseball fan has at least a rough idea of the players on their favorite team's batting averages, Runs Batted In, On Base Percentage, pitcher's Earned Run Average, etc. The more intense fan knows even more and even the lesser fan appreciates the bevy of statistics that the broadcaster dispenses throughout the game. In fact, anyone who believes that baseball is "boring" or "too slow", feels that way because they don't appreciate statistics, because what makes all those pauses in the game interesting is the analysis of the statistics and the anticipation they create: "runner on second and third, 3-2 count, 2 outs and the batter is batting only .275 with runners in scoring position". These statistics enable deeper appreciation, better understanding and a clear gauge to determine player and team effectiveness.

This is analogous to marketing in that statistics are the only way to know how you are doing and to appreciate the value of marketing. Just like in baseball, business statistics enable deeper appreciation, better understanding and a clear gauge to determine your marketing and business effectiveness.

To continue the illustration, watch any manager press conference after a baseball game and you can see the value of statistics. Reporters will ask all kinds of questions about the game that just ended and the answers are almost always based on the statistics. If the team lost, and the manager is asked about why, he could simply say that the other team scored more points then they did. Of course, this is true, but it's a dumb answer. It's dumb because everyone already knows the other team scored more points. What they want to know is why the game ended the way it did and what led to that result. Therefore, the manager might talk about, "getting behind hitters" (throwing too many balls) or "leaving too many runners on base" or "not getting hits with two outs". In other words he will talk about the statistics of the game. When the coaching staff sees trends in these statistics they can do more of what's working and less of what's not. The point is that statistics enable improvement because they give clear proof of the results.

Compare that to car washing. When asked about a decrease in sales, the vast majority of owners will talk about the weather or the economy. That's a dumb answer. It's dumb because everyone already knows the economy is bad or the weather stinks. What is important, is figuring out specifically why sales are down. Is it because you're losing customers? Is it because the average days in-between visits is going up? Is it because you're not attracting as many new customers as you used to? And for each of these questions to what extent have they effected you?

Understanding the statistics of car washing is absolutely essential if you want to improve. Our goal is to get more customers to spend more money, and it is impossible to know which efforts are successful if we don't have anything to measure against. Therefore, we will now look at 15 statistics, or metrics that a car wash should measure in order to create better insight and enable improvement. I cannot emphasize enough how valuable the insights these metrics enable are to a car wash.

Before we start:

You might have a great POS system, but in my opinion nothing beats a spreadsheet like Microsoft Excel for this stuff.
Assemble this data once a month.
The data in and of itself is useless. What we care about are the trends over time.

Also keep in mind that there are only three ways to increase sales at a car wash: (1) get more new customers, (2) get current customers to come back more often and (3) get customers to spend more per visit. All of these metrics will lead to one of these areas.

The Basics:
These first four are what most operators are tracking. They're a great start but certainly don't tell the whole story.

Cars- How many vehicles went through your tunnel.
Gross Sales
Dollar per car- It's important to make notes of when you changed prices.
Sales Mix- What % bought basic wash, middle package, top, etc.

Customer Insight:
I really think these next three metrics are where you will see the most value. Unfortunately, there are very few operators that are measuring these metrics. The first three here require customer tracking. Many operators have a POS system capable of customer tracking but have stopped entering license plates because they're not using the information, so why go through the hassle of entering it. However, if you put this data into a spreadsheet it will give you great insight. In the future, I think every car wash will have license plate recognition for customer tracking.

5. New customers- How many new customers do you attract each month? Is that number increasing or declining? Many promotions and advertisements are designed to bring in new customers. However, if you're not keeping track of new customers you will have no idea what is working and what is not or whether this is trending up or down. You may have a promotion out there, but of the customers redeeming it, how many are new and how many are existing customers? At an educational seminar I did at the ICA Care Care World Expo in May I asked the crowd of at least 200, how many knew how many new customers they were adding each month. Only one person knew and I know from experience that that person is one of the best operators in the country with over twenty car washes. My point is that if you want to compete and survive, then you must know these numbers.

6. Frequency- What is the average days in-between visits for your current customers? Is it trending up or down? To illustrate how big an impact this can have let's assume a car wash is washing 60,000 cars a year, that the average transaction is $15 and that the average days in-between visits is 112 (16 weeks). If you can get that to 98 (14 weeks) then you just added another $130,000 in sales without any customer acquisition costs. Even if you just reduce it by 7 days, you make an additional $60,000 in sales. However, unless you know what your current frequency is, it is near impossible to improve without spending a lot of money and simply hoping something works.

7. Churn- What percentage of your customers are you losing in 12-months? Again, improving this metric can have profound effects on your sales and if it is declining you can at least address the reasons for the decline and get in front of the problem. Without knowing this statistic though, by the time you notice the decline, much damage will have been done.

More Insight:
8. Customer Satisfaction- Running you business only on gross sales is like driving a car using only the rear view mirror. It tells you what happened in the past, but that is already behind you. A key indicator for future sales is customer satisfaction. If that number is trending up, sales will eventually follow, if it is trending down, sales will eventually go down. Customer satisfaction (which is also related to loyalty) is typically gauged through a survey. The question marketers have found to have the best correlation is, "On a scale of 1-10, how likely are you to recommend this car wash to a friend?" If they answer 9 or 10, they are considered satisfied or loyal. If the answer 0-6 they are considered dissatisfied or disloyal.

This may seem daunting to many operators, but it can be pretty simple. Print business cards with the question we just mentioned. Then have a friendly employee approach 100 customers every other month. Have a box with a slit for the customer to submit the card. Make sure they realize it's anonymous and don't give away anything for filling it out- both of those things will skew results. Then enter the results into a spreadsheet. We want to keep track of two numbers: how many people circled 9 or 10 and how many circled 0-6. Now you will have a powerful metric to see if your marketing or operational efforts are succeeding.

9. Club Signup- If you aren't able to track every customer, then an opt-in club can give you a great sample to gauge activity. How many are signing up for the club each month? Typically, your club is a group of loyal customers, so monitoring their behavior is indicative of your overall customer base.

10. Unique Web Visitors- Unfortunately, our industry is not known for a prevalence of websites. However, if you do have one and use it as a sales tool, you should know how many unique visitors you have each month. This is another good indicator of future sales.

The Next Level:
In reality, these 10 metrics are fairly basic. Once we get good at measuring these things and gauging our efforts, there is another level of sophistication. Almost all major retailers invest big bucks in the following metrics because they understand how valuable they are.

11. Customer Profitability- The statistic that is most common in our industry is cars washed. While this is obviously an important metric it doesn't tell the whole story. After all, what we care about is profit, not quantity of transactions. For example, let's compare two customers: Bob comes in 10 times per year, buys the basic wash for $8 and redeems his loyalty card for his 10th wash free. Fred comes in half as many times (5) but buys the $15 wash. In this scenario, even though Fred comes in half as many times, he is worth twice as much profit as Bob. However, if you're not measuring profitability you would be happier with Bob because that means your washing more cars. This has huge implications.

12. Weather- Ok, we know the weather stinks, but how bad is it. Is it 10% worse than last year or 40%. Understanding that number will give you a better idea of how much of your decline or increase is attributable to weather. Therefore you should be keeping track of weather. If you don't want to do it manually there are resources on the web.

13. Customer Map- A geographic understanding of exactly where your customers are coming from. This vastly improves direct mail campaigns.

14. Campaign Take Rate- What percentage of the people that see your promotion are acting on it?

15. Long Term Campaign ROI- How much new business did that promotion create over 12-24 months?

You will never hear a baseball manager tell a group of reporters that they lost the game, "because the other team scored more points then we did". They will always point to the statistics of that particular game. Just like in baseball, measuring car wash statistics enable deeper appreciation, better understanding and a clear gauge to determine your marketing and business effectiveness.

Strategy: The Art of Car Wash War

2010-03-14T17:02:00.004-04:00

What if Alexander the Great owned a car wash? Or how about Napoleon or maybe even Genghis Khan? Aside from some unorthodox signage (“Foot Off Brake, Car In Neutral And Hands Off Flaming Arrows”), I bet they would be pretty good operators due to the fact that these men were brilliant strategists.

The word strategy is a Greek military term that means the, “art of the general”. Since the business world has always been fond of military analogies, it’s no wonder strategy has become the word we use for this core business principle. In fact, there is no greater element to sustainable success than good strategy. (We are primarily talking about marketing strategy here, but since marketing is the layer of the business that interacts with the world, it is impossible to separate your business strategy from your marketing strategy.)

WHY IS IT SO IMPORTANT?

Your strategy is so monumentally important because it answers the question, Why should our customers buy from our car wash and not from our competitors? Or even broader than that, Why should they spend their money on a professional car wash and not do it themselves in the driveway or even skip it all together and spend their money on something else? Businesses without clear strategies are rudderless and have no foundation to base tactical decisions on.

Simply put, strategy is how you differentiate yourself from the alternatives. It’s finding differences that consumers value and making those differences crystal clear to everyone. Stop reading this article for a moment and write down your answer to this question (or at least write it down mentally), Why should a consumer in your community go to your car wash instead of the competition? (Go ahead; write it down. We’ll wait.) How easy was that? Did you instantly know what to write? If not, this MUST move to the top of your priority list. However, even if you knew what to write, how concise was your answer? And even if your answer was quick and concise, how well is that message being communicated at every customer touch point?

Think of any retail company that has succeeded and you will see a company that has made their differences clear. Starbucks experienced tremendous growth for over twenty years, in part because their café-style stores and dark roasted coffee were so obviously different from the competition. And when Starbucks seemingly occupied every corner in America, Dunkin Donuts capitalized and experienced their own growth, not because it copied Starbucks, but because it established itself as the anti-Starbucks offering lighter roasted coffee for the “Average Joe”.

Another lesson we learn from big retailers, is that business owners that ignore strategy, and instead focus on tools like coupons or social media, do so at their peril. When Circuit City went bankrupt do you think it was because they didn’t have a good website or because they weren’t using Twitter and Facebook? Of course not- They were using those tools to the same extent Best Buy was. The reason they failed was because they lacked a strategy that made their differences clear. Was it price? Or selection? Or service? It was none of those things. Of course, they would tell you that they were focusing on all of those things, but they weren’t able to do any of them in a way that made them different.

I believe that one of the reasons the express exterior model has worked so well is that it is so obviously different from the sea of full service washes. Instead of $20 for a wash and spending a half-hour, it’s $5 for five minutes. This is a difference that is blatantly obvious. However, guess what will happen when a market becomes saturated with exterior express washes? People will again look for differences and that will open the door to consumers that are looking for more service and are willing to pay for it. I’m not saying we will see a complete reversal, but history has taught us that success comes, not from features alone, but from being different in ways that customers value.

HOW TO BUILD A STRATEGY

Like all elements of a successful business, strategy is not something that happens overnight. It may be simple, but it is not easy. Were going to break strategy creation into four steps: (1) research, (2) segmentation and targeting, (3) positioning, and (4) branding.

1) Research

Before a general can create a strategy, he must be able to answer key questions about his enemy, his own troops, the environment and his recent battle history. Similarly, a car wash owner must assemble some research before he can devise his strategy.

Demographics- Since most of your business will come from a 3-mile radius, it is important that you understand the background and lifestyles of your neighbors. And while there are certainly similarities throughout the U.S., your community is unique and understanding that uniqueness is key. Demographic reports are widely available on the web.
Your Strengths and Weaknesses- You cannot create a sustainable strategy unless you know what your capabilities are.
Competition- Since our goal here is to establish differences, it is essential that you know your competition very well. In fact, you should regularly have your car washed there. In The Art of War, Sun Tzu famously says that, “if you know both yourself and your enemy, you can win a hundred battles without a single loss.”
Sales Trends- In order to create the best strategy, you have to know what your up against. That means having an intimate understanding of your sales trends in revenue per car, gross sales, cars washed, sales mix (quantity sold for each wash package) and net profit. You should have a line chart for each (except sales mix) for the past three years.

2) Segmentation and Targeting

The next step is to look at the demographics and figure out who the different groups are in your community. Keep in mind that segments are groups that you communicate with in different ways. In other words, you wouldn’t have a segment for retired 60-year old men and another for retired 65-year old men because you would communicate with them in the same way. However, you would have different segments for retired men and men in their 20’s, since you can and should communicate with them in different ways.

Once you’ve figured out what groups are present, the next step is to decide whom you want to target. These will be the few segments you choose to go after. You need to consider the size of the segment, your ability to reach them, their potential profitability, the level of competition for that group and the growth potential.

3) Positioning

Once you know who you want to target, you need to think about how you will position your car wash in a way that attracts those target groups. Again the focus is on communicating the differences that these particular groups value. Positioning starts with a clear statement. This should explain, in 2-3 sentences how your car wash is positioned and why customers should come to your car wash and not the competition’s. It also includes a tag line, which should be the ultimate distillation of your value.

Keep in mind too, that the enemy of positioning is generality. Many car washes claim that they focus on the cleanest car possible or service or something similar. But their competitors make the same claim. If you want to build your business on service or cleanliness you have to be specific and make a claim that your competitor can’t or won’t. If you want to use cleanliness, don’t just say, “The cleanest car in town”. Instead say, “The only car wash to offer every customer a clean car guarantee.”

4) Branding

Now that you know how you want to position yourself, you need to figure out how to communicate that position to the community. Branding is about communicating your position so that when people think of you, they think of that position. This includes your logo, style, signage, website, uniforms, wash package structure and pricing, level of service and anything else that communicates on your behalf. You know you have succeeded at branding when you ask 10 different people what they think of when they think of your company and they all say the same thing- and their answer is directly related to your positioning.

For example, if we think of Apple (the computer company, not the fruit) we all think similar things and it all has to do with the way they want to be positioned. We think of simplicity and ease of use, innovation and elegant design. Apple brands itself as those things through heavy use of white space in their design and simple, clean layouts. They don’t just design new gadgets, they design new gadgets that are pretty to look at with a focus on the user interface. The point is that they decided how they wanted to be positioned and then made sure they created a brand that fit that position and they executed that brand at every possible customer touch point.

Now, you might think to yourself that you already have the answers to these questions and know them instinctively. You already know all the research, you know the segmentation and targeting, you know the positioning and you know your brand. However, it cannot be stressed enough that taking a formal look at these areas regularly and then analyzing them with others (managers, fellow operators, friends with business experience, etc.) is vital. Just the process alone often leads to insights that can have a huge impact. I suggest putting all this information together in a binder and then doing the analysis off-site in a formal meeting. You’ll be surprised at the inspiration a clear strategy give you.

You are the General, and you are at war. The most important aspect of winning any war is to create a winning strategy. That means finding a way to differentiate yourself from the competition in a valuable way and communicating that difference clearly. Without a clear strategy, no amount of coupons or even the newest equipment is going to make you successful. So set aside some time to review your strategy. It’s the most important thing you can do.

A Warning About Social Media

2010-02-05T09:22:00.007-05:00

With a home built in 1928, I am a weekend-warrior who has made more trips to Home Depot in the last 3 years than I've made to any other store. In the early days of my homeowner apprenticeship, many of those Saturday trips came after hours of frustration spent trying to accomplish a job with the wrong tool. The rationale is that the task should take no longer than 20-minutes and a trip to get the right tool simply isn't worth it. After all, "I just got a new tool last weekend, and I'm sure I can make it work".

However, after spending 3 hours on that "20-minute" task, the pride is swallowed and the trip is inevitably made. The right tool is purchased and more points are added to the loyalty card. And despite the morning's frustration and inefficiency, or maybe because of it, the fulfillment that comes from using the right tool for the job is sweet. As an arsenal of tools were stockpiled, those trips became fewer and to find the right tool, all I had to do was select it from my neatly organized basement shop. It felt good. More importantly stuff got done faster and better.

I see the same thing happening with the use of social media by many retailers, including car washes. Many operators are awakening to the realization that coupons are not their only marketing tool. So they grab the social media, proud of their possession of a modern tool and put it to work.

The problem is that they assume social media is just another vehicle to offer a coupon or another promotion. They pat themselves on the back as they watch the number of "followers" and "friends" climb, assuming people are joining because they love the business, not just because of the free wash friending or following brings.

This is not how social media should be used. Of course this has been preached by smarter people than me, but allow me to echo their concerns. Social media MUST be built on a strong brand- a personality that stands for more than the service you offer or the products on your shelves. Social media is a tool for businesses that care about more than just profit and have a set of values that set them apart. When that personality is present, and more importantly communicated, the next step is to find people in the community that share those values and relate to that personality. When that happens loyalty is created and perceived value soars.

Social media is a tool to communicate your personality and find people in the community that share your values. It is NOT a tool to announce a promotion. You might be able to get a promotion in there every once in awhile, but it's not the main function of the tool. And, if you do it too often, you lose all authenticity.

Marketing is no longer a static process where businesses announce their promotion or message on the page of a newspaper and wait for the masses to respond. It is about real communication, engagement and reaction. It's about listening and learning. Social media is the perfect tool for that job. If you're ready to use it, great. Just make sure you've worked on the personality first.

How To Build Loyalty And Frequency

2010-01-29T09:30:00.003-05:00

The Great Recession has affected businesses across the globe and car washes have been far from immune. One of the biggest reasons is that, while consumers are still shopping, they are doing so less frequently. The key then, is to attack that specific problem and make sure you are doing everything possible to improve customer frequency.

To illustrate the importance of this let’s do some math. Let’s assume Acme Car Wash is washing about 50,000 cars a year at an average of $10 per car. Let’s also assume that the average customer comes in once every 12 weeks, or 4.33 times per year. If Acme Car Wash can reduce that average time between visits from 12 weeks to 10 weeks (or to 5.2 visits per year), they just added another $100,000 in sales. I think we would all like to find an extra $100,000 in sales. Therefore an effort to increase customer frequency should be on every operators priority list.

LOYALTY VS. FREQUENCY
In this discussion though, we need to recognize the important difference between frequency and loyalty. Often, people will talk about “loyalty” programs and “loyalty” promotion. However, what they are really talking about is frequency programs and frequency promotion. Frequency is the number of times a customer visits over a period of time. Loyalty is a person’s conviction to remain firm in support of someone or something. Another dictionary defines it as, “feelings of allegiance”. While it is important to pursue both frequency and loyalty, it is important to realize that it requires separate tactics to accomplish each.

This was illustrated perfectly in a Seinfeld episode where Elaine loses a sandwich “punch card”. She had gotten 23 punches on her card and the next one would entitle her to a free sub. Frustrated that she lost the card, she laments, “I've eaten 23 bad subs, I just need 1 more!” While that card worked for frequency, it certainly didn’t create any loyalty. This was funny because we’ve all had those kinds of punch cards that accumulated in our wallets. In the vast majority of cases, once we get the reward or if we realize it’s not likely we’re going to get it, we stop going to that store or business.

This is in stark contrast to customers that are loyal to a company. Customers that are loyal will go out of their way and usually pay more simply because of their loyalty. People don’t buy Apple computers because it’s the cheapest computer or because the fifth computer is free. They buy Apple because they are loyal to the brand. People don’t buy Starbucks coffee because it’s the cheapest coffee around or because it’s the closest. They buy Starbucks because they’re loyal to the brand. This is hugely important for car washes because loyal customers visit more often and spend more per visit.

HOW TO CREATE LOYALTY
How though, does a car wash go about creating loyalty? The same way all loyalty is created- by sharing and relating. Think about the people in your life that you would say you’re loyal to. In every case it’s because you share something with that person. Maybe it’s a shared bloodline, or a shared commitment. Maybe it’s a shared childhood, a shared employer, or some other shared experience. And while sharing you got to know that individuals personality and you related to them. Because of that shared experience and the discovery of that person’s personality, loyalty was created. You became firm in your support of that person and you had feelings of allegiance.

So the first step in creating loyal customers is expressing the personality of your car wash. This is essentially what branding is. It’s the effective communication with your market about the unique personality of your business in a way that highlights the valuable differences between you and the competition. The problem for most car washes is that, even if they have a clean site with effective equipment, there is usually little personality shining through- they are just a car wash. Apple isn’t just a computer company. They clearly have a personality- a style, a value set, a way of looking at the world, and it comes across in everything they do. It’s the same with Starbucks. When that personality is shared, there are certain people who relate to that personality and want to enter a loyal relationship. As long as that personality is proven to be authentic over time, that customer will be loyal.

Loyalty is critical in this economy because car washes that successfully build a brand and establish a personality will not experience the same declines in sales and decrease in customer frequency that others will. This is because customers visit that wash, not because it’s the cheapest in town, but because they relate to the brand.

Of course, this is easier said than done. However, it is vital since consumers are changing and demanding strong brands. Gone are the days where you could simply open a business, do a decent job and rely on the continued patronage of your market. Building a brand that attracts loyal customers basically follows these steps:

Figure out who your target customer is or who you want it to be. Understanding your customers and the people in your community is vital.
Determine what your values are. This is the foundation of your car washes personality. Do you support the community through fundraisers, special events? Do you believe in the environmental advantages of professional car washing? Do you love cars? Do you value speed of service in an increasingly busy society?
Communicate through your marketing the personality of your car wash. Don’t be afraid to show it. It should weave its way into every aspect of your business.
Create a style based on that personality. This includes logo, standard fonts, sign template, design aesthetics, etc.
Tell the world about your personality through promotional vehicles.
And don’t forget to be authentic. Nothing destroys loyalty like a company that claims to be one thing and then acts in a different way.

HOW TO IMPROVE FREQUENCY
While creating a strong brand, with a clear personality will definitely improve frequency, it’s not the only way. Even without a strong brand there are ways to get your customers to visit more often.

One of the most important tools to improve frequency is a Membership Club (These are also called Loyalty Clubs, but for reasons already explained I call them Membership Clubs). The premise of a membership club is that you’ve done something to “belong” and this is a powerful motivational tool, even if there is no actual cost to join. It is important to give the club a high perceived value by adding good features, discounts or even a free wash upon signup. I also like giving it its own logo and signage. In exchange for that value it is imperative that you get as much information as possible from the customer. Ideally you can get name, home address and email. If the club has a high enough perceived value, it should be possible. This is essential because the biggest advantage to having a club is having a way to communicate with your customers whether it’s via direct mail or email. If you have a POS with a customer tracking option it will also allow you to analyze customer behavior over time- a tremendous asset. I strongly believe that having an active opt-in list of your customers is an absolutely vital tool for a car wash that expects to be successful in today’s market.

The punch card satirized on Seinfeld may be old-school, but it still works. The important part is to make it simple enough to understand and to make the reward reachable. If you have a POS that can keep track then great, if not the old punch card will work.

A frequency discount is a great tool to get people in more often. I like deep discounts with short expiration dates. For example, on the receipt or with the receipt you can offer a discount for 25%-50% off if they bring in another car within 24-48 hours. This might be enough of an incentive for that customer to bring in their second car that they weren’t planning on washing. Or, they might give it to a friend who can’t pass up the discount. Either way you’re washing another car that you probably wouldn’t have washed without that promotion.

Prepaid wash books or cards are another way to increase frequency. For example, a card with 4 washes for the price of 3. Really, this is a different pricing model not a promotion, but it often increases the frequency. They key is to make sure you’re not rewarding customers who would have come in anyway. In other words, if you have a customer that comes in once a week, they would obviously be interested in a prepaid card. While you would get the money up front you might be hurting yourself by discounting a customer who was already planning on spending full price. The key is to track your dollar per car report and make sure the prepaid card is not lowering your average. If it is, simply decrease the discount- instead of buy 3, get 4, increase it to buy 4, get 5.

Unlimited Plans are another growing trend that helps increase frequency. Again, this is more of a pricing model than a promotion but they work. They key is to get a system to manage the plans and promote, promote, promote.

A rain guarantee will also help customers come in more often because it removes a common reason to wait to get their car washed. They key is that it is well promoted so that they remember the guarantee when they’re home deciding whether or not to visit you.

Finally, keep in mind that marketing should be as quantifiable as possible so that you know what’s working and what’s not. When it comes to customer frequency, we are talking about something measurable even though it’s easier said than done. If you have a POS that can keep track of license plates, use it. Then analyze it and compare it to different promotions you run to see what the effect is. Even if you just track your membership club, it should help you determine what’s working and what’s not.

No one in this economy can afford to ignore customer frequency. Give it some thought and come up with a plan to improve it. Your efforts will be well worth it.

This article was written for the March, 2010 issue of Modern Car Care.

A Guide To Green Marketing

2009-12-22T10:19:00.006-05:00

Green marketing might be the car wash industry’s biggest opportunity since we swapped out brushes for cloth. To date however, few operators have been willing or able to make environmental issues a core part of their business strategy. This is despite the fact that car washes are intrinsically “green”.

Green Marketing History
The term Green Marketing grew in popularity in the late eighties and early nineties, as environmental issues became a growing concern and topic of conversation for many Americans. While there had always been a handful of companies with owners that were public advocates for certain environmental causes, few companies had thought of environmental issues as being an opportunity to increase the value of their products or services. However, as the issues became a regular feature of news coverage, consumers began looking for companies that took steps to reduce their impact on the planet. Increasingly, over the past twenty years, everyone from GE to Domino’s Pizza have tried to include “green” in their marketing plan. The problem however, is that there has been a lot of confusion over what it means to be “green” and too much focus on jumping on the green bandwagon instead of focusing on implementing real environmentally friendly measures. This has resulted in many companies touting themselves as “green” but not making clear what that means. If you do a search for “green marketing” on amazon.com you’ll find over 4,000 books to guide the way, but many business still fail to find the balance between real and merely superficial green efforts.

So before we talk further about Green Marketing we need to agree on a definition. We can define Green Marketing as communicating with your community about the measures you have taken to reduce the negative impact of your services (or the alternative) on Earth’s ecosystem.

Why You Should Care About Green Marketing
Aside from the altruistic benefits that come being a better steward of the planet, Green Marketing represents a real business opportunity. Green Marketing demonstrates that you are a responsible local business that cares about the community. For most carwashes, 80% of their business comes from within a 3-mile radius. Therefore, showing that you care about the local water supply and local environment creates goodwill and increases the perceived value of your car wash. In a world where we are inundated with marketing messages, goodwill is the stuff that cuts though the noise and proves that you care about more than just profit. It builds trust and creates a more loyal customer.

For this reason, demonstrating that you are concerned about the environment helps build a strong brand that resonates with the community- whether you have one car wash or a hundred. All great retail brands are based on values. In his book, “Pour Your Heart Into It”, Howard Shultz, creator of the Starbucks brand, wrote, “the most powerful and enduring brands are built from the heart. Their foundations are strong because they are built with the strength of the human spirit, not an ad campaign.” Communicating values has always been a difficult thing to do in car washing because it’s perceived as a commodity. However, car washes are naturally environmentally friendly when compared to driveway washing. This environmental benefit provides a built-in path to a values-based brand.

If you want to explore the possibility of utilizing Green Marketing, the most important question about Green Marketing is not how you implement it, but why. Authenticity is the most important aspect of succeeding with Green Marketing and companies that try to appear environmentally conscious by slapping a label on a product or to their website do not understand what Green Marketing is all about. For example, the ICA has recently created the WaterSaversTM program to help car wash owners “promote their environmentally friendly business practices and educate consumers about the environmental benefits of professional car washing.” While this is a valuable service and a commendable effort, impact from Green Marketing can only come from an operator that makes environmental concerns one of the values his or her business is built on. Marketing is about listening, learning and reacting to your customers. So Green Marketing means you have to be concerned about what your customers are concerned about.

Therefore, if you want to succeed with Green Marketing you have to personally care about what’s happening to the environment. That personal concern can then translate into real action and an authentic tone that will resonate with customers. Of course, this doesn’t mean you are required to handcuff yourself to a tree about to be chopped down or adopt a whale. What it does mean is that you should educate yourself about the facts behind the environmental concerns. Ignorance is bliss, but knowledge is required if you want to tell your community that you care about the environment. Al Gore’s documentary, An Inconvenient Truth is a great place to start to accumulate facts about the impact humans are having on the environment. Besides that there are plenty of books and articles on the Internet to help you determine what your personal commitment level is to environmental issues. And while there is debate about global warming, no scientific body of national or international standing has said that global warming is not real. The debate is more about how severe the impact will be, not whether it exists. In addition, our growing impact on local water sources and animal habitats is an unfortunate fact. So before you say that this is all a conspiracy and that you don’t think it is worth reacting to, make sure you understand the facts.

Once you’ve decided that environmental issues should be part of your business, take a Green Inventory to determine what you are doing that is environmentally friendly. This includes water management (i.e. reclaim systems, reducing nozzle size, etc.), power management (i.e. VFDs, less motors, more efficient motors, fluorescent bulbs, etc.) and conservation (recycling, biodegradable chemicals, using recycled paper, etc.). Green Marketing makes the claim that your business takes measures to reduce the negative impact of your services on Earth’s ecosystem. Your Green Inventory is going to be how you back that claim up and prove that it’s more than just advertising.

The next step is to communicate these efforts to the community. To begin with there should be signage describing some or all of your efforts. Signage is best kept simple so don’t try to say too much. Just make it clear that the environment is important to you and that you have taken concrete steps to make sure your business is environmentally responsible. From the signage you can direct their attention to your website where more information can be made available. On the website you have more room to explain exactly what you are doing. This should be its own page or pages with an obvious blurb and link on the homepage. You can also create a simple logo signifying your Green efforts that you can include on the footer of the website, signage, letterhead and everywhere else. In addition, green practices are the perfect topic for posts on social media networks like Twitter and Facebook since it’s non-promotional but increases your perceived value.

Besides lowering your car washes negative impact on the environment, you can also get involved with a local or regional environmental group through involvement, donations or both. This is another way to back up your claims and it connects you to people that share your values.

Another important part of Green Marketing is training your employees to make sure they understand how and why you are committed to environmental issues. This ensures that you won’t be the only one finding ways to be greener and helps prevent employees from circumventing environmental policies because they thought it was just lip service.

Between the current economy and the new consumer behavior it has yielded, car wash operators have to do more than ever to attract customers. It’s imperative that you stand for something and do everything you can to increase your perceived value. Being environmentally conscious and making it an integral part of your strategy is a great way to do just that. The important part is that it’s authentic and more than just a label.

Hopefully, one day professional car washes will be known far and wide for their environmental benefits. This heightened awareness could lead to a nationwide ban on driveway washing and the market for professional car washing could explode. However, that day will never come unless more operators take a sincere interest in the environment and build their strategy around being green.

This article was written for the February, 2010 issue of Modern Car Care.

Why Good Website Design Starts With Sitting On a Bench

2009-11-06T12:23:00.003-05:00

Nothing has changed business in the last 15 years as much as the Internet. Yet, despite its far-reaching presence in the lives of millions, most small businesses, including car washes, have yet to tap the full potential of the web. Before we start thinking about the actual design of the website, we need to understand the purpose of the website. Far too many operators think of the website as a modern version of a yellow page ad. However, it is far more than that.

To illustrate: Imagine you were sitting on a bench in a busy mall waiting for your wife. The guy sitting next to you strikes up a conversation and asks you what you do. You proudly tell him you are the owner of Acme Carwash. He tells you that he lives in the community and his car his filthy and desperately needs a wash. Then comes the million-dollar question: "Tell me why I should come to yours?"

This is a simple question with profound implications. It's profound because business is all about offering value and differentiating yourself from the competition. Therefore, your answer to this simple question represents the type of business you have built and your vision for its success. In business books they call it the "elevator pitch". The convincing short pitch about your business that you can tell someone in the time it takes to get to ride an elevator. (Your answer is based on your value proposition, which is a hugely important part of your marketing and success, but that's an entirely different article.)

Ok, getting back to the mall bench. You tell this guy that what makes you different is your commitment to quality and customer service. He shakes his head approvingly, but you realize he's still not sold. For all he knows, your just saying that and in reality your just a guy with a bucket and a sponge. So you take out your cell phone and show him some pictures of the wash. You show him one of the car wash from the street showing the building and landscaping. Then you show him one of a car going through the tunnel covered in triple foam wax. You show him a few more of the equipment room, pointing out the high quality chemical drums. The last one you show him is of your reclaim system and you explain a little bit about how reclaim enables a car wash to be environmentally friendly.

By the way, as you’re talking, he's subconsciously analyzing how you look. If you look clean, neat, and professional he's much more likely to trust what you're saying. If you wearing an outfit that was in style 20 years ago, or worse, look sloppy or even dirty, he's not going to believe a word you say.

After showing him the pictures he seems sold on your wash, but you still see a glimmer of doubt in his eyes. Although he now knows you're car wash is more than just a bucket and a sponge, he's not sure he can trust you about your claim of high quality. After all, doesn't everyone say that? Realizing what he's thinking, you reach back into your wallet and pull out a few testimonial letters you happen to keep on you. You show him the one from Mrs. Smith about how she wouldn't take her car anywhere else, and the one from Mr. Jones about how the Ultimate wash really makes his black luxury car shine. After a couple more he really seems convinced that your wash is worth a try. In preparation of his visit he asks you what kind of wash packages you have. You list them all but spend some extra time explaining why your Ultimate wash is the best value. As he gets ready to leave, you feel confident you’ll see him down at the wash, but to give him even more incentive you offer him a promotion to seal the deal. Smiling, he gets up from the bench and he tells you he’ll see you soon. Before he walks away though, he asks you for directions to the wash and your hours.

As your wife returns, with shopping bags full of items she's "saved money" on, you’re proud that you've convinced one more customer to visit your wash.

That is in essence what happens each time a visitor comes to your website. Your website is your opportunity to sit on a bench in a crowded mall and tell anyone who is interested, why they should come spend their hard-earned money at your car wash. It's your sales pitch and at the very heart of good website design. That's why good web design covers these six priorities:

Clearly and concisely tell them what makes you different
Build trust in your abilities and claims
Lay the groundwork for higher revenue per car
Encourage loyalty
Offer an incentive
Give them easy to find operational info

1) Clearly and concisely tell them what makes you different
The key is to really understand what makes you different and then figure out how to say it concisely. No one has the time to read paragraphs worth of information, so keep it brief- no more than 3 sentences. Also, make sure that your message comes across loud and clear, not just on the home page and "About Us" page, but throughout the site.

2) Build trust in your abilities and claims
Marketing is all about building trust. In web design we do this in three ways:

a) Professional Appearance. Appearance is our first indicator of trust. The assumption will always be that your website mimics your business. If it is clean and well laid out, then so is your business. If it is sloppy, then so is your business. If it is dated and out if style, then so is your business. You get the point. Appearance matters. Your website is more than a yellow page ad so don’t think you can just list your information while ignoring style. This is increasingly important as a younger generation of consumers are looking for companies that have a strong presence on the web.

b) Pictures. Pictures speak volumes about your business and go a long way in building trust and helping consumers picture themselves at your wash. It also, removes much of the fear consumers have of visiting new businesses. Have at least 5 and have them taken by a professional. If you can’t afford a professional have an employee, friend or family member who takes good pictures do it. Ideally it would be someone with a good eye for composition and light, with a digital SLR camera who can also use Photoshop if necessary.

c) Testimonials. When we hear positive reviews about a product or service it removes barriers to our purchase. It is clear proof that other consumers have been happy so why wouldn’t I. They don’t have to be full-blown letters- just a few sentences are more than enough. To get some testimonials be on the look out for your loyal customers. When you find them, ask them if they would mind writing a brief 1-3 sentence testimonial. Make sure you have index cards or a simple form ready if they say yes. Also, have your manager and/or cashiers looking for them too. Just make sure your not too pushy- it needs to be sincere and authentic. If you can, and the customer is ok with it, take a quick snapshot of them. A testimonial with a picture has more convincing power. This could yield either a few testimonials to spread throughout the site or enough for a whole page dedicated to testimonials.

Keep in mind though that with appearance, pictures and testimonials your website will create expectations. Make sure that these expectations can be realistically fulfilled.
3) Lay the groundwork for higher revenue per car
Remember, your website is not a yellow page ad. It’s an opportunity to “speak” to the consumer and give your best sales pitch. When you were talking to that guy on the bench, you recommended your top wash because it offers the most value. Your website should clearly explain the value of your top packages. It should be clear by looking at your wash listings which wash package you are trying to sell.

In addition to your top package, make sure you are also touting the benefit of detail services, unlimited plans, other extra services, etc. The goal is to clearly explain value so that the customer spends more when they arrive.

4) Encourage loyalty
Your website is a powerful tool for branding and reinforcing loyalty. This happens most of all through a strong brand. However, you can also advertise your loyalty club, rain guarantee, frequency discounts and any other programs you have to encourage loyalty. You can also offer easy ways for customers to be notified of promotions and be connected to your brand through email and/or Twitter and Facebook accounts.

5) Offer incentives
Your website is a great tool to attract attention. Once you have their attention though you need to make sure you convert that attention to actual sales. Therefore make sure your website is constantly updated with current promotions and incentives.

6) Give them easy to find operational info
Of course, once you’ve convinced them to visit your car wash, you need to enable them to do that. Location, hours of operation and contact info should be very easy to find and always up to date.

A well-designed website is a powerful sales tool that can help attract customers, get them to visit more often and increase how much they spend each visit. The key is that it is “well-designed”. That starts with an understanding of the purpose of the website and an ability to concisely explain why your business is different. Do it right and you will see real results.

Rain: Enemy or Savior?

2009-10-26T17:00:00.001-04:00

Rain has always been an enemy of professional car washers for the obvious reason that a car wash can't open when it's raining. However, I believe the most damaging effect of rain is not that it closes the doors, but that people think it's a car wash alternative.

An indicator of this was the Subaru commercial last year that showed an outdoorsy male getting his Subaru filthy through his active pursuits. As the car's layer of dirt grew, passersby wrote the classic, "wash me" on the window. It then escalates to "Please wash me" and then to "Please wash me now" as the voice-over of the owner explains that the dirt and dust is a "badge of honor". At the end of the commercial, as it's raining down on the car and washing away all the dirt, the owner confesses, "I just let the universe take care of it".

At first, I thought this was an advertising agency trying to be cute, unaware of the negative message they were sending to car wash customers everywhere. Kate Karr, Editor of PC&D drew a similar conclusion in the December '08 issue. However, I recently did some research that supports the conclusion that, rain-as-an-alternative-to-car-washing is a widely held belief and that the idea gave birth to the commercial and not the other way around.

I was checking out some Twitter monitoring software that searches all Twitter posts for keywords you enter. It's mainly for companies that want to see what people are saying about their company or product. Out of curiosity I entered, "car wash". The vast majority of results (80%-90%) echoed these 3 examples:

"rain so heavily just now. awesome..now i dont have to wash my car!"

"yay for rain, i was getting worried i might actually have to wash my car."

"Thanks for the rain mother nature I needed a car wash lol"

I was surprised that the vast majority were like this so I searched, "car wash rain". I found about 1,000 per week that were similar to those above. The surprising thing is not that some people feel this way, it's that this is the theme of the vast majority of conversations being had about car washing.

The other topic for car wash conversations were similar to these 2:

"I need to wash my car,but I kno its gonna rain ugh!"

"I wanna wash my car, but I think its supposed to rain 2morrow damnit"

As an industry it seems we have collectively failed to address the negative impact rain has on our business. The Subaru commercial is a result of that failure.

How can we battle rain, you ask?

First, we need to do a much better job of educating our customers about the damaging effects of acid rain on a car's finish. We need to see marketing messages such as, "Wash your car after it rains! Acid rain eats paint!"

Imagine if we as an industry were able to effectively communicate the idea that acid rain is bad for cars. Rain would turn from enemy to savior as people thought about getting their car washed every time it rains.

Second, every car wash should have a rain guarantee and a gratuitous amount of signs and messages announcing it's comforting value. A rain guarantee should be so deeply etched in your customer's mind that they could never use possible rain in the forecast as an excuse to avoid your car wash. If you think a rain guarantee is an expense and a hassle you're not understanding how much business you are losing right now because of NOT having an obvious rain guarantee.

If we can effectively address these 2 rain related problems, rain might be the best thing to ever happen to car washing.

The Impact of Swine Flu On Car Washing

2009-10-14T11:00:00.000-04:00

Everyday we hear more about the potential catostrophic epidemic that is H1N1, or more poetically, Swine Flu. While I think (as does my doctor and my kids pediatrician) this is a lot more hype than is warranted (the regular flu kills 36,000 people every year), it's still something businesses need to think about. After all perception is reality.

When it comes to car washes this can have an effect on your marketing, or more precisely, your image. Since car washes are retail businesses that deal with hundreds (hopefully thousands) of customers each week, there is a potential risk for transmission of those little Flu bugs flying around your property. Like I said, I think this is more a perception issue than reality, but your customers want to feel safe while on your property.

So while I'm not suggesting you shut down for the season or order surgical masks with your logo on them, it's worth limiting the potential impact (perceived or real). Some Tips:

Have a staff meeting explaining the importance of good hygiene such as covering your mouth when you sneeze and washing your hands often. More can be found at the CDC's site. The last thing you want is an outbreak of any virus keeping half your staff home on a busy winter weekend.
Come up with a policy for taking sick days. Assuming your employees want to come in to work, they might push themselves to come in even though they're sneezing, coughing, etc. Regardless of what they actually have, you should have a policy on what the visible symptom tolerance is.
Make sure greeters, cashiers and anyone else that comes in direct contact with customers by handling money, tickets, etc. are particularly conscious about washing hands and not sneezing on customers.
Make sure employee bathrooms and/or break-rooms are stocked with plenty of anti-bacterial soap and tissues. It's also a good idea to mount a bunch of hand sanitizer dispensers.

Hopefully, come Spring we'll realize the big Swine Flu epidemic of 2009/10 was just another media/pharmaceutical money maker. In the meantime it's better safe than sorry.

Are You Marketing To The "Average American"?

2009-10-12T11:54:00.000-04:00

A newly released white paper from AdAge.com reveals that the idea of an "average American" no longer exists. Demographics expert Peter Francese writes that the upcoming 2010 census will reveal that, "the average American has been replaced by a complex, multidimensional society that defies simplistic labeling."

Just remember that as you craft your marketing strategy. One of the biggest mistakes I see car washers make is ignoring the growing Hispanic demographic in their communities. I'm not suggesting you change all your signs to Spanish. But not marketing to ALL the customers in your community is a mistake no one can afford right now.

The White Paper is $249, but you can click here for the summary.

Smart Ways to Increase Your Average Carwash Ticket

2009-10-08T14:03:00.000-04:00

From the October issue of Modern Car Care

Increasing your average ticket has always been an important part of a successful carwash, but with car counts shrinking or stagnant at many locations, there has never been a more urgent time to focus on getting the customers you do have to spend more per visit. That means that a focus on — or even better, an obsession with — increasing your average ticket should be at the top of the priority list.

Indirect Ways to Increase Averages

Most discussions about increasing ticket averages start with greeter upselling techniques and/or menu sign design. While these are important (and we’ll get to them shortly), we should start with an obvious, but often forgotten, principle: consumers pay for products and services that they value.

Therefore, if you want people to give you their money, you need to make sure you offer them something of value during each visit. If you want more money, offer more value. The following methods are indirect because they relate to your business as a whole, not just the methodology of getting a specific customer to spend more at a specific moment.

1. Perception is Reality. I know this sounds obvious, but to get consumers to spend more (or at all) you have to do a good job of cleaning their car. What’s less obvious is that perception is more important than reality. For example, I once visited a carwash site where the owner had recently replaced his ancient equipment with a brand new rack. At the same time he switched over to a top-quality chemical. The owner was proud of the results and the cars were coming out better than ever.

However, he was surprised that his average ticket went up only a little. The problem was that while he improved the equipment, he didn’t do anything about the dimly lit tunnel, its filthy walls and windows, the rusty radiant heaters, or the exposed rusty overhead girders.

Even though he had invested money to produce a cleaner car (and the cars were cleaner) the perception was not equal to the reality. A basic assumption held by average consumers is that a clean car cannot come out of a dirty tunnel. Conversely, some operators can have basic equipment (in good condition, of course) and earn a higher average ticket because of a great soap foamer and bright, bubbly triple foam.

In fact, the prevalence and selling power of triple foam over “hot wax” proves that consumers value perception. I believe that in the future we’ll see more “perception-focused” equipment from manufacturers. One example is the Bubblizer from NS Wash Systems, which adds theater to the pre-soak process by dropping big bubbles on top of the car.

Bottom-line: Keep your site and tunnel spotless and make sure your foamers are in tip-top shape (if you don’t have a foamer, put it at the top of your “equipment to buy” list). Take a step back from your wash and look at the overall perception from each point in the washing experience. Consumers will spend more when there is a higher perceived value.

2. Branding = Perceived Value. Branding might sound like just another marketing buzzword, but it could be the most important aspect of your operation. It is essentially the personality of your business. There are many branding definitions, but the one I like the most is from famous ad man Marty Neumeier: “A brand is a person’s gut feeling about a product, service or company ... When enough individuals arrive at the same gut feeling, a company can be said to have a brand.”

Effective branding increases perceived value, differentiates your carwash from competitors and creates a more loyal customer.

Bottom-line: Don’t be just another carwash. Stand for something and make that stand evident at every point of customer interaction.

3. Pricing. Pricing might not be a sexy topic, but it is one of the most basic marketing tools. If you haven’t analyzed your pricing lately now might be the time. Make sure you have an up-to-date spreadsheet comparing your prices to your closest competitors’. If you are able to raise your prices even by pennies (hopefully anchoring on a clear promise of value), it can make a big difference at the end of the year.

Bottom-line: Take the time to make sure your pricing is where it should be and don’t be afraid to raise it if competition and/or your level of perceived value warrants it.

Direct Ways to Increase Averages

While these methods are more obvious, they still are not set-it-and-forget-it solutions. I highly recommend experimentation with even minor variations over time to see what works and what doesn’t. Remember, even an increase in pennies will make a difference at the end of the year.

1. Greeter. No single element improves average ticket more than a trained greeter/salesperson. A trained salesperson can point out the value in each wash and can adapt to each customer and vehicle. While we cannot deny the higher cost of labor and energy it takes to train a salesperson, if done right it is well worth the cost.

In selecting a salesperson, look for someone with good communications skills. This should be someone who is fairly outgoing and wouldn’t be described as “shy.” You want someone who can look you in the eye and is not afraid to smile.

When it comes to the sales pitch there are dozens of ways to do it. A lot depends on your market, as well as the style of the greeter. One of the best methods is the “service adviser” who looks over the car as it approaches and
recommends services accordingly. Advisers may point out some brake dust and suggest the package with the “wheel treatment” or may point to aging paint and suggest a package with wax.

Another method is the upsell. Whatever package the customer first asks for, the greeter suggests the next higher package, pointing out the added value: “For only $3 more you can get ...” Most customers usually purchase the same thing and might not even consider another package until it is explained.

Note for express operators: Your pay stations are your greeters. Each manufacturer can suggest ways to use the pay station software to hopefully yield a higher average. Make sure you speak with your sales or support rep often to make sure you are using the software to its fullest potential.

Bottom-line: If you’re not an express operator, don’t put off hiring, training or incentivizing your greeter. If you don’t have the energy, higher an outside training firm. Work on new approaches to find out what works. Nothing can bring you a higher average ticket quicker than a well-trained greeter.

2. Menu Sign. Next to a greeter, menu signage is your single most important element. Essentially, your menu sign is a salesperson, whose job is to present customers with options and make recommendations. The key behavioral pattern to remember with menu sign design is that if consumers are confused or overwhelmed by their choices, they will almost always pick the most “basic” option or pick what they’ve purchased previously.

It’s a form of paralysis by analysis, where too much information prohibits an informed decision. Simplicity, ease of comprehension, and intuitive differentiating value are key.

Simplicity is key because customers only have a few seconds to really understand their choices. Too many options will trigger paralysis by analysis. Ideally you should have three wash packages and three extra services (maximum four). Package names should also be simple and easy to remember. Theme-oriented names should be avoided if they’re not as simple as Bronze, Silver, Gold or another simple naming convention. There’s no need to be overly creative here. Also, too many graphics and/or images can lead to confusion.

Comprehension begins with being able to read the sign, so make sure it is big enough to be read three cars deep in your stack. If you can’t make it that big, buy multiple smaller signs and place them closer to the cars. Remember, too, that we read top down and left to right, so the most expensive (and hopefully the best value) wash should be listed first, either at the top or left.

Also, make sure that service inclusions are easy to comprehend. Don’t feel the need to list every possible inclusion (i.e., soap, water, wax #1, wax #2, dryer, etc.). While you might think it increases perceived value, it only confuses. From a design standpoint, avoid decorative fonts. Stick with a sans-serif font and leave plenty of negative space (blank space with no content).

Intuitive differentiating value means that it is blatantly obvious that the Silver wash is a little better than the Bronze wash, and the Gold wash is clearly the best wash. This is another reason why simple package names should be used. It also reinforces the importance of keeping the wash inclusions clear so that it is obvious which additional items customers get with each wash. Color also is an important tool to help signify value and make your menu easier to comprehend.

Bottom-line: Menu signs have a huge impact on your average ticket. If you have a sign that’s cluttered, confusing or hard to read, invest in a new, professionally designed one. Every day you put it off is leaving money on the table.

3. Pre and Post Transaction Signs. Another simple and affordable way to increase your average ticket is with pre-sell and post-sell signage. Pre-sell signage is very popular in the fast-food industry and you almost always see them before you get to the menu sign. In the carwash industry, they are just as relevant but not nearly as popular.

I suggest a simple sign that highlights a single, extra service in order to whet a customer’s appetite. It could say something like, “When was the last time you waxed?” or “Do you like shiny tires?” Signage should be concise and easily readable as customers drive toward the point of order.

Post-sell signs are valuable because they can sow the seeds of a customer’s next visit. Tout the benefits of your top package or the importance of a particular extra service. By planting the seeds during the current visit, you can yield a higher ticket on the next visit.

4. Manager Specials. These types of specials are strategic discounts that are unannounced and random so customers don’t expect or wait for them. For example, you might pick a cloudy day to offer an extra service for half price. There are too many variables to suggest anything beyond this, but it’s worth a try.

Test it out by running a one-day trial. At the end of the day, check the reports to see if the higher quantity of extra service at the discounted price makes you more than the average quantity at the regular price. Experimentation is key.

Bottom-line: You shouldn’t offer these specials every day and be sure to rotate your offers.

These are just some of the ways to increase your average ticket, and in reality, the application of each suggested method could fill volumes. The key is to make it a priority (if not an obsession) and experiment to find out what works for your wash.

In a tough market, nothing could be more important and more urgent than focusing on increasing sales from the customers you already have. Do it well and all those pennies can make a big difference.

Consumer Experience Matters

2009-09-30T11:00:00.000-04:00

One thing I often preach about is consumer experience. It's so integral to perceived value and therefore marketing in general, but it seems so few give it any thought. I'm not saying focusing on outputting a clean car is not important- in fact it's vital. However it is not the only thing to focus on.

Simple Exercise: Assuming you're a coffee drinker, next time you wake up and go for your morning cup, don't reach for your standard old "#1 Dad" mug. Instead find the china that only comes out for company and pour your coffee into a china cup rested delicately on a saucer. See how you feel. How does the experience differ from when you use your mug? It's the same coffee, brewed from the same pot, but it's different. And if you concentrate hard enough I bet you'll perceive that it even tastes a little better. The difference is not the coffee but the vessel. The difference is not the reality, it's the experience.

Marketers understand this and go to great lengths to tweak the consumer experience to reach the maximum perceived value. When done right this ALWAYS results in a real improvement in the bottom line.

So keep focusing on putting out a clean car. Just don't forget to spend some time focusing on the consumer experience.

Are You Really Customer Focused?

2009-09-24T09:18:00.000-04:00

Good marketing is founded on a solid understanding of your market and more specifically, your target customer. I'm not going to go into to much depth about figuring out who your target customer is, but you probably already have some idea. The question is are you, as an operator, as a business person, focused on that target customer?

Here's an exercise: try and think of an actual customer who you would say fits your target customer description. Yes, think of the actual person. Think of what they look like, what they drive, what their basic life situation is (if you don't know these things, have a brief conversation next time they come in- it's important). Let's assume your now thinking of an actual customer- let's call him Bob.

Now, every time your in your office doing some type of business planning, think to yourself, "How is this going to effect Bob?" The reality is you probably have a few target customer profiles. In your mind nominate an actual customer to represent each profile. Every time your planning something or making a decision, think of how it will effect each of those actual people.

Jeff Bezos, founder of Amazon.com once started an executive meeting by announcing that an empty chair at the table represented 'the customer.' Throughout the meeting, the executives were compelled to include the customer in their thought process, and to consider their comments' implications on the customer, as if 'he/she' were present. This has been a practice at Amazon meetings ever since.

You would be amazed at how this simple method helps you become more customer focused. Just be careful not to have full conversations out loud with your imaginary customers. People might think that's a little strange.

Why Ask "Why"?

2009-09-23T16:49:00.001-04:00

I love the question, "why?". I think it forces us to get to the heart of real problems and find real solutions. It helps us avoid the status quo and helps prevent self-deception where we see only what we want to see.

The most important "why" question is: Why do people wash their cars? It sounds simple, but in fact it is not. Go ahead and ask someone that question and I guarantee you'll get a stunned look and a long pause before you get an answer. It's one of the questions we ask during customer surveys and it always produces a funny look. When you do get an answer it's an unsure one that sounds something like, "Uh... I guess it's because... or maybe it's because...". That kind of response proves that the answer is not so simple and lies somewhere in our subconscious. If you keep asking why, you come down to the real answer. It usually goes something like this:

Me: "Why do people wash their cars?"

Them: "Huh?"

Me: "Why do people wash their cars?"

Them: "I don't know. I guess people want a clean car."

Me: "Why?"

Them: "People prefer things to be clean."

Me: "Why?"

Them: "It makes them feel better."

Me: "Why?"

Them: "Because we feel better about ourselves when we're clean."

That's exactly the answer: People wash their car because they feel better about themselves when they're clean. The simple two-word answer is self esteem. Our perception of ourselves is directly related to our appearance. It's why a person 150 pounds overweight typically has less self-esteem then a person who exercises everyday. If you're going out to a nice restaurant with friends you haven't seen in awhile, what would make you feel better about yourself: wearing a new, freshly pressed shirt or your old wrinkled shirt with yellow stains around the collar? The bottom line is that cleanliness makes us feel better about ourselves.

This seems simple enough, yet look around at the marketing you see in the industry. Car washes market their services as if they're in the same business category as mechanics, auto body shops, quick lubes and other car-centric business. Yet they're not. In those business people HAVE to go or else their car will stop working or the bumper will fall off. If they don't go, then they won't be able to get to work, go grocery shopping or take little Johnny to the soccer game.

Here's my point: We're in the self-esteem business and we should act like it. This shouldn't just be a philosophical point to bring up at trade show dinners. It should be a cornerstone of our business planning. Accepting this idea changes the way you look at your business and the prioritization of what needs to be done to build your business. Car washes are more similar to tanning salons and gyms than most people realize.

Think I'm crazy? Most people said that about Starbucks when they charged $4 for a cup of coffee. But the reason they were able to do that and flourish was because they didn't focus on selling coffee. They built everything around the user experience and making consumers feel good about themselves by buying their product.

Here are some practical things operators can do to capitalize on this understanding that we're in the self-esteem business. If you're wondering why it matters, it's because these things have a major impact on perceived value and perceived value is why people give you their money.

(1) KEEP YOUR CAR WASH CLEAN! Not keeping your facility clean is the number one sin of car washing. Would you go to a doctor who smokes, eats Twinkies all day and is barely sober? Would you hire a roofer if his own house leaked like the Titanic after it rained? If you're in the cleaning business then you have to be clean. We're selling the emotional impact of being clean. That impact needs to begin when they enter your lot. Also, cleanliness includes clutter, so don't leave those empty 55-gallon drums piled up where the customers can see them, even if they are piled neatly. And don't forget the uniforms.

(2) Highlight the self-esteem value of washing a car in your marketing.

Pick a message and stick to it. They may sound funny, but use phrases like, "clean cars make happy people", or, "Wash your car. You deserve it", or, "Get your car washed. You'll feel better". These types of messages get right to the heart of why people wash their cars- whether they realize it or not. Re-use this message everywhere.
Keep your advertisement layout clean and uncluttered. Don't try and say too much. Focus on your one key message.
Use high quality images everywhere. Use images with clean, shiny cars with happy people next to them. I would even suggest finding a bunch of these type of images and putting them all over your site.

(3) Get the car clean. Oh yeah, this one's important too. Even if you don't have the best equipment, make sure you're there's no obvious flaws in your process. If there are, fix them immediately.

(4) Focus on the consumer experience. It's about perception, not reality. You might be cleaning the car perfectly, but if that's not absolutely clear to the consumer you're wasting an opportunity. For example, get the best foam applicator you can. The more foam the better. It is a clear and visual sign to the consumer that you are getting his or her car clean. Another way to reinforce the experience is tunnel signs. The point is don't just clean the car, find ways to remind the customer you're cleaning the car.

I'm not saying that you need to embrace this idea in order to be successful. However, in any business, a deep understanding of the reason your customers use your product or service usually results in more success. In fact, I don't think that this is something that you can implement partially. That would be like Starbucks springing for nice cups but leaving the inside of the store looking like a Dunkin Donuts. It just wouldn't have worked. It wouldn't have been Starbucks. It has to be done across the entire business and everything has to be brought into alignment with it. However it all begins with understanding that it's not about washing cars, it's about making people feel better about themselves.