August 22, 2022
Do you feel like there are hidden forces slowly siphoning away your car wash profits? In an encore of their Car Wash Show presentation, Chris Moriarity and Kayla Ivey of Suds Creative™ shine a light on some common “Profit Vampires:”
- Lack of customer contact information
- Selling to the wrong people
- Pricing that isn’t married to design
- Not investing in brand equity
Watch now to learn how to slay these Profit Vampires
Kayla: Welcome to Profit Vampires. My name is Kayla Ivey, Director of Product and Services Strategy at Suds. Again, if you missed it, there's a Q&A button at the bottom of the screen, feel free to pop in questions as we go and we'll have a Q&A, hopefully save a few minutes at the end for a little bit of Q&A. And if we don't get to your question, we'll do our best to follow-up after the webinar today. So again, my name is Kayla and I work in our Department of Strategy at Suds. So what that typically entails, just to give you a little bit of background about what I do and my experience with Suds and the car wash industry, is I get to be very, very hands-on with car wash owners and operators and their goals and helping them create strategy to achieve those goals. So that might look like hitting the next level of member count, the next level of revenue or profitability. And I've had a hand in hundreds of go-to-market campaigns over the years, seen what works, what doesn't, with new new site openings, as well as probably hundreds of other promotional campaigns, whether it be holiday campaigns, membership campaigns, you name it, I've probably seen it. So I'm hoping that's what I can share with you today. We're going to be talking about profitability as our theme, so I can share some insights that I've learned along the way that hopefully can help you out as well.
Chris: And my name is Chris Moriarity. My title is Senior Vice President of Strategy and Innovation, and while that sounds fancy, basically, at the end of the day, here's what I do. We know that more and more data is flowing through all the sites coast-to-coast, just more and more every day, and we're kind of privileged that we sit smack dab in the middle of it. So very often, people look to us to say, "Hey, why is this happening? Is this happening to me? Is this happening to everyone in the state? What's going on? Are my prices good? Are my price is bad? How come there is a stack of cars half a mile long, three blocks away, and I can't figure out a way to sign up 10 members?" Or whatever the case may be. So as we kind of explore this data, you know, we don't collect it for us, we gather this data so we can share it with you. When you're opening these locations, whether it's as an entrepreneur, as a group, whatever it is, you're taking on that risk, so the more that you know and understand about why things are happening, it lowers that risk. So as we kind of share some of these tactics, it's with that in mind, so within that Q&A button, if there's something we don't cover, you'd like to see a future session on, certainly let us know. Back to you, Kayla.
Kayla: Absolutely. Thank you. So before we dive into Profit Vampires, which we're all here for, just giving you a little bit of background on who Suds is, in case you're not familiar. So I think the best way to sort of showcase what Suds does and the types of clients that we work with is just by going through kind of the three main car wash owners that we typically tend to work with. So, one is going to be like brand new site operators, new to the industry, new to the market, looking for everything from branding, to signage, to a go-to-market strategy to get off the ground as successfully as possible. So that's kind of one end of the spectrum. We also work with mid-size operators who have been in the business for maybe a number of years, they're doing well but they're looking at, "Okay, how do I kind of get to that next level? How do I get to the next level of membership or growth?" Whatever that means for them. And then lastly, we also work with large scale operators, so a little bit more complex. They might have dozens of sites maybe in a number of different markets, and they look to Suds to help with the analytics piece. So we have very robust analytics capabilities that can help car wash owners of really any size, understand their numbers, understand what those numbers mean and the insights from the data. So not just what is your data saying, but what should you be doing about it? And then we have the capabilities as well to actually execute on those things, so whether it's marketing strategy, creating a product, that kind of thing. So that just gives you a little bit of background on who we are and why we are here talking to you about profitability. Okay, so let's get into the meat of the presentation today, which is Profit Vampires. So when we say Profit Vampires, what we want you to think of is a vampire. So the term vampire, what do you think about? It's stealthy, sneaky, lurking in the shadows, difficult to detect and it's sort of sucking away something good without you maybe even knowing that it's there. So that's the key and that's why we use that term Profit Vampires, is we see very commonly, car wash owners maybe know that their profitability isn't maximized, but they can't really identify or pinpoint what those leakages are. So what we're going to share today, is a handful of what we see as kind of the major Profit Vampires. So those things that could be kind of stealing away from your potential profitability without you even knowing that those exist. So with that, Chris, over to you.
Chris: Yeah, so a lot of it boils down to, Why Now? So obviously, in this industry, we've got a lot of newcomers, we've got folks who came in with investment groups that are still kind of feeling their way around the industry, and then you've got these legacy folks, whether it's a family, or a group, or whatever, who've been doing this whole thing for decades. And it's certainly not going to shock anybody when I tell you that things have changed rapidly. There's more money flowing into this industry than there ever has been. Everyone wants to know where it's going, when it's going to end, how big is it going to get. And there's so many questions like that, that we investigate all day long. So today, we're going to talk about pricing, we're going to talk about location, we're going to talk about competition, but let's shrink it down and really talk about relationships, because I know we want to believe that quality is the number one reason why people pick the washes that they pick. Spoiler alert, it just ain't so. What does it come down to then? It comes down to proximity, convenience, quality, a blend of things, but ultimately, it's about relationship and it's about loyalty. So how do you foster relationship and loyalty? You have to do it with communication. So when we think about what's going to happen, the people who maximize their data, which I'm going to refer to as just another type of currency, they're going to win. Because if the only way that you grow is on the back of a human being or trying to jam one more car through that tunnel, it's going to start to get really, really hard, so we have to find points of opportunity and leverage where we can take what you're already doing and what you're already gathering and make it more effective. 'Cause if you are one of those legacy groups, you know for a fact, there is a wave, an avalanche, of new sites that are coming to take what you have. And if you are the one on the way in, you are there to obviously carve out your section of the market, your corner of the world. And if somebody is taking what they have for granted, we're not going to feel sorry when we take it from them. So as we kind of explore this, contact information is going to be a pivotal linchpin in figuring out, how do I grow? How do I avoid that plateau? In fact, on the next slide here, as we talk about contact information, we have so much data flowing through here that we can build amazing tools. You probably heard terms like artificial intelligence, AI, deep learning, neural networks, that's what I do, that's what we spend our day doing. In fact, what you're seeing in front of you is a tool called a Retail Optimizer, because we have to stop thinking singly in terms of member growth. Yes, we want members, we want lots of members, we want lots of loyal members and that's fantastic, but we don't want to forget about the rest because the lion's share of the people that you serve are retail patrons, and we virtually ignore them in our quest simply to get more members. Now, with this tool, it works best when you have LPR, and whether it's RFID or LPR, operationally, I don't care. I got no dog in that fight. But more and more groups are running hybrid systems with both, in large part, because with LPR, you can find out more information, meaning I can track an individual through their retail experience, learn about when they convert, learn about when they leave and what happens after they leave. Because most of us think that when a member churns out, they must have gone somewhere else. Somebody else was a dollar cheaper, somebody else had a fancier blower or whatever it may be, and in most cases, that's not true. The membership just wasn't a right fit, they didn't use it enough. And they tend to come back and patronize that same site, they just do so with the frequency that's kind of on par with the other retail patrons. So what this tool does is it looks for them, it learns about them and says, "Hey, of my retail folks, who's supposed to come in? When are they supposed to come in and what are they supposed to spend? And what happens if they don't?" The analogy that I use all the time is one of a restaurant, where if you have a restaurant and let's say that Kayla came to your restaurant every single night, sat down, ordered the same thing, just loves what you do. Then, one day, she doesn't show up. Two days, she doesn't show up. Three days, four days, maybe a week. How long before you might actually be concerned? You might say like, "Well, where did she go?" And you've heard these stories of delivery folks saving people's lives 'cause the person who ordered every day, all of a sudden didn't. But what you have is a very, very big restaurant and there's no way to really monitor, with any sort of human capabilities, who's coming and who isn't. So with these tools, it does notice and it can reach out to those people who were loyal and maybe aren't for a variety of reasons. And we don't have to just give them discounts, sometimes just popping in their inbox is enough to bring them back in. But let me tell you what, all of these fancy tools mean literally zero if you have no contact information. In fact, we ran this for one group, it found 145,000 people that fit this criteria. The value of that was $1.1 million annually. Seven. They had seven email addresses. It means we couldn't contact a single one of them. Now, I am thankful that we have very thick windows in this office, 'cause I just about jumped through it. And I know all the reasons, why we don't want to slow down the line, why we don't want to do all these various things. So whatever you're doing, the answer can't be you're doing nothing, that's no longer an option. And we're going to share some stats with you as we go forward about email collection and text collection, but the short answer is yes, they spend more, they come in more often, they convert at a higher rate, their length of membership or tenure is indeed longer, so we want to start thinking about this differently. And if your current methodology is labor intensive, find a better way, and we have some better ways. But that's the simplest thing that you can do right now to start protecting yourself from oncoming competition, erosion, all the things that could potentially knock down your earnings a little bit. But back to you, Kayla, before I get too carried away.
Kayla: Yeah, so like Chris said, we start with that one 'cause that's really... If you leave with one thing to think about, contact information is our number one, just because nothing else that we will talk about today will matter or be useful unless you have a way to contact those members or retail customers. So, moving along. So our second Profit Vampire that could be stealing from your potential profitability is, we call it, you're selling to the wrong people, and we'll frame this up. So what that essentially means is, we often see our car wash owners that we work with trying to sort of be everything to everyone. So a common thing that we hear is, if we discuss like, who's your target market? Everyone with a car, right? So we hear that pretty often and yes, it's true, but also, we can really dial that in in a way that's going to be so much more impactful for not only saving you advertising dollars so that you're really zeroing in on the people that are likely to come into your wash, but of the customers that you already have that you're trying to convert with certain offers, making sure that you're taking the best opportunity of those contacts that you've collected and selling them offers that they're truly going to be interested in based on their behavior. So I'll get into a couple examples of ways to think about how not to sell to the wrong people in terms of trying to be everything to everyone. So the first one is geographic, and then we'll go into more behavioral. So geographically, this is a really common thing that we see car wash owners and business owners do is try to sort of do an approach where you market to everybody in your market. So this is what's called a Mobile GPS Heat Map, and this is a tool that allows us to be a little bit more, but we're a lot more, sophisticated about who we're trying to target in our area, geographically. So this shows where did people get in their car and originate from to drive to our car wash site, Or right around our car wash site. So this is really important because if you think about your own behaviors, you're getting in your car, driving the same route to work every day, and the same grocery store on the weekends, the same gym, you kind of have your normal routines, and it's pretty unlikely that you're going to go way out of your way to go to a car wash. We know that location is one of the most important factors in car wash specifically. So knowing that, it's really not about where people live, it's about where are they going? Where are they driving to? And you want to be either near their destination or on their way. So this map, if we were to think about a traditional advertising approach, it might be, you know, draw a big circle, draw a radius around our car wash site which is this gray pin in the middle, so draw a big radius and we'll hit all of them with social media ads, or all of them with direct mailers. So what you're going to hit... Yes, you're going to hit some of these red pockets, these are heat zones of concentrated amounts of people who originated from that spot to get to you. So yes, you're going to hit some of those, but you're also going to be kind of wasting efforts on some of these patches of people that are probably getting in their car, driving the opposite direction. So those, no matter what we do, we're likely not going to change their normal patterns of behavior. So this is great because it can allow us to really concentrate our marketing efforts on these heat zones. And then another thing is, it's going to allow us to pick up on ones that we would never know. So there's some really surprising ones that we look at where there's a neighborhood miles away that drives right to us, and it's a number of people that are doing that behavior regularly. So this allows us to pick up on those areas, those pockets of people that we wouldn't know otherwise, and concentrate marketing efforts on those that are naturally, you know, driving toward us so that we're not wasting efforts on marketing to the wrong people that are going the other way.
Chris: And Kayla, can I just add that it's not common, but every now and again, we'll find a group or a site that actually collects the physical addresses of where their members live. And when you take these heat maps and then you plot those members on top of it, it's not a perfect mirror, but it is shockingly close. And where we're used to thinking in those three-to-five-mile sort of radiuses or radii, not sure how you say that, it's often much, much bigger, it's much, much more amorphous. We've got one in the Midwest where it's 11 miles north to south, and 8 east to west, and it looks like a cactus, but everyone falls within that heat map, so you can rely on these heavily to know where they're coming from. Because if you think about the next extension of this, it's where are you going to put additional sites? Or that competition that you believe is competition, are they? Because as you can see here, it's not too far in one direction to another where they might not be affecting your volume at all, or they might be affecting it a great deal, so this can often highlight exactly why things are happening. I love these things.
Kayla: Yeah. Super, super useful. Okay, so that is kind of how we think about this in terms of geographic targeting, making sure that you're targeting the right people. And then another way to think about making sure you're selling to the right people is behaviors. So customer segmentation is essentially a way that you can be a lot smarter about who you're trying to sell different offers to. So in this example, we're going to use the length of how long someone's been a member and how often they're visiting. So Customer A on the left has been a customer for about a year and they visit once every couple of months. So they're pretty loyal, been with us for a while, not super frequent, but relatively frequent for a retail customer. And then Customer B on the other hand, first visited two months ago and they visited three times in the last 30 days. So the lens I want you to think through is let's say we're trying to sell membership, because that's commonly what most car wash owners are essentially trying to convert most of their customers to at any given time. So if we're trying to sell membership, think about, let's say we had a list of Customer A's and a list of Customer B's with all their contact information. I think what commonly happens is we want to send the email blast or the offer to everyone, so we want to hit as many people as possible with, maybe it's a first month 9.99 membership promotion. So we want to hit as many people as possible, try to convert as many as we can, and by sending it to the maximum number of people, we hope that we'll get the maximum results of membership conversion. So what can set you apart here, what you can think about differently in terms of selling to the right people is we actually can look at these behaviors and understand one of these customers is very likely to purchase a membership, one is very, very unlikely to purchase a membership. So spoiler alert, Customer B on the right-hand side is significantly more likely to purchase a membership with an offer than Customer A. And the reason being is simply, that they first visited two months ago. So we know through our data analytics and research that it matters very, very much how long someone has been a customer with us in terms of how likely they are to purchase membership. So we've found that we essentially have a three month window from the first time someone ever visits us to convert them to a member. If they don't sign up within that prime window of about three months, their probability to ever sign up for a membership plummets to like 3%, and it stays there forever. So this is really important knowledge to have so that we can really tailor our membership offers and those types of promotions to the right types of customers, the ones that have visited within the last three months for the first time. Customer A on the other hand, is where we see a missed opportunity. So Chris mentioned this a minute ago, but what about... You know, there's nothing inherently wrong with retail customers. If we have their contact information, can we enhance the profitability and the relationship with a retail customer knowing that this customer is very unlikely to purchase a membership? So if they've been a customer for a year and you're doing everything right in terms of you've made it clear that you do have membership, they've heard about membership before, they've gotten pitched it probably a number of times over the year they've been a customer with you, so it's not on the table for them. And because we know this customer visits once every couple months, it's pretty clear that wouldn't financially make a lot of sense with their behavior, and that's okay. So what we want to think about with someone like a Customer A or similar profiles, is how can we enhance the relationship, enhance the loyalty, get them to come back to us more frequently? So what we could do to be a little bit more sophisticated with how we're selling and how we're promoting different offers, put Customer B into, maybe a drip series where they're getting membership-related offers for three months. Customer A goes into a retail-based, so if someone exits their first visit and then three months later, they're still not a member, put them into something that's more of a nurture campaign to get them to come back as a retail patron. So gift cards, buy four washes, get two washes free, maybe 20% off their next wash, something like that that's going to be meaningful offers for that customer, is going to be... Enhance the profitability rather than just sending them something they're not going to want, as well as strengthen the relationship you have with them, because if you're continually sending them something that's not relevant to them, that they don't want, after a while, that's going to build up a potential negative connotation with your business and they might eventually either unsubscribe or go elsewhere if they're not in the market for that thing. So that's how we can think about selling to the right people in terms of both, yes, where are people living, but also where are they traveling to? And then how are they actually behaving when they come on-site?
Chris: Right on, so we're going to get into all this gobbeldy-go pitch you see in front of you here, but kind of ending on Kayla's point with that Customer B, just to really put a fine point on it, a little less than half of the members that sign up do so on their very first visit. And basically, the other half is going to be within that 30 to 90 days, as Kayla mentioned. At 28 days after their first visit is where the probability starts to drop. So what do you do about that? Well, what if, as cars came in, every car, every time, you said, "Hey, welcome back." Now, why would I do that? Number one, it assumes loyalty, like if somebody has been there before, they're not going to not like that. But what tends to happen is that if somebody has not been there before, they tend to tell you and they say, "Oh gosh, I've never actually been here before." "Oh, I'm sorry. I thought I recognized this car. I love this car." Now, boom! I know that this is the moment. Now, if you stack that and if I find out this is their first visit, it's a black car, there's a bunch of other criteria that we know, stack, stack, stack, stack stack, do whatever it takes. Now's your moment. And giving your team that information on who to look for, 'cause think about where they stand every day, if you've got a 10% enrollment rate, that means 90 out of 100 people are saying no. That's a lot to wade through. That's a lot of energy. So if I can teach the team, if we can grab those boots on the ground and say, "Hey, whatever happens, if you see this profile, they answer like this, that's the person, do whatever it takes, I don't care." Because we know statistically, that's the person who's going to stay. That's the person who we know is going to have the most lifetime value. Give 'em little triggers to bring that attention up. But the reality is, if your site is even modestly successful, there's so much volume coming here. And we say first visit, I'm not talking grand opening, I'm not talking about during a promotion. It doesn't matter when it is, it only matters that it's the first visit for that individual. So if my first visit is in February and Kayla's first visit is in November, that's the only thing that matters. Now, I mentioned LPR earlier, which is a very good mechanism to be able to pick this up. But what you're seeing in front of you is basically a site that's fully optimizing all of their data. What we want is to take the word data and basically find a new way to spell it, which is A-T-M, right? We want this stuff printing money for you. Your data is currency. So I'm not going to kind of work you through every twist and turn here, but I want you to think about it this way. Number one, we know we got to reach out to people. So, okay, you don't want to slow down the line. I get it. Well, what else do we have? If you've got vacuum stalls, then you've got arches, then you've got real estate, put something there. Anything. Have fun with it, lean into it, right? We have been doing this a long time, and let me tell you one thing that we absolutely understand that people think we don't, there is nothing free about a free wash. We fully understand that and there's a reason that we advocate for it, because we have a multiplier effect. If I'm able to gather 1,000 email addresses, right? Now I've got this cluster, I've got this pile of information and people that I can now interact with. Well, people tend to do what their friends and family do. So could I take that list of 1,000 and reach through it and say, "Hey, you know what? We're friends and our customers are our heroes. I want you to be five people's hero today. Pick five people, send them a free wash on us, we want to meet more people who are like you." Well, now all of a sudden, I've got the opportunity to grow that list fivefold for that price. You cannot do that in terms of acquisition value, trying to bring in new blood off the street. It gets wildly expensive. So you now have growth mechanisms that are internal and some that are external, right? You want to start stacking and utilizing these. There's so many folks who didn't gather contact information 'cause what were you going to do with it? There was really no reason for it. Well, as you follow this schematic here and as it kind of swings down through, what this? Suds AI. That first blue box down at the bottom where it says Member Finder, what this does, this is another machine learning tool, kind of similar to the Retail Optimizer that we talked about. 'Cause what Kayla had said was once someone goes past that three months, the likelihood of them enrolling drops to 3% forever. Well 3% is not 0, right? So what this tool does is it watches people, watches their behaviors, and if it says, "Oh, that's somebody's first visit." Boom! I want to pluck 'em out and I'm going to send 'em an offer. Now, does it have to be an aggressive offer? Not necessarily. I do not believe in discounting your way into prosperity. But if I'm going to take a shot, that's when I'm going to take the shot, right? Because other things happen. All of a sudden, yeah, they've been coming for a year, but now they got a new car. Now when I say new car, hear me clearly, it only needs to be new to them, not a brand new car off the lot, that doesn't matter in terms of the behavior, it only matters that the car is new to them because their behavior will change. When you get a new car, I don't care if it's an '86 Tercel, and it's your first car and you love it, you wash it. So the system then says, "Oh, this person's changed. Grab 'em put, 'em on that list." And the same thing for churn, when people's patterns change, the number one reason people drop memberships is not cost, it's the fact that they're not using it. And we can see that consistently, but we can't watch all of that, but we certainly can if we put that data to work. And if somebody becomes at risk, we can start reaching out to them and just engaging, give 'em different reasons to come in, and just have some fun with it. But what we also want to do is not disturb the unicorns. The unicorns are those people that happily use their membership rarely. We love 'em. You let them keep on keeping on. Same thing on the retail side, there's folks that come in with high-frequency and they want to pull that pay full-rack rate. Awesome. Go tell your friends, we'll take all of you. But the idea here is that we want to match people up with what they want and stop pushing the things that they don't want, because when it comes to customers, the only thing that we want is loyalty and we want them to love what you do. And we're going to talk a little bit later about brand, because when it comes down to who are they choosing, in large part, it comes down to who you are and if that matches up with what they're looking for. But ultimately, Vampire #3 here is pricing. Pricing in the Suds world is usually one of the very, very first things that we do with any new client, and it's something that our existing clients will continue to reexamine. We've got groups now that have been through three, sometimes four, different pricing changes, but your prices unto themselves are not what controls your revenue, what controls your revenue are the distributions. So if you go to the next slide, the way you can think about this is as you're scanning all of these various options, the question we want to ask is how are people voting with their wallets? Meaning it doesn't matter what your top price is if nobody's buying it, right? So very often, what people expect is basically a triangle where the most people are going to be down at the bottom, right around your basic washes, and then as that price goes up, it tends to thin out, which I totally understand, it sounds very, very reasonable, but that's only because usually, folks have not recognized how much control they actually have over that experience. The team here at Suds, the design team, Scott, who kind of leads that group, they're absolutely brilliant at what they do. When we change prices, in an effort to reshape that distribution, anywhere from 12-15% of the gains that come after that price change are being driven by the design changes alone. And I won't give you the length of the explanation about how we measure that, but that is 100% of the Profit Vampire. We see menus that are just a shotgun blast of information, we see them loaded up with, here's... How many things do I need to list until you love me? Right? What we do, less is more. We've run so many various experiments to say, "Hey, if we adjust this this way, this this way, this size, that size, this angle, can we slide more people into different buckets? And the answer is absolutely yes. When people are coming through that line, we want them to react, we don't want them to think, and we certainly don't want them doing math. So what we're trying to build is an intuitive experience. And a huge, huge Profit Vampire is not maximizing the control that you have over that experience alone. We've changed prices now, at over 1,000 individual locations across dozens and dozens of brands, and to date, we're batting 1,000. We have never been wrong, as long as they follow the recommendations. Sometimes people like to tinker and that's their deal, but that's how predictable it is, and that's the level of comfort that we want business owners to have.
Kayla: All right, so like Chris mentioned, let's talk about brand. So we see this time and time again, car wash owners miss this big opportunity to invest in building up their brand and the brand equity, the relationship and the experience that customers have with your brand. Because it's sort of ambiguous, it can be something large to bite off and kind of difficult to know how to start, which we'll go into some action steps that you can take. And it's harder to track, which is really one of the downfalls that we see. So the key here is to think about not just what can I track back to a promotional ad that I ran? So if I run a 9.99 membership campaign and I'm running ads for it on Facebook and Google, it's easy to track back, okay, how many people clicked on that ad and then became a member? So it's easier to understand your return on your ad spend or your investment. So the Profit Vampire here is solely focusing on those types of campaigns and not focusing at all on just the awareness and the building up of the brand equity over time. So that's what we want you to think about a little differently, is what efforts are you putting out there to make sure that your car wash is the one in the market that everyone thinks about when they think car wash, or at least the ones that matter in your geographic area. So if you're, you know... A great sort of lens or a a practice you could do is ask someone, or have a friend ask someone in your town or in your area, "Hey, I'm new to town," or "Just moved in, just moved, where should I get my car washed?" And if your car wash name isn't the one that pops up, and you can even kind of think through this on your own and intuitively know if your car wash would be likely to pop up on someone's mind. And if not, think about how vulnerable you're leaving yourself to incoming competition. So that's mental real estate that people... We want that mental real estate taken up with you, and your brand, and your car wash. So, one-
Chris: Before you jump off of that, 'cause this is something that we've struggled with since day one, 'cause one of the things that people maybe assume that we don't appreciate is that we don't have money to waste. Like, we don't pick fights we can't win and we're not going to advocate for something unless we believe it's going to be successful. We started doing what are called programmatic ads, where basically, you geo-fence, you probably heard of this, certain areas, and so if somebody drives into that area, they get tagged with an ad, and if they show up at the site, then we can track that. So you know where they're coming from and what it's driving. When we first started leaning into that in a big, big way, if you looked at the top 20 best performing ads in terms of driving both people's involvement and to the site, 18 out of the top 20 were general awareness ads, meaning they weren't discount-driven, they weren't getting coupons, which is mind boggling in terms of the fact that clients couldn't... They couldn't connect the dots, that if you couldn't say, "Oh, they got this coupon, redeemed it here," and whatever it was, then it wasn't valuable. That is insane. The number one reason that people get their car washed is because they realize they should. So how do you get them to realize they should? By putting something in front of them. It's like, don't think about elephants, don't think about elephants. Don't you picture an elephant right now, Kayla, don't you picture... Oh, you lose. Right? Sometimes it just takes a tickle. And by offering up that discount, when you're running a discount, where's that money come from? That comes from the profit first. So yes, you do get some increased tracking ability, but at a cost, where simply being able to quantify and prove that that traffic is driving, like, isn't that what you want? But more than anything, I want to be everywhere. I want to have that share of voice and share of mind, as Kayla was describing, more than anything. But also remember that you are a business like so many others, if direct attribution was the only way to do marketing, why would anybody in the world have ever bought a Super Bowl ad? And why would they do it every single year? Unless it was driving some change. Do they ask to know the names of everybody who watched the Nike ad and then went and bought shoes? No, of course not. They're buying it for a lot of other reasons. So we have to look around and say, "Hey, what are successful growing businesses, where do I see them?" What do you love? What products do you use? Where do you see it? And we have to stop thinking so narrowly. But I understand that it comes down to, we just don't have money to waste, but that can really, really be just an albatross around your neck in terms of a philosophy. So kind of break out of that mold and look around and ask, "Why are they doing that?" Could it be that we know something that Verizon doesn't and they're the fools? Probably not. So we want to think about, in a global context, in a macro context, you know, what we should be doing. Anyway, back to you, Kayla.
Kayla: Oh, thank you. No, that's great. And so, one kind of fun thing I like to think about when it comes to why brand is so important is, think about for a second here, what do you think makes your car wash unique? And I like this because I get to talk to so many car wash owners and operators, it's almost comical how similar responses are. So pretty much everyone says something along the lines of, you know, my experience is different, my quality is different, my customer service, how clean the car gets, how dry the car gets, something along those lines. And so if you think about it, if everyone, if every express car wash owner is sort of saying the same thing, how can you really be truly different from the express car wash that opens a mile up the road? So that's the key here, that we want you to think about is the only thing that you can invest in that is truly, truly unique, yes, your experience and all of this is important, but it has to be in relation to your brand. So people need to associate your quality, and your experience, and how dry the car gets, to you, your brand, you specifically, not just any car wash in the area. So we won't have time to get too deep into these, but here's a few examples of how you can start thinking about investing in your brand equity. Some of them are going to cost money, some of them are just actions you can start to take or things to think about a little differently. I'll run through them really quickly, and then please pop in questions if you have any and we can follow-up later. So investing in branding is one to think about, this can be an expensive endeavor, but it's really important to make sure that the actual visual aspect of your brand is creating the connotation and the emotions for the people looking at it, that you want. So if we're investing money in brand awareness ads, first make sure that the brand looks and feels the way that we, you know... The emotions that we want to evoke and that everything looks really cohesive. Awareness campaigns we already talked about, so I'm going to kind of skip over that one, but it's really just about not only focusing on promotions themselves, but building up brand awareness over time. Those can be really long-term, low-key campaigns, and also low-spend, but just something that makes sure if someone's typing in "car wash near me" into Google, you're the one that pops up. If they enter a geo-fence, you know, if they shop at a grocery store right across the street, you're the one that's serving them ads. So it's really about that mental real estate and making sure that they know who you are. Fostering relationships. So we have found that any type of exchange with your customers that is inherently relationship-based rather than just transactional is so impactful. So the example is a free wash on your birthday. The way that people respond to something like this, just because it's recognizing them as a human being, it's not just transactional, it's... You've built-up a relationship, they got something as a gift, those perform like through the roof and they build brand equity very, very strongly.
Chris: And tell them what happens afterwards. It's amazing.
Kayla: Yeah, exactly. Yeah, feel free to jump in if you want to do it.
Chris: Well, so this is something, again, that we're... The part about my job that I enjoy so much is that, you know, we get to find things, as I mentioned earlier. We find these little nuggets and patterns that we get to share with people. 'Cause when we run a campaign, let's take this Free Wash on Your Birthday Campaign, well, most of the time what would happen is you'd launch that campaign, some of those people would become members. How ever many people became members was your success, and how you sort of calculated your ROI. Well, the question was, okay, great, but even with a 10% enrollment rate, which that one did get, well, what the heck happened to everybody else? Did anything change with them? And the answer was, yeah, it absolutely did. We took everyone who participated in that particular campaign, it was like 11 or 12,000 people, something like that. And we got the people that enrolled, great, they're over there. So we looked at these people who did not enroll and we said, "How often were they coming to the car wash before they got the birthday promotion? And what washes were they picking?" And we tracked those same people, so they came in on their birthdays, or for their birthdays, or whatever it was, and afterwards, not only did they come in more often, which I would've suspected, that was what I was hoping to prove, but the distribution, they actually picked more expensive washes afterwards to the point where it was so systematic, and these are the same individuals we're tracking the whole way through, so I mean, it's bulletproof data. But the value created afterwards, in terms of real dollars, was identical to the dollars created by the folks who became members. It doubled your ROI. So now, when the question is, "Hey, should I run another Free Wash on Your Birthday Campaign?" The answer went from, "Yeah, I think so," to "Hell yes, and can people have two birthdays a year?" Because that's the behavioral change that we're pushing, but not knowing that will stop someone from doing that, thinking they're wasting money. You're making money, you just can't see it, and that's a Profit Vampire. By not doing it, we're stealing, we're robbing from the future because we just didn't know. But it's crazy. I love it.
Kayla: Yeah, and then I think another great example of this could be recognizing anniversaries of your members. So we use that as a retention tactic, but it's really, you know... They're not just a member, they're not just a number in your spreadsheets, but you're recognizing and building up that relationship with them. "Hey, you've been a member with us for three months, six months, a year." And kind of recognizing those milestones doesn't even necessarily need to be an offer or a gift or anything, it could just be an acknowledgement, and people love that.
Chris: There's so much data around that.
Chris: Just being seen.
Kayla: Yes, exactly. And then I'll sail through the last couple here. So lastly, investing in your story. So with this, I like to think about... When you think about what makes you unique as a brand, the tendency is, I'm going to name off a few things and I'm going to write this nice spiel on my website about how we're the most eco-friendly, we're the most community-oriented, whatever it is that is what makes you different. Rather than that, can you figure out a way to act upon it and really just, you know, walk the walk instead of focusing so much on saying who you are as a brand? Make sure that you're acting upon it. So maybe it's if you're the eco-friendly car wash in the area, can you partner with a local environmental cleanup or a water conservation effort? Something that shows authenticity, which is the next one. So being authentic is just more and more important in today's world in general. And with car wash, we see often a tendency for everyone want to be what we call the Nordstrom of car washes. So it doesn't matter if you are the Nordstrom of car wash, the Walmart of car wash, it's about being authentic to who you truly are, because they're going to know one way or the other once they come on-site and actually experience your car wash, so it's better to just be very upfront. It doesn't mean that there's anything inherently wrong about not being the most upscale or the most premium brand ever, but just, you know, using words and imagery that is going to match up so that they have a very cohesive experience from what they expected when they clicked on your ad versus what they actually get when they come on-site.
Chris: You know, and with that, like there's... 'Cause we'll probably just open it up for Q&A here, now, just looking at the time, but one of the questions that we already got was, "Hey, when it comes to general awareness, what is the best media or media channel to kind of go after?" So we most... I'll say, most organizations that do participate in marketing or traditional marketing usually exist within three to four different channels. Whether it's social media, programmatic, direct mail, there's a couple that are just pretty straightforward. We have one group who participates in 26 where they want to be everywhere, all the time, and they invest heavily into that, and they've been certainly rewarded for that. But when you can't do it, shallow and wide works well if you're bold. And I don't mean bold as it relates to an offer, but the worst thing you can be is easy to ignore. So if you get a piece of creative that's presented to you, here's what I do, is I flip it over, I count to two, literally two seconds, and I turn it back over. And if I can't answer the question, who was this and what did they want me to do? It's not good enough. It's not going to work where I'm trying to meet as many people as possible. If you really want to spend into it, which if you're a new site, new to town, I highly encourage you to do this, I would much rather you say something to the effect of, "Hey, we don't want to tell you that we're the best. We want to prove it. First wash free, always." Now of course, there's ways that we can throttle and make sure people aren't abusing that. But at the same time, now I've got everybody's contact information, now they're all coming to me, and if you're given a long enough timeline, you'll give 100% participation, given a long enough timeline. What are your opinions on that, Kayla?
Kayla: The first wash always free?
Chris: Oh no, no, just in terms of, if you want to do general awareness and get your name out there, what would you recommend?
Kayla: Yeah, I would recommend a combination of Google ads, and if you have access to do any geo-fencing or programmatic, that would be kind of a nice additional one. Google is kind of easy for everyone to be able to access, and we see... So that one will be more, people actively searching, so it's customer, or potential customers, that are in the market for a car wash. They're looking, you know, their search terms or the sites they're visiting are in relation to car wash, so they're prime potential customers. And then, if you could supplement with one more thing, I'd do geo-fencing and target demographically based on maybe grocery stores right nearby or retail that's right near your car wash that people are naturally going to.
Chris: You know, we got another question that came in that wanted to know about the importance of that first visit. And as we mentioned, there's... A whole lot of good things can happen if you're able to identify that it is their first visit, and we kind of use that tactic of welcome back to be one way to be able to identify them, LPR will certainly help from a reactive standpoint, and there are some more sophisticated options that are coming out with triggers and whatnot. But as we're talking about general awareness in brand, when we think about a simple question which would be, what do you want to be known for? That could be a lot of things. We had one group that's like, "Oh, you know, one of our things in our mission statement is, you know, we have fun." And I'm like, "Really? 'Cause from where I sit, it doesn't seem like anyone is." You know, it was very inauthentic, but if you make that even more narrow, you have to give people a story at the end of the day. You have to give people something that they can easily share. We've had a lot of people, whether it's buff and dry machines, like, a dry car, before I worked in this industry, I did not appreciate what a big deal that is, right? So if you've made that investment, don't assume that is the value that they saw in the experience, but you made the investment. So what would happen is if as cars came through and you said, "Hey, welcome back. Hey, quick question. Do you keep coming back because we're known for the driest car in town? Because we're known for the driest car in town." Next car, "'cause we're known for the driest car in town," next car, "we're known for the driest car in town." What are you now known for? The driest car in town. You can control and participate in your own reputation by just giving them a simple story. Now you're in control, otherwise it's just kind of up to them to think about what they think is best, or what you're known for, or anything else. Even simpler than that, what if that question was, "Hey, did you come in today because we're known for our membership plan?" Like, that's a really easy question to ask and it's not salesy. But back to Kayla's point earlier, what does it mean to be a member there instead of somewhere else? If you're not driving an element of tribalism, meaning people need to belong to something, perpetual coupons, which is what it is otherwise, don't mean anything to anybody, right? What are they part of? What does it mean? Have fun with it. Be lighthearted. Like, there's... Just do something, and I will get into many more examples of simple ways to do that in the future, if people are interested in that topic. So that's all the questions that we had in the Q&A box. If anyone wants to throw one or two more in there, we got a couple of minutes and we don't want to rush anybody off. I will say this while we've got a little bit of time, as it relates to spending, again, everyone's got a budget, we want to honor that budget, but I have yet to ever see anybody overspend. I'll tell you that right now. Meaning that most people, they hold back in fear of wasting that money, and there's always some level of risk, but part of it is not being foolish, it's about being calculated. That's what Kayla and her team do all day long is figure out where we're going to get the highest assurance of outcome and ROI. But you need to err on the side of bold because there's some... Whether it's physical real estate like a billboard or some other things that aren't as easy to track in terms of direct attribution, there are other statistical methods to where we can prove their effectiveness. Got a good buddy of mine, they do billboards and have for years, and it's a digital billboard so we know exactly when it's on or when it's off. And so, what we're able to prove statistically is that yes, when the billboard was on, it did drive general traffic, but it did not... We couldn't prove a connection to increased membership enrollment. Duh. And that's exactly what you would expect to have happen, but now we can measure it and now we should know how much we can do it. So that direct attribution problem, again, can be overcome if you're willing to sit and listen to exactly how we do measure that. Because the worst thing that can happen is somebody else, with maybe deeper pockets, takes 'em all and you get edged out, you know? And that's not cool. And there's other ways where you don't have to go deep into your pocket. There are so many low cost, no cost ways to get your name out there by just having fun. Just again, what story are you giving people? That is ultimately what it boils down to, and go hard into it. If you don't believe that everyone in town believes the level of care and quality that your site is providing, well, watch out, 'cause somebody else does believe that and they're going to push that message out there and they're going to take what you have, and we've seen it happen countless times. Like, we can now measure the effectiveness of brand when it comes to penetration, just did this this morning as part of some research. There's some unbelievably powerful forces out there, so get on that list and make sure that you've got a storm-proof practice, or rather, site.
Kayla: All right, I guess...
Chris: One minute to go.
Kayla: Yeah. If anyone thinks of anything else, we'll be following up with an email and we have... I think we have a contact form in there, so if you do think of anything else, we'd be happy to connect later and answer any questions that you might have.
Chris: Yeah, especially if you're a midsize or a larger group and you're curious. You know, as I mentioned earlier, we don't pick fights we can't win. So often, people will call up Alex at Suds and say, "Hey, can you guys just take a look at my numbers and tell me if I've got any meat on the bone or if there's anything that we could be doing?" And that way, we just come in with full transparency and we say, "Yep, I can see this here, I can see this there." Or, "No, unless you want to make some significant changes, you're pretty well-optimized." We don't know. We don't know until we look. So if you want us to take a look under the hood, we'd be certainly happy to. In fact, we love it, and people will get pretty excited afterwards, 'cause usually, a couple of commas involved in the outcomes. They like that.
Kayla: All right, well, I think we're out of time, so we'll let everyone go back to your day. Thank you so much for listening, and again, feel free to reach out if you want to connect with us any more about this profitability topic.