Transcript

Dave Kunchenski, VP of Stratgeic Product Mangement: Welcome to "The Personalized Car Wash Experience of Tomorrow". Few housekeeping items before we get jump into the content. You know, just a few things to point out, how to communicate with us during the meeting. If you have a question, you can click on Q&A button at the bottom of your screen and then, you know, type your question.

At the end of the webinar, we'll answer as many as we can. And by the end of this week, we'll go ahead and send out a recording of today's webinar along with the link to the Patheon release notes that will highlight all of the features released to date with explanations of the features. You'll also have, We'll also have time for Q&A towards the end, all question and answers will be documented and answers to be sent out as well in case we cannot get to all of them. With that, I'll go ahead and introduce myself.

My name's Dave Kuchenski. I lead Product Management for Patheon^® here at DRB^® Systems. And I have a special guest with me today. So, Glen, go ahead and introduce yourself.

Glen Parkes, Entreprenuer in Residence, Vontier:  Yep. Thanks, Dave. My name is Glen Parkes. I work for DRB's parent company, Vontier, and I lead our innovation engine that we call Launchpad. So looking forward to today.

Dave: Okay, with that, we'll go ahead and get into the content.

Glen: Thanks Dave. So look, I want to touch on a little bit more broadly around what personalization is before we get into car wash specifics. I think technically, you know, personalization is about creating a connection with your consumers, with your customers. It's about ensuring that they, they come back to you every single time. They think that you care about them, they understand that you care about them, and it drives that, it drives that loyalty through motion with them.

I think, you know, we'll talk a little bit today around AI and machine learning and some quite sophisticated measures of personalization. What I want everyone to remember when we talk about all these things is at the heart of personalization is that emotional feeling when you, when you walk into a bar or a restaurant and the bartender knows you, knows your favorite drink. They welcome you like, like they know you. If you imagine the bar in Cheers, when everybody walks in and everybody knows your name, right? That's personalization. So at the core of everything that we talk about today, I want everyone to come back to that emotional feeling of understanding that you are connected to that consumer and you are connected to that business on a personal level.

You know, if we take this back to examples in the 1800s, there was a famous example of, you know, the gentry of the day would walk, would step out of their, out of their carriage, right outside a hat shop, and they just yell "hat", and then a few hours later they go back and their own personalized hat was made and ready for them. So, that that shop obviously knew them, knew their taste, knew their, knew their preferences, and that's at the heart of what we talk about in terms of talk about personalization. We know that consumers want this. We know that three quarters of consumers are frustrated when they don't get a personalized experience. We know that returning customers are nine times more likely to spend money with you. And when they do, it's like 31% more.

We know that operators are struggling more than ever to drive that connection, personalization, specifically, now we're at a crossroads of generations, right? We have Dave and I's generation, dare I say, and older who, you know, grew up without digital tools for personalization, grew up in that bar setting, and now we have the younger generation who's all tech. They were born with a phone in their hand. So to meet the broad spectrum of all those needs right now is a pretty unique challenge that we have in this day and age. Next slide there.

So how do we do this? How do we make a connection? Look, I think it's, it's all about trust. And I think for me there's certainly three pillars of how we actually do personalization, make those connections. We have to add value to the consumer. This cannot just be a buy and sell relationship. And I go back and today I spent a few minutes unsubscribing from blanket marketing emails that I got that were just sent with no segmentation, no understanding of who I am, what I want. So those I see as pure upsell plays, it cannot just be an upsell play. It has to be win-win for both, and it has to be that connection and loyalty.

Transparency and authenticity to earn trust. You know, I think one of the interesting commercials I saw on the TV recently with Matthew McConaughey was a sales, excuse me, a Salesforce commercial, you know, Salesforce is goes to the commercial. At the end, the tagline on the Salesforce commercial was, "Your data is not our product." And I was like, wow, that's really cool. That for me now drives trust in Salesforce and that now drives loyalty and personalization with them. And finally choice. We have to let the consumer choose how data is used and how it's not used specifically.

You know, you see a lot of regulations in Europe right now around opting in and opting out of data collection. So I think for me, fundamentally, it has to be open, transparent, trustworthy, and it has to add value to both sides. That's really how we make a connection. Next slide. So what I want to do over the next few minutes is talk about the journey of more broad personalization techniques that we've seen across the industry. And after that Dave, will walk through these specifically more around the car wash space.

So let's talk a little bit about reactive personalization. Again, a lot of that is these blanket emails. It's cart abandonment. It's really looking at what a consumer has done and then how we react to that. I think that's, you know, probably one of the first levels of personalization we got. It's not sophisticated, it's not that impactful, but hey, it's level one. It's somewhere where we can start. Dave, next slide. If we talk about proactive personalization, this is again, a little bit more sophisticated, more personal.

What proactive personalization does is it combines some information about the consumer and it includes information around certain events. I ironically this morning, I got a proactive personalization from Dick's Sporting Goods that understood that, you know, I typically buy a lot of soccer gear, my daughter plays soccer, and understanding that it's about to be the youth soccer season starting. So I got a 20% coupon on a, for cleats for the new soccer season. So it's proactively saying, okay, we understand a little bit about the user from a broad segmentation point of view, and we understand a little bit around what's going on from a time wise point of view. And it's putting those together and having a little bit of a proactive personalization.

Not amazingly sophisticated, ironically works. We're going cleat shopping on that. So well done. Thanks for that proactive personalization. Next slide Dave. The next level up is really predictive personalization. This is where a lot of industries are moving to right now. Amazon's obviously the best. A little bit more sophisticated, more data mining, a lot of trend analysis, a lot of more nuance segmentation analysis. So Amazon knows my age, my age bracket, it knows my past history. So based on those and machine learning capabilities, it then starts to predict and recommend some of the products that it thinks I should buy.

So really good example of predictive pers- predictive personalization. Again, quite prevalent right now, but again, not everywhere, but a little bit more sophisticated. And then the last one, Dave, we'll touch on what we call hyper-personalization. Now this starts to move into the realm of AI away from, away from machine learning, but builds on machine learning to AI. And what is the difference between machine learning and AI? Well, machine learning takes a lot of data, historical data and then uses that to predict the future. It's a pretty linear trend. So, hey, it's predictive is machine learning. It looks at what you bought previously and then tries to predict what you want to go buy. So it's a pretty, pretty linear in terms of where it goes.

AI is a whole new ball game, which I know there's a lot of talking about AI right now. What AI can do, it can bring in not only data from yourself, it brings data from a lot of people around you, family, friends, coworkers and stuff. It looks at behaviors, it looks at trends, it pulls all of these different data sets in together. And then it uses to give a much more sophisticated, predictive benefit from you. It can infer and it can discover by itself. So the power of AI is huge. I think Instagram is probably the most famous case. You know, a lot of people believe that Instagram is actually listening to you, which I'm still on the fence about, but if you, if you look at what Insta- or what Meta actually says, what Meta actually says is "no, we're not physically listening. We're actually bringing in so much data sources that we can actually predict things that you want before you even understand that you want them." It even looks at your behaviors to the point of TikTok obviously runs on AI.

There's a lot of famous cases right now of TikTok where they're looking at not only what are you looking at on the internet, but also how you're looking and your behaviors, how long you're staying on each page. And there's a lot of incidents right now where TikTok's actually predicting and diagnosing people with ADHD based on their actual behaviors, not just on, hey, what you bought previously. So I think from a car wash industry, Dave's going to go much more into this. I don't believe we've hit the realm yet of hyper-personalization. I think there's only a few tech industries that have actually caught and done to hyper-personalization, but it's a huge possibility for this whole industry. And I guess with that, Dave, let's get more into detail around car washes.

Dave: Yeah, sure. Thanks Glen. Yeah, it's incredible how far we've come since the days of, you know, a gentleman coming out of their carriage and yelling "hat!" in front of the store to, you know, some of the things now that we see on a lot of the social media giants around personalization and, you know, how we're shopping and recognizing our trends. So I really want to talk a little bit about, you know, car wash personalization, you know, how we at DRB think about personalization in the car wash space, and then some of the things that we're doing as part of our roadmaps to really drive that personalization and help you as operators create those emotional connections from that personalization.

So couple different areas within car wash that we see opportunities for personalization. So first I want to talk about vehicle recognition. You know, standard retailers, they have a challenge when it comes to personalization. You know, e-commerce personalization is a little bit easier for retailers, but in-store, physical site personalization is a challenge because how do you recognize that consumer? And a lot of times that personalization is reactive because they have to get customers to sign up for loyalty programs, get them to enter their phone number, get them to scan a barcode, and then I can drive, you know, personalized information to that customer. But a lot of times it's at the point-of-sale or it's after the, after the point-of-sale that personalization happens.

In the car wash industry, in most states, we have a leg up because we can use technologies like license plate recognition, you know, different avenues to recognize that a consumer's on site and really start to drive targeted marketing, targeted content, you know, to those consumers. So vehicle recognition is really kind of a way that we could passively, you know, personalize information that we deliver to those, those consumers. You know, post wash engagement is an area that I think, you know, Glen talked a lot about creating that connection, creating that trust with consumers, creating transparency. I think, you know, post-wash engagement is a way that we can do that.

Being able to deliver, you know, text and emails about how was your wash today? How did we perform as an organization? Are there things that we could improve? You know, getting that feedback and being transparent with your customers is one way that you can really increase that transparency. And it's a level of personalization because, you know, you can, you can say, you know, I know you received this wash, how did you feel about, you know, the graphene or whatever chemicals you were using, how did you, you know, feel about the cleanliness of the car?

So there's a lot of ways that you can create that transparency and that trust with those consumers. You know, AI dynamic pricing, this is an area that, you know, SUDS has really played a part in for a long time. Being able to, you know, look at pricing models is a membership underpriced or overpriced, you know, per site, per location, you know, and getting to a place where, you know, potentially in the future, looking at different factors that influence the demand of a car wash. So if you think about the different factors that impact the demand, it could be weather, right? It is weather. It could be traffic patterns, it could be, you know, the quality of the service that you're giving, right? It's going to impact demand for your wash. But there's, you know, using those different factors, can we take those into account and start to provide AI recommendations around, we think, you know, Saturday at 10 o'clock it's going to rain, which is normally a busy time, but it's going to rain. So maybe you want to offer a reduced pricing on Saturday morning because we want to drive more demand to the wash, right?

You know, things like that where I think, you know, we can get better as an industry of leveraging technology to understand demand for our services and use pricing as a tool to potentially increase demand in high increase demand in low demand times. And then, and vice-versa when there's a lot of demand potentially increasing pricing to, you know, make sure that we capitalize on the revenue opportunity that's there. Mobile and in-dash technology. I think is going to continue to play a role obviously with, you know, Glen works for Vontier, our parent company. We've got a lot of, a lot of operating companies within Vontier that play in different areas of EV charging and, you know, vehicle technologies. We call it the mobility ecosystem here at at at Vontier and DRB.

But, you know, we've got a lot of inroads into those mobile and in-dash technology companies that I think are going to enable us to really provide another level of carwash personalization going forward. And then, you know, the last thing I'll talk through is subscription fatigue. And I think one of the things that, you know, historically, car wash operators have always looked at themselves as competing against other car washers. And while that's true, I think, you know, clean, shiny, dry is kind of table stakes in the car wash industry. And the express model, I think, you know, most customers are relatively happy with the car wash they get. I think one of the things that we as an industry have to start considering is we're now competing against other subscriptions.

And what I mean by that is the average consumer has around 12 subscriptions that they, that take money out of their account every single month. And we all kind of hit that point where we go, you know, I just have way too many subscriptions. I need to cut some of these out. Just too much money is coming out of my account. And it's that point that car wash subscription is now competing against Netflix, Hulu, Amazon, it may be a food delivery service, it may be a service that I have for my vehicle so that I can remote start it and those kind of things via my phone.

But all of those subscriptions get stacked up against each other. And there's technologies out there today that really help customers manage those subscriptions. And so when you think about it through that lens, you know, how do you provide enough value in your subscription, in your carwash subscription so that when a customer evaluates their subscription base, they say car washing is towards the top because potentially I have partnerships with other industries or other providers. So always looking for ways that how do I provide additional value other than just, you know, providing a great wash and a fast, you know, quality experience.

So, you know, Glen touched on the four different types of personalization in the car wash. So I'm going to walk through a couple here, kind of how we see them at DRB. And so, you know, reactive personalization, really this is something that, something that's happened, an event that's happened and how do we react to that event? So in this case, it could be that a credit card is going to expire, right? So this is a credit card expiration or a failed payment, things like that. Can we send a text message to that customer, react to that event and then get them to update their credit card so that we avoid that costly churn.

So that's a good example in the carwash industry of reactive personalization, proactive personalization, things that, you know, we understand a customer's data and in Patheon we call that segmentation, but we understand a customer's data and how often they're using their plan. So can we leverage things like text and email marketing, you know, to reach out to those customers and say, you know, stop by today for $2 off any single wash, right? We haven't, we haven't seen this customer in a while, right? Or if it's a member and they're not utilizing their membership, how do we proactively reach out to them and make sure that they're coming in and they see value in that subscription so that as they get subscription fatigue, they don't, they don't churn out of that plan and they don't, they don't leave the the car wash subscription.

We also have predictive personalization. So from a wash membership standpoint, we understand a consumer's behavior, we understand how many times they've been in, how much they've spent with the wash. So we can offer things like, you know, you could have saved $157 with a membership over the last several months, right? That's one example. There's a lot of different ways that we can look at the customer base segment, those customers, and then really, you know, drive, we know customers sitting in this segment are going to potentially take this action at some point. It could be, could be buying a membership, it could be canceling a membership, could be purchasing an upgrade, things like that. But how do we drive that personalization in a predictive way where we can target that customer base to increase the success of our offers.

And then the last one is hyper-personalization, right? So how do we, how do we take more factors about that consumer and when we we communicate with them, really create that hyper-personalization feel where I know your location, I know it's raining today. You know, I know you're not a member, you know, really taking in a ton of different factors and personalizing it to that specific consumer, not just a group of consumers, right? You know, so hyper-personalization is something that I think, like Glen said, maybe not here yet today, but something that longer term we can as an industry can focus towards and try to achieve.

Okay, so I want to talk a little bit about the Patheon roadmap and then we will get into some questions here. So, you know, the first quarter at this point is now over. So if you look at the end of the first quarter there, some key things I'll call out is, you know, we've released our commission tracking in Patheon, we've also done our portal plan sales and maintenance. So from a consumer perspective, anywhere you have a laptop and a log into Patheon, you can sell plans, you can maintain plans, your customer service associates can use those. We've a lot into kind of the roles and permissions of Patheon.

So being able to restrict what people, you know, can and can't do. In the second quarter, so speaking of personalization, we've got our customer notifications launching. Our customer notifications will be things like welcome email for new members. It'll be churn mitigation, so expiring cards, failed payment notifications, upcoming payment notifications. I know there's a lot of regulations that are coming down the pipe in different states and potentially federally longer term around subscriptions and having to notify customers so many days of in advance of a subscription coming. We've got our transactional APIs coming out. But the big one that we're going to, we're going to talk about coming up and at ICA is really around our segment driven XPT promotions.

So we're going to take our segmentation engine and you'll be able to build promotions on the XPT to target a specific consumer. So when that consumer pulls up, you'll be able to deliver personalized ads, offers on the XPT to that specific license plate. So when you segment those customers, they may be first time users, they may be plan members who aren't using their plan a lot, you could potentially reward them, you know, with a free month or something like that to just remind them how much, how much you mean, how much that consumer means to the car wash. It could be potentially customers who are retail members and we just want to capture a phone number and opt into text and email marketing so we can drive those segmented XPT promotions in a variety of different ways. So more to come on that at ICA looking forward to talking to everyone and showing that capability.

And then as we get out later in Q3, we're working through our tablet strategy, so the Patheon tablet, you know, for those within bay automatics, we'll be supporting those in Patheon. And then increasing our loyalty, you know, with our marketing platform that's coming later this year. Being able to increase the kind of the connection between Patheon and that marketing application to drive truly omnichannel type experiences. And then some of the things that we're working on now that we're targeting for Q4 is when we talk about segmentation. How do we leverage AI to create that segmentation and maybe understand patterns and trends that, you know, aren't easily understood just by creating a basic query of, you know, the customer's been in five times in the last three months.

But like getting deeper into that data and having AI call out how potentially profitable those segments could be. And then the other one is the AI recharge logic. So looking at, you know, let's not just charge customers, try to attempt to recharge customers every single night, but how can we get more intelligent about that and say, you know, utilize AI to what is the best day to try to recharge a card based on historical data? What is the best time of day? You know, when are we going to hit a customer's card, you know, potentially on a payday or things that, you know, we can use the influence to one, lower our churn rates, so increase our success of recharges. But then two, also decrease your, decrease your payment processor fees for every single one of those char recharges that happen, you know, especially after 14 days when those get really costly. So with that, that's the end of our presentation here. So we'll go ahead and move into questions.

Glen: Yeah, if anybody has any questions, if you look at the bottom of your Zoom screen, there's a button that says Q&A. If you want to add some questions in there that we'll answer. I think Dave, we had a couple earlier on, so while you're folks typing some questions, Dave, you want to take the first one from earlier?

Dave: Yeah, sure. So we have a question here. You know, thinking about AI and our personalized data, when a customer comes in and they've previously visited as a non-member, can we show them based on their visits over the past two or three weeks that it would've make more sense for them to be a member? When is this coming out? So yeah, we're actually going to show this at ICA, you know, the ability to kind of segment and show those promotions on the XPT. So this will be something that will come out shortly after ICA on Patheon and all of our customers will be able to leverage that.

Glen: Okay, Dave, we have a question. What is the IBA improvements in Q3?

Dave: Yeah, so today on Patheon we don't support In-Bay automatic. So one of the things that we can do coming this year is we can support IBA, In-Bay automatic on an XPT. So for those customers who have, you know, potentially tunnels in In-Bay and you want to share memberships between the tunnels and the In-Bay automatics, you can utilize the, you can utilize Patheon for that.

Glen: Thank you Dave, another question. Keep these questions coming in. Excuse me. Where is the customer data coming from if they're not members? Is this from LPR or other sources?

Dave: Yeah, so you know, again, within the car wash industry, we have the ability to track customers, especially by license plate. You know, right now it's going to be largely license plate and potentially RFID for members. But for LPR, we can track those members. We save all of their transactional, their history data. We create a customer record for them. We know how many times they visited, we know what discounts they've used, we know what payment methods they've used, whether or not we have a phone number on file for them. So there is a, there's a lot of information that we can gather.

As we move forward and we launch our marketing application, as we move forward, we'll continue to increase those data sources into our segmentation so that we can bring things like demographic data, potentially data about their vehicle. You know, really kind of increasing the data sources that we have so we can create richer and richer sources of consumer segmentation to achieve that personalization that we want to drive. And then, you know, once we do that, we can leverage AI to really understand patterns within the segmentation. And so we've got a very powerful tool that we're building here in Patheon and within DRB. So we're really excited about kind of the power that this is going to bring to our operators.

And the great part about it is within Patheon, you don't, you can do this yourself, you can go in and create segments, you'll be able to go in and create promotions. You don't have to be a developer, you can do it all within our UI. It's very, very easy to configure and publish to your sites. So looking forward to 2024.

Glen: And maybe, oh, there's one, one question here. Let me read. Will you open up and work with third parties to make sure enhancements and add-ons to Patheon and XPT screens or even service providers to help new customers work and deploy Patheon?

Dave: So yeah, so we do have, today we have a partner, an integrated partner program. So you could definitely, if there's a third party you have in mind, definitely, you know, reach out to DRB and have them, you know, have them get in contact with us, we can definitely go through that partnership process and kind of walk them through what that looks like. You know, for the XPT screens, for the XPT screens we are, today, you could give access to your partner to build your XPT screens to design them, upload those graphics. So that's really just a kind of a security thing. If you want to give access to your portal, you can restrict them from doing certain things, you know, modifying your customers, but give them access to configure your XPT screens and our training team is always very happy to help anybody who needs to learn those capabilities.

Glen: Okay, Dave, a couple of good ones. Do you have now or are you planning to have texting capability?

Dave: So yes, we are launching texting capabilities at the end of April. Those are the text and email capabilities that I talked about, where we are doing welcome emails for new members, failed payment notifications for plans, expiring notifications, and then a few more use cases. But yeah, those, those capabilities you'll be able to configure the text and email within Patheon, and the look and feel and, you know, what the text message says. And then it will automatically be delivered to your customers by Patheon. So that capability will be here next month.

Glen: And one more, we currently sell digital signage with personalization capabilities. Is there, or will there be a way that we can integrate Patheon to show dynamic pricing on our menu science?

Dave: Yeah, so couple of things. So we do have a data API today and we're also publishing a transactional API, which you may have saw on the roadmap. And so customers could leverage or partners could leverage that data API, that transactional API to pull real time pricing out of Patheon and display it on those screens. So that's definitely a possibility.

Glen: Just a reminder, there is a Q&A button on the bottom of your screen if you want to type in some questions. We have another one here Dave. Will you be integrating the Rinsed functionality into Patheon?

Dave: Yeah, so Rinsed is actually an integration partner of ours. So Rinsed has done some integrations into our data API. I think, you know, once we release our transactional API, you know, in the coming months, once that transactional API is released, you know, Rinsed will have access to that transactional API and be able to integrate, you know, some deeper capabilities into Rinsed.

Glen: Okay. Dave, you want to take another question from another we have.

Dave: Yeah. So how can small or independent carwash operators compete with large chains, larger chains in terms of personalization? So I think this, I think this falls right in line with, you know, Patheon was really designed to be a very robust self-service application. And we're continuing that trend through Patheon, you know, today in the new features that we release. So when we release something like XPT promotions, you as operators can go in and create that personalization, create that, you know, that segment to specifically target your customers. And our teams are always, always happy to help work with the smaller operators on kind of some thought leadership or, you know, as you have ideas or training needs. Definitely feel free to reach out to DRB and we're happy to help.

Glen: Okay. And maybe one last question Dave, from earlier, and I think that might be it for questions. If you have questions, there's a button at the bottom.

Dave: Yep. So how, and this is a good one, what ways can personalization contribute to environmental sustainability within the car wash industry? So was recently at a car wash chain and we started talking about making the, you know, leveraging things within TunnelWatch to make the tunnel more reactive to the vehicle type. So, you know, we have vehicle profile detection, as we can use things like our, like our camera, our LPR cameras and the AI technology within our AI cameras or our LPR cameras. As we can leverage that technology to recognize the make model color of the vehicle.

Being able to do things like, you know, turning chemicals off as a shorter vehicle comes through so that, you know, we're not just spraying chemicals into the air. You know, being able to have the tunnel be more proactive and not wasting chemicals, wasting water. You know, and I think that's important from an environmental sustainability. So, you know, the better we get at understanding consumers, the better we get at understanding vehicles and what vehicles are coming through the tunnel. I think all those sustainability options are on the table for us.

Glen: Great. Thank you Dave. I think we're out of questions. Any final words?

Dave: No. Appreciate everyone's time joining today and look forward to seeing everybody at ICA or on the next webinar.